Accounting Today – 6 Opportunities Every Firm Should Consider
Here are six opportunities CPA firms should consider:
- Be More Selective With the Clients You Accept and Maintain – Accounting firms are in a position to be more selective about their clients, focusing on those who align with the firm’s vision and values, which is beneficial for both client satisfaction and employee morale.
- Outsource Internationally – To address staffing shortages, firms are increasingly leveraging offshore professionals from countries like India, the Philippines, and Mexico, tapping into a vast talent pool and enhancing collaboration capabilities.
- Establish Remote Hiring Practices – The pandemic-induced shift to remote work enables firms to hire talent without geographic constraints, significantly widening the pool of potential job candidates and offering diverse hiring opportunities.
- Diversify Talent Beyond CPAs – Firms are looking beyond traditional CPA qualifications and considering candidates from various backgrounds, including those without college degrees, to fulfill roles in project management, client service, and other areas.
- Use Innovative Pricing Strategies – With strong market demand, firms have the opportunity to rethink their billing methods, such as offering package pricing and reevaluating service costs, reflecting the value provided and supporting investment in talent and technology.
- Develop a Specialization and Niche Focus – Concentrating on specific niches or industries, fostering expertise in particular areas like the construction or nonprofit sectors, to offer specialized advisory services and build deeper client relationships.
Accounting Today – The Best of Times: Opportunities in Accounting in 2024
Here are some ways to capitalize on your firm’s opportunities this year:
- Leverage Economic Growth – Capitalize on the strong economic environment by expanding your service offerings and client base.
- Seize M&A Opportunities – Utilize market consolidations to acquire new clients and expand into new niche markets.
- Benefit from Industry Shifts – Attract talent and clients from larger firms downsizing or merging.
- Address Talent Shortages – Proactively implement strategies to attract, retain, and upskill professionals to further enhance your firm’s service quality.
- Exploit Competitor Weaknesses – Improve client service to gain business from competitors failing in this area.
- Diversify Service Offerings – Go beyond traditional accounting services to meet sophisticated client demands.
- Build Trust with Clients – Develop deeper relationships with clients, becoming a trusted advisor and problem-solver.
- Embrace Advisory Roles – Shift towards advisory services, coordinating with clients’ other professional advisors.
- Hedge Against Commoditization – Focus on consulting and advisory work to remain relevant as traditional compliance roles evolve.
- Innovate with Technology – Integrate advanced technology for more efficient, value-added services to clients.
Accounting Today – Few Audit Execs Use Gen AI — For Now
The primary applications for generative AI among audit executives are in:
- Identifying themes or patterns in large datasets,
- Detecting anomalies, and
- Drafting audit programs and reports.
Accounting Today – MassCPAs CEO Aims to Build Accounting Pipeline
Here are some ways to help build a talent pipeline for your firm:
- Be Open to Different Backgrounds – Actively recruiting from a diverse range of backgrounds and skill sets.
- Establish University Partnerships – Collaborate with local universities and colleges to create pathways for students into accounting careers, including internships, externships, and mentorship programs.
- High School Outreach Programs – Engage in outreach to high schools to inspire and educate students about career opportunities in accounting.
- Dual Enrollment Initiatives – Partner with community colleges to implement dual enrollment programs, enabling high school students to earn college credit while they work for your firm.
Accounting Today – Voices The Three Goals of a Healthy Succession
Here are some tips to support a smooth succession at your firm:
- Introduce Clients to Firm Personnel Gradually – Gradually introduce clients to new leadership and staff, fostering relationships over time rather than rushing the process before the transition.
- Communicate Early and Reassure Staff – Start your internal communication about the succession early, address staff concerns about their roles and the future of the firm, and provide transparency and clarity.
- Develop a Diverse Client Base – Actively expand and diversify your client base to reduce your reliance on a few major clients to enhance your firm’s appeal to buyers and lenders.
- Develop Your Firm’s Future Leaders – Begin mentoring potential successors years in advance, preparing them to sustain and grow the firm’s successful strategies post-transition.
- Put it in Writing – Ensure all succession plans and agreements are detailed and documented in writing to avoid vague promises or informal arrangements.
- Be Open to Innovating Financing Approaches – Explore creative financing options for succession, such as having the firm guarantee a business loan for the buyer, to facilitate smoother financial transitions and attract more buyers.
- Seek Expertise from an Advisory Team – Engage a team of advisors, including attorneys, succession consultants, and lenders experienced in CPA firm buyouts, to guide your succession process.
- Maintain Your Firm’s Excellence – Continue to focus on firm growth and client service excellence, even as retirement approaches, to maintain or increase the firm’s value and attractiveness.
- Explore Earnouts – Consider including earnout provisions in succession deals, which reward former owners for the continued high performance of the firm post-transition.
- Start Early – Begin succession planning 2-5 years before the expected departure date, which allows ample time to address all aspects of a smooth transition.
Future Firm – 3 Simple Ways to Collect Feedback From Your Clients
Here are some ways to get feedback from your clients:
- Implement NPS Surveys – Begin using regular Net Promoter Score surveys to gauge client satisfaction. Use a management app like Beamer to automate the process to ensure consistent, periodic feedback collection and analysis.
- Use Psychology-Driven Email Surveys – When you send out email surveys, use psychological tactics inspired by Robert Cialdini’s principles. Ask clients if they consider themselves helpful, and then direct them to a Google form with one open-ended question about changes they’d like to see, which can increase engagement and response rates.
- Hold Annual Re-engagement Meetings – Schedule yearly face-to-face meetings with clients to personally gather their feedback. Ask open-ended questions like “What can we do better?” to encourage honest, detailed responses. Also, promptly implement feasible suggestions to demonstrate your firm’s responsiveness to clients’ needs.
Rosenberg & Associates – If a Partner Retires Really Early, How Big Should the Buyout Be?
Here are some tips for facilitating partner buyouts:
- Define Retirement Ages – Establish clear definitions for normal and early retirement ages.
- Vesting Requirements – Implement a vesting period for equity partners, ideally 15-20 years, to ensure commitment and gradual buyout accumulation.
- Set Early Withdrawal Penalties – Introduce substantial penalties for early withdrawal, such as a 5% reduction per year before a predetermined retirement age, to discourage early departures.
- Consider Partner Contributions – When calculating buyouts, assess the partner’s contributions, such as their expertise and client management, as their departure can impact the firm beyond the financial aspects.
- Avoid Savings Plan Perception – To prevent partners from treating the buyout as a withdrawable fund, ensure partners understand that the buyout is not a savings plan but a retirement benefit.
- Develop a Customized Buyout Calculation – Use a tailored approach for buyout calculations, such as a multiple of annual compensation, adjusted for vesting and early withdrawal penalties.
- Be Aware of Differing Retirement Age Preferences – Preferences for retirement age may vary between younger and older partners; tailor the plan to accommodate different perspectives.
- Include Withdrawal Provisions – Explicitly cover scenarios of voluntary withdrawal in the buyout plan, in addition to death, disability, or termination.
- Consider a Related Book – Rosenberg & Associates has a book, “CPA Firm Partner Retirement / Buyout Plans,” which provides additional guidance on creating or updating buyout agreements.
- Regularly Refresh Your Buyout Plan – Periodically review and update your firm’s buyout plan to ensure it aligns with current firm goals and partner expectations.