During these unprecedented times, it is difficult to predict the future. Thus, the leaders of today’s CPA firms should focus on planning for various options based upon as many scenarios as possible. This type of planning explores plausible potential business models and implementation processes for impending unknowns.

As you develop your strategic plans for 2022 and beyond, consider the following predictions and trends.

1. Aligning the firm’s goals and vision with partner performance criteria and accountability continue to be a key objective for progressive firms.
2. Unrelenting increased competition for professional staff, rising staff labor costs, increased regulations, and client demands will force firms to carefully examine their mix of services, industry concentrations, and niches. Client engagement profitability will be more scrutinized and evaluated, and partners will be held more accountable for increased realizations.
3. The future will bring tremendous opportunities for accounting firms that are highly leveraged, with well-trained professional staff, using state-of-the-art technology, and use outsourcing methods and processes, and increased efficiency methods. Firms will continue to offer remote work options way beyond 2022 to compete for talented professionals.
4. To take full advantage of the favorable marketplace for accounting firm services, partners need to be highly effective client relationship managers, trusted advisors, and rainmakers—not grinders. Firms of all sizes will increase their menu of consulting and advising services to remain competitive. Firms will continue to acquire consulting and advisory companies that complement their traditional services.
5. As succession planning continues to be challenging, career development and leadership training will be further expanded into firm CPE curriculums. Progressive firms will significantly increase their training budgets. To remain competitive and avoid merging into a larger firm, partners will have no choice but to invest heavily in their “best and brightest” staff in all stages of their careers.
6. Across the country, consolidation of firms will continue at a faster pace, especially with two to 15 partner firms. 2022 will most likely break records for CPA firm M&A transactions.
7. There will be more mergers of public accounting associations and networks.
8. More small firms will split up due to a lack of partner consensus on succession planning, whether to merge into a larger firm, and the strategic direction of the firm.
9. Firms will increase their efforts to recruit talented partners from other firms. Ideal targets will have leadership and practice development skills and partners who are specialists/experts in industries and niches.
10. As the war for talent is in a “crisis mode,” firms will invest more resources into outsourcing work offshore and acquiring firms or growing their existing firms in India and the Philippines.

Related Article: Predictions for 2022: Part 2.

Joe Tarasco is CEO, and Nancy Damato is president of Accountants Advisory Group, LLC, a national and international consulting firm to public accounting firms.  Accountants Advisory Group professionals consult from practical industry experience, having held executive positions in the certified public accounting industry in the areas of partner governance, practice management, marketing and human capital.