Survey: Accounting firms eye growth during downturn
Atlanta Business Chronicle
Most certified public accounting firms reported strong growth during the past two years and are poised to benefit as clients use their services more to stickhandle their way through the troubled economy.
According to the 2008 National Management of Accounting Practice survey, 75 percent of CPA firms surveyed reported growth ranging from 1 percent to 19 percent over the two years from May 2006 through June 2008. Average net client fees per partner rose 10 percent to $664,847.
The survey was conducted by the American Institute of Certified Public Accountants and the Texas Society of Certified Public Accountants.
“Clients go to CPAs to help them weather a troubled economy, and banks may seek greater assurance from practitioners about the companies with which they do business,” says James Metzler, AICPA vice president.
The survey was taken before the financial crisis deepened, so Metzler says the firms’ strategic planning will need some careful revision.
“Particularly in a period of economic uncertainty, practitioners may increasingly find themselves facing more fee competition from other firms and pressure from clients,” he says.
Meanwhile, fewer CPA firms are reporting turnover, another side effect of recessionary forces at work. About 31 percent of respondents said they had lost professionals in fiscal 2007, compared to 45.6 percent a year earlier.
“We’ve found that more and more small firms are offering greater work-life flexibility, which persuades more practitioners to remain at their firms,” Metzler says.
A weak spot, according to the survey, is succession planning. Only 22 percent of firms surveyed had a succession plan and only 10 percent of the smallest firms had a practice continuation agreement in the event of death or a disability that leaves the owner unable to work.
The survey included responses from 2,722 CPA firms.
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