… but salary costs will outweigh some of it.
by 卡塔尔世界杯常规比赛时间 research
early results from the 卡塔尔世界杯常规比赛时间 outlook 2024: emerging issues, opportunities and trends survey show cpas generally optimistic about their upcoming year.
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but there will be challenges, among them the ability of small businesses to pay for the predicted success.
most indicators up
a good 60 percent of respondents say their overall fees will increase by somewhere between 5 and 10 percent in 2024, and another 13 percent expect fees to shoot up by 15 percent or more. with only 8 percent foreseeing no change, fewer than 7 percent expect a downturn.
not bad! not many other industries forecast such growth in what many expect to be a sluggish year.
apparently the growth in fees will be attributed to higher pricing and billing rates. an even third of respondents will be charging at least 5 percent more, with almost 38 percent asking for up to 10 percent more. a bold 18 percent are going for 15 percent or more.
the numbers for revenue per client are roughly in line with those increases.
slower growth
while all indicators show increases next year, a few significant areas may show less growth.
- number of clients: some growth expected, but not enough to explain all the higher fee income. while 28 percent are pushing for a 5 percent expansion of clientele, only 20 percent think it will approach 10 percent. twenty percent expect no change, and 18 percent are expecting, and even hoping for, a decline. many practices will be culling their client list.
- staffing: the main motivator for the culling of clients is the challenge of finding and retaining staff. despite the upward trend in income and billing rates, 20 percent see their full-time staff increasing by no more than 5 percent, with only 17 percent hoping to have 10 percent more on staff. almost half expect no change.
- salaries: it looks like the staffing shortage will result in higher salaries for staff, though not so much for partners and owners. almost a third will be upping pay by 5 percent, but more than a third will be going for 10 percent more. five percent may have to offer 15 percent more.
- owner/partner comp: partners and owners will have to absorb the differential offered to staff. only a fifth hope for a 5 percent rise in income, though a quarter are hoping to take home 10 percent more. twelve percent think they’ve prepared their firms for an efficiency and staffing level that will bump their comp by 20 percent or more.
what cpas are saying
one firm explains the rebalancing of staff salary vs. owner comp.
“all of our costs have increased or are increasing, and we need to pass that along,” the respondent says. “we will have to compensate staff more to keep/attract talent. this may make raising partner comp more difficult.”
another has been making strategic moves to set the stage for a 10 percent increase in fees.
“we have annual rate increases each year,” the respondent explains. “we have held back marketing to get the right staff in place and train them. we expect this to bear fruition in the next year.”
joe piluk, with pathway in ontario, is looking forward to a 20 percent increase in fee income off a 15 percent increase in rates thanks to an impressive 20 percent expansion of staff.
“2023 was a growth year for us (although not as good as we had hoped),” he brags, “and that trend should continue.”
jason scott miller, founder of j.s. miller group, says all indicators are on the upswing, telling us, “i expect modest growth heading into 2024 and throughout the year. this is consistent with past performances.”
bridget noonan, a principal with clearline in british columbia, says her firm is ready to cash in an additional 25 percent of fee income, attributing the increase to “acquisition and new services driving growth.” however: “compensation limited to inflation.”
all this optimism runs up against a countervailing dark cloud. barely 10 percent of cpas believe the u.s. economy will improve next year, and 64 percent fear it will only get worse. and 58 percent are pretty sure things will get worse for small businesses, the mainstay of almost all cpa firm clientele. in the event of an economic downturn, will they be able and willing to pay higher fees?