Is It the Best of Times or the Worst of Times?

Source: Partner's Report, the Monthly Update for CPA Firm Owners

The tax season was a busy one, but what will happen next?

Here are some issues, problems, and opportunities based on an IOMA interview with Allan Koltin, CEO of PDI Global:

• There is a powerful price war among accounting firms. Firms are willing to reduce rates to keep staff busy.
• Some firms may yet have to lay off people, but at the same time there is competition for the staff they want to keep. How they will do this while their revenues are under pressure is problematic. PricewaterhouseCoopers has announced it will resume salary increases ahead of schedule.
• To increase new business, many firms have raised the bar for partner performance and are changing their partner compensation programs to increase accountability. (Partners commit to individual goals and to being accountable for achieving those goals.) Larger percentages of compensation will come from bonus pools. With a price war going on, firms will search more vigorously for clients that aren't so price-sensitive.
• Partners recognize that they will have to reduce billable time and, instead, get out and bring in new business. The cushy times of having too much business are over for now.
• Firms have made difficult decisions on talent, partners, spending, and accountability that they would not have done in better times. This may presage strong growth and profits for those firms.

For the complete article, click here.

From Partner's Report, The Monthly Update for CPA Firm Owners, Institute of Management and Administration, Inc., [email protected], June 2010, p. 1, “Is the Golden Age of Accounting Over?”