Executive Summary
- U.S. Accounting Firm Growth – In 2023, midsized and large U.S. accounting firms witnessed an average growth rate of 13%, the second highest in a decade after 2022’s growth rate of 19%.
- Employee Turnover Management – It is important to develop and implement an efficient system to simplify new employee onboarding, which reduces your firm’s dependency on experienced personnel for training new hires.
- AI Adoption in SMB Financial Operations – 85% of small- and mid-sized businesses are eager to integrate AI for enhanced efficiency and decision-making.
- AI Adoption – Adopting AI can help firms improve efficiency, client service, and profitability.
- Productized Services in Accounting Firms – Productizing services your firm offers allows it to scale efficiently, and it can help make your marketing clearer.
- Decline in Accounting Professionals – There are fewer accountants due to declining birth rates, a misunderstanding of the profession, education costs, unengaging academic experiences, negative early career experiences, and competition with other professions.
Accounting Today – The Fastest-Growing Firms in the U.S. — 2024
- After experiencing an average growth rate of 19% in 2022, in 2023 midsized and large accounting firms experienced an average growth rate of 13%, which is the second-highest over the last decade.
Accounting Today – Growth Factors for Accounting Firms
- Some ingredients for running a successful accounting firm include having the right service offerings and client roster to support growth.
- It can also be valuable to develop a niche practice area for your firm in a specific area.
Accounting Today – Time to Weigh In on the Pipeline Problem
- The National Pipeline Advisory Group (NPAG) is taking a step to help address the accounting profession’s talent shortage by gathering data through two surveys aimed at college students and accounting professionals.
- This shortage, known as the “pipeline problem,” arises from a lack of individuals pursuing accounting degrees and CPA certifications.
- This talent shortage is exacerbated by factors such as the challenging CPA exam, low starting salaries, and burnout.
- The survey results are expected to be published in July.
Accounting Today – Voices: Art of Accounting: Everyone Will be Leaving You
- Everyone currently employed will eventually leave, necessitating a replacement process involving orientation and training.
- Having efficient systems in place simplifies the onboarding of new employees can help improve your firm’s productivity.
- Systems, rather than people, are the backbone of successful businesses, as exemplified by franchises like Subway and McDonald’s.
- A strong system reduces the need for high-level, experienced personnel to train new hires, allowing for more flexibility in the training process.
- Improving these systems is crucial for maintaining operational continuity and avoiding disruptions when staff depart.
CPA Practice Advisor – 85% of SMBs Are Enthusiastic About Using AI in Financial Operations
- Small and mid-sized businesses (SMBs) are increasingly turning to AI and automation to enhance efficiency and strategic task management, as revealed by a recent survey.
- The survey highlights the potential of AI and automation in transforming assisting better decision-making, productivity, and operational efficiency for SMBs.
- SMBs are keen on integrating AI into their business, with a significant majority expressing enthusiasm for its use in both strategic planning and everyday operations.
CPA Practice Advisor – Beyond Numbers: Cultivating Emotional Intelligence in the Accounting Profession
- Emotional Intelligence (EI) in the accounting profession is vital for effective teamwork and leadership, as well as client satisfaction.
- EI includes:
- Self-awareness,
- Self-regulation,
- Motivation,
- Empathy, and
- Social skills.
CPA Practice Advisor – Embracing AI, Automation and Other New Tech is Necessary for Successful Firms
- Firms that adapt and invest in new technologies can greatly improve their efficiency, client service, and ultimately, their profitability.
- However, those resistant to change face a bleak outlook and will increasingly struggle with overall firm operations, client relationships, and staff retention.
- Firm success in this evolving landscape requires a willingness to embrace new tools.
CPA Practice Advisor – How Auditors Are Seizing the Day with Artificial Intelligence
- Artificial Intelligence (AI) is transforming the auditing profession by enabling auditors to access data more efficiently, thereby shifting their focus to professional judgment and analysis.
- AI tools, like anomaly detection, can significantly reduce the time auditors spend manually reviewing datan manual data.
- AI’s role in auditing is seen as a way to improve job quality, inspire current workforces, and attract new talent to the field.
- AI also enables auditors to ask better questions, scope audits more effectively, and gain insights from large data sets and reference materials.
- Ultimately, AI-augmented audits benefit clients by providing deeper insights, identifying risks earlier, and ensuring compliance across various standards.
CPA Practice Advisor – So, What’s Next?
- CPA firms are navigating a landscape filled with challenges such as:
- Attracting and retaining talent,
- Adapting to new technologies and regulations, and
- Meeting evolving client needs amidst economic uncertainties.
- The busy season remains intense for CPA firms, indicating the persistent demand for compliance work and the importance of strategic planning and adaptability.
Future Firm – Productized Services: What, Why & How
- In this episode of the Future Firm Accounting Podcast, Ryan Lazanis discusses the importance of productizing services in accounting firms for efficient scaling and systematization.
- Productized services, also referred to as packaged services, standardize offerings with specific deliverables, timelines, and pricing.
- This enhances firm efficiency, predictability, ease of sales, and marketing clarity.
- Lazanis highlights that this approach is fundamental to streamlining firms and is more impactful than automation or technology in achieving systematization.
- He recommends starting with creating tiered service packages (gold, silver, bronze) based on what typically leads to successful client outcomes based on the services your firm is able to provide.
- “There is absolutely nothing that’s more powerful in your firm when it comes to unlocking systematization in your business than providing productized services.”
- “When you systematize your firm, you are not only able to scale significantly more easily, but more importantly for you most likely is that you put yourself in a position to actually step back from the business and spend more time on vacation or with your loved ones.”
- “By having all the same clients on same or relatively similar packages, you’ll have a consistent, repeatable way of selling, onboarding, and delivering the work.”
Journal of Accountancy – Why are There Fewer Accountants? What the Research Says
Some reasons why there are fewer accountants include:
- Declining Birth Rates – Fewer people are being born in the United States, which is resulting in a smaller pool of college students and reduced talent available for all professions, including accounting.
- Misunderstanding of the Profession – Many young adults do not have a clear understanding of what a career in accounting entails, including the profession’s impact and the variety of opportunities in the field.
- Education Cost and Time – The financial burden and duration of education required for CPA licensure are deterrents for potential accounting students.
- Academic Experience – The nature of accounting coursework and the level of instructor engagement in accounting education are not sufficiently appealing or engaging to students.
- Early Career Experiences – Negative experiences of young professionals in their first few years in the accounting field are shared on social media, discouraging prospective students.
- Competition with Other Professions – Accounting is competing with other professions for a limited number of college graduates due to the overall reduced talent pool.