bonus: how do you rate your firm? how does that compare?
by 卡塔尔世界杯常规比赛时间 research
cpas are getting increasingly worried about the economy and its impact on small businesses, according to the 卡塔尔世界杯常规比赛时间 busy season barometer.
more: clientele and revenues rising, but … | have no fear, april is here | survey: busy season looking good | on business outlook, cpas are confident … and concerned | tax pros offer advice for small businesses
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even though inflation’s lessened substantially, supply chains are getting back in order and just about everybody who wants a job has a job, respondents to the survey are more pessimistic in the warm sunshine than in the dark days of late winter.
revenues declining?
back in early february, 31 percent of respondents saw small business revenues declining over the next 12-18 months, with only 2 percent thinking conditions could get “much worse.”
they changed their tunes to just under 50 percent saying revenues will head south, with 9 percent predicting “much worse” conditions over the next 12-18 months. only 21 percent see conditions improving, with just half of 1 percent hopeful of “much better” conditions.
the odds of increasing profits are just about as bad, with 44 percent seeing a downturn and only 20 percent thinking profits could rise.
payroll culprit
payroll costs could be a main culprit behind the difficulties with profit. fifty-five percent tell us it will become more difficult to manage payroll costs while only 8 percent think it might be easier.
for much the same reason, 48 percent of responding cpas don’t see much new hiring, though 17 percent have some hopes in that area.
similarly, 38 percent fear it will be somewhat harder to access fresh capital, and 10 percent predict it will be much harder, though 46 percent don’t expect much change.
supply chain issues, so prevalent during the covid-19 years, aren’t seen as such a serious problem. thirty percent figure it might get worse for small businesses, but 43 percent don’t see any change, and 27 percent see improvement coming along.
the adoption of new technology could be the only area where accountants are close to optimistic. only 18 percent say it will be more difficult to upgrade, while 30 percent see small businesses using new tech to solve some of their problems.
advice for small business
james chakires, apex cpas managing partner, offers a lot of good advice for small businesses, much of it focusing on personnel.
“hire slow and eliminate non-performing employees,” chakires recommends. “businesses are having a difficult time retaining people. most turnover is from those with companies a year or less. there is way too much job hopping going on. business cannot get off low end of learning curve with screening, onboarding, training then employee leaves. i have never seen it to this extent before. we have to improve our successful hires. redesigning the screening process to attract those who have a strong work ethic and will stay is priority number 1.”
somebody at beyon business network has similar advice, suggesting, “have competent team: staff, accountant, marketing and other professionals that go the extra mile.”
james cordova, managing partner at windes in the los angeles area, doesn’t foresee much change in the small business environment, but he warns of a tech threat.
“continue to innovate and keep your technology stack current,” cordova says. “all small businesses should be budgeting for cyber threat protection. small businesses cannot afford to have their data stolen or ransomed, which can have a devastating impact on their bottom line or going concern.”
a lot of the other recommendations have to do with traditional preparation for recession:
- control costs,
- push sales,
- use tech and automation to reduce salary costs, and
- hang in there.
barometer contributors … who are they? what do they think?
for many years, the 卡塔尔世界杯常规比赛时间 busy season barometer has been polling accounting and tax practitioners about their experiences, their status, their fears and opinions, and their advice for colleagues and clients.
but who are these professionals? where do they work? and what do they think of their own firms?
they tend to be from smaller firms.
- 94 percent are in public accounting, tax, bookkeeping, payroll or consulting.
- 21 percent are solo practitioners.
- 47 percent are in small firms with 2-10 people.
- 16 percent are in firms with 11 to 25 people.
- 10 percent are in firms with 26 to 100 people.
- 5 percent are in firms with more than 100 people.
they tend to be leaders.
- 76 percent are managing partners, sole owners, presidents or ceos.
- 17 percent are partners, senior executives or c-suite leaders.
- 6 percent are senior staff, general management or professional staff.
they juggle a lot of clients.
- average individual clients: 513.65
- average businesses and nonprofit clients: 226.05
- average trusts, estates: 58.89
- average other clients (bookkeeping, payroll, wealth management, advisory, etc.): 72.73
they tend to rate their firms highly. on a scale of one to 10 …
- 8 percent rate their firms as “world class” with a 10.
- 13 percent give their firms a 9.
- 31 percent figure they’re an 8.
- 22 percent grant their firms a 7.
- just under 5 percent percent give their firms a 4 or lower.
some nines and tens
most of the 10s based their assessment on client comments, but the leader of one, a very small firm with 60 individual clients and 40 business clients says, “we are and have always been on the leading edge of technology and of course the tax law.”
another 10, with 11 to 25 personnel, finds proof in the pudding: “we have a waiting list of clients. we are constantly asked/begged to accept new clients.”
one respondent, giving his or her firm a 9, says it could be a 10 if new hires stuck around longer.
“we put 1000 percent effort into building a successful culture, very compassionate toward our team, clear plan for growth,” the respondent says. “however, the turnover of new hires is making it impossible to work our plan. the people side has been the most challenging i have ever seen. we are trying everything. it is impossible to gain any efficiencies when we have to continue training new people who do not stay. we are no longer hiring people who have had more than two jobs since the pandemic. we should be a 10 but being a firm of 22, we are paralyzed by the turnover of newer hires!”
another nine, with 11 to 25 people onboard, says his or her firm has earned its high ranking by specializing in small businesses, describing the firm as “niche practice catering to small business and the owners. no non-business-owner 1040s! all professionals are cpas! staff work limited to 45 hrs/week year round! non-standard employee benefits programs (spurs tickets, broadway in sa tickets, hot lunches provided during tax season (thru 10/15), employee wellness programs, etc.”
another respondent, a sole practitioner with 64 individual clients and 10 businesses, says the firm rates a respectable seven, telling us, “i’m better than most my size – client-friendly, caring, instructive, pricing lower than the h&r blocks, etc., so i’m happy to be able to help my clients retain some of their hard-earned money.”
and down at the bottom …
someone “semi-retired” gave his or her firm a four, explaining that the firm is “technically competent, technologically behind.”
and a small firm is rated as a mere two because “a cpa firm without cpas can’t lead. we are too busy to get involved with the community or state cpa society activities.”
one disgruntled partner-level respondent works at a very large firm that’s worth nothing more than zero. why? “audit services are still king. we have no competitive edge. we have internal financial disincentives to train our us-based staff.”