major declines in all kpis: clients, revenues, profits, revenue per client, and profit per client.
busy season barometer:
how accountants are battling the coronavirus recession
join the survey. get the answers.
by 卡塔尔世界杯常规比赛时间 research
last year’s busy season was complicated, no doubt about it. the tax cuts and jobs act and the irs shut-down made life difficult for tax practitioners. but ultimately, they had a good year. a good 56 percent enjoyed an increase in clientele, and only 16 percent saw a decrease.
flash forward to the annus horribilis, aka 2020. according to this year’s 卡塔尔世界杯常规比赛时间 busy season barometer, only 46 percent of accountants are gaining clients — a 10-point reversal from last year. and another 25 percent are losing clients – a 15-point swing from 2019.
more busy season 2020: fiinal rs efiling stats: the end of tax season? | say hello to the new 24-month busy season | 9 big ways the irs could help accountants | the mystery of 10 million missing tax returns | tax pro e-filings down 20 percent | irs web traffic doubles over year-ago | covid drowns irs in new filings | percent | irs web traffic doubles over year-ago | covid drowns irs in new filings | 2020 tax season comes to a screeching halt | the tax season 2020 dumpster fire | tax pros fall behind 6.2% in returns filed
exclusively for pro members. log in here or 2022世界杯足球排名 today.
it’s impressive that so many tax offices have actually expanded their clientele during such hard times. and it’s not surprising that so many have lost clients.
what happened?
obviously, covid-19 is the preponderant explanation. in some cases, it helped. but far more often, it hurt.
benjamin feldman, founder and owner of z best cpa, serving metropolitan new york, has seen a 5-10 percent increase in clientele. he attributes his newbies to “referrals from clients who have family members who could not get in touch with their accountants.”
the great migration
three factors seemed to be causing a migration of clients.
• tax offices in lockdown, even if only briefly, have sent urgent clients scrambling to available providers.
• clients needing new niche services, especially those involving covid-related government programs, are looking for new providers.
• clients under financial pressures are looking for more affordable services.
migration is a zero-sum shift. one practitioner’s loss is another’s gain.
at the same time, however, the market has shrunk.
• businesses are taking advantage of the july 15 extension, so fee income has been delayed.
• many taxpayers, strapped for cash, are doing their taxes on their own.
• businesses have closed.
brian skelton, owner of new jersey-based brian skelton cpa & company, has been working hard to retain clients but has lost more than 10 percent of them.
“we experienced a large drop in our client bases,” he says. “so, we are marketing drop-off service. and we’re s social distancing, wearing masks, and limiting office visits to two clients per meeting.”
key metrics in free fall
• total revenues are taking a commensurate dip. the number of accountants reporting a significant increase (10 percent or more) in total revenue has been cut in by a quarter, to 15 percent from 22 percent last year.
• meanwhile, revenue declines have tripled, from 9 percent of firms last year to 29 percent this year.
• in particular revenue declines of more than 10 percent have grown exponentially, from 0.4 percent of firms last year, to 10% percent this year.
• the same holds for net profit, which declined at about 30 percent of firms this year, up from less than 12 percent last year.
• revenue per client is also in steep decline. last year, most firms – 62 percent reported increases. this year, only 45 percent enjoyed gains.
• profits per client are even worse. last year, 55 percent reported advances. this year, only 41 percent.
some respondents say they sustained profits by cutting costs. others, however, saw revenues decrease while overhead remained the same.
robyn holland, who’s with a small firm in madison, ga., sums up the general experience, telling us, “we got additional clients because of ppp, but expenses are up due to outfitting our employees for remote work. profit will be less because of the cost of supplies has increased. overhead costs are definitely on the rise.”
holland depicts the juggling act that cpas and tax practitioners are performing everywhere: setting aside certain services, adopting others, adapting technology, shifting staff, watching expenses, losing clients, gaining clients, making do, getting by.
- with the season pushed to july 15, the number of extensions is down across the board
but one thing is certain: no matter how this pandemic unfolds, taxes, and tax services, are inevitable. until they’re not.