revenues are taking a hit.
by 卡塔尔世界杯常规比赛时间 research
who ever thought it would come to this – accounting firms reducing their clientele?
it seems to be increasingly common, and the reasons are clear. it isn’t a desire to reduce revenues. it’s a desire to keep up with the workload without burning out.
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with fewer professionals entering the profession, and more of them leaving, more than half of practices are culling their less profitable or more problematic clients.
choking back the revenue stream hasn’t been the first or only means of balancing personnel shortage with workload excess.
- more firms are outsourcing and offshoring, including more than half of those with more than $10 million in net fees. more than half of all firms that currently outsource intend to increase the strategy this year.
- firms are upgrading technology and adopting automation to free up professionals for more sophisticated work.
- firms are hiring non-cpas to handle less technical tasks, such as administration, freeing up cpas for actual accounting work.
- many firms are merging or acquiring other firms not only for fee growth but to expand personnel roles.
- higher starting salaries, often made possible by investments by private equity, are being used to attract recent graduates.
michelle golden river, at fore llc, sees a “vicious circle” as burned-out professionals seek other firms or even other professions.
“with fewer people, most firms simply have too may clients, leaving their people overcommitted and exhausted,” she writes in the 2024 rosenberg national survey of cpa firm statistics. “many firms took much-needed steps to reduce customer volume and apply stricter criteria for client acceptance, but most still have more work to do in this area.”
fewer clients, higher fees
some firms seem to be “smart-culling,” managing to increase their total net fees despite reducing their client list. some of that increase, of course, can be attributed to higher per-hour or per-job fees.
according to the 2024 rosenberg survey, the most comprehensive and authoritative survey of its kind, reporting numbers from 2023, 55 percent of firms with more than $20 million in net fees have cut clients loose (to put it nicely), also cutting loose an average of $519,284 in billings.
firm pulling down $10-20 million were slightly less eager to lose sources of income, with 48 percent culling clients, though that’s up from 46 percent in 2022. at the same time, revenue loss declined from an average of $223,980 to $192,982.
smaller midsized firm – $5-10 million – were in the same ballpark, with the culling rate nudging up from 50 percent to 52 percent, but it was an expensive cull, with revenue losses jumping disproportionately from $105,283 to $164,574.
the smallest firms in the survey, those with $2-5 million in net fees, saw the biggest increase in the number of firms cutting clients, leaping from 36 percent to almost 60 percent. but they must have culled wisely because revenue loss declined from $70,233 to $61,167.
the shedding of clients creates opportunities for practices that get their acts together. the opportunities are for firms that
- beef up technologies,
- streamline workflows,
- invest in recruitment and retention,
- outsource and offshore work, and
- cull problematic or unprofitable clients.
aggressive, well managed firms can scoop up the clients that other firms couldn’t handle – clients who just might be desperate enough to pay higher fees.