The Current Economy: Bad News, Good News
Source: AICPA CPA Insider
The following includes excerpts, reproduced with permission, from this article by Steve Erickson.
Since 2008, the accounting profession has experienced events that have had a profound impact on how firms must operate. Our revenues have been relatively flat or decreasing, while our costs have continued to rise.
Major trends:
- Pricing has moved from a cost-plus model to a fixed fee for many of the services we provide at a time when regulatory agencies are imposing ever-increasing requirements and standards. Our realization has decreased on many engagements due to budget overruns that cannot be billed.
- Competition for off-peak seasonal work has become extremely intense.
- Employee costs and benefits have increased and now, in many firms, exceed 50 percent of net revenues.
- Our need for technology has continued to increase, requiring substantial investment.
- The aging demographics of our profession and our society. This is having a direct impact on the services required by clients and our ability to provide those services as many CPAs, 50 percent of which are Baby Boomers, begin to retire.
The good news is that there will be an ever-increasing need for certified public accountants in the future. Firms should communicate with staff about the many ways they can assist the firm during this time of change and uncertainty:
- Have a great attitude and be a person that others want to be around.
- Take responsibility for their assigned engagements and tasks and be accountable for successful outcomes.
- Manage their time.
- Talk positively about the firm's clients.
- Leverage their knowledge.
- Help get the word out in the community about the firm.
Let staff know how these efforts can benefit the firm and its employees economically and personally in the future.
For the complete article, read “The Current Economic Reality for Accounting Firms.”
From AICPA CPA Insider, October 25, 2010, www.CPA2biz.com.