Fourteen More Challenges for the Profession
Source: Accounting Today Here are 14 issues having the greatest potential impact on accounting firms, according to August v Absence of a vision of the future that inspires enthusiasm and excitement among the partners and staff. v Poor leadership. (see the article below, “How Leaders Influence the Firm,” for an explanation of the leadership role.) v Lack of succession planning. Firms may have plans to replace their managing partners, but there is little planning for replacing other leaders. Merger is rarely the solution for succession planning. Merger should be part of a strategy. v Failure to execute. This is a pervasive problem. v Lack of expertise beyond auditing, accounting, and tax. Accountants must reinvent themselves to meet the needs of today’s complex businesses. v Anachronistic compensation programs. Compensating people on the basis of seniority, equity, or other objective measures is out—developing new skills and being committed to the firm’s values are in. v Outsourcing will eventually diminish the firm’s skills in performing the outsourced functions. v Price competition from outsourcing. If competing firms outsource tax return preparation to lower their costs, price competition may follow. v Potential increased costs of liability insurance. Clients of small and midsize firms have the means to file major suits in this litigious environment. v Competition from big regional firms. These firms have been emerging and growing rapidly, and may pursue the larger clients of smaller firms. They will also pose greater competition for new recruits. v Continuing staff shortages for many years. The supply of new accountants will be less than the attrition of current accountants for at least the next 15 years. v More knowledgeable clients will demand more from their accountants. Clients can easily get the answers to many questions just by going to their accountants’ Web sites. v Selling as an exit strategy may become less viable. Prices are not increasing. It may become a buyers’ market. Preparing a firm for sale must start years before the event. v Loss of firm identity. Many firms are in danger of being too large to compete with small firms in the market, and too small to compete with the large regional firms. One solution to this identity problem is to become a dominant niche player. From Accounting Today,
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