The firms that will take full advantage of the huge opportunities for the accounting profession in 2017 and beyond will be those that attract and retain the best staff, offer more formal advisory and solutions-oriented services, and control their direct labor costs through process improvements and financial management of engagements.
As we close out 2016, the accounting profession landscape and marketplace is changing rapidly. Here are some predictions and trends that you may wish to consider in your strategic planning for 2017 and beyond.
- Fee pressures, rising staff labor costs, increased regulations and client demands will force firms to carefully examine their mix of services, industry concentrations and niches. Client engagement profitability will be more scrutinized and evaluated while making partners more accountable to increase realizations. The future holds tremendous opportunities for accounting firms who are highly leveraged, with well trained professional staff, using state of the art technology and efficiency methods. To take full advantage of this favorable marketplace for accounting firm services, partners need to be highly effective client relationship-trusted advisors and rainmakers, not grinders.
- Firms will continue to acquire consulting and advisory companies that complement their traditional services to provide integrated solutions services to their clients.
- Career development and leadership training will be further expanded into firm CPE curriculums as succession planning evolves into a crisis mode. Progressive firms will significantly increase their training budgets. Firms will have no choice but to invest heavily in their best and brightest in all stages of their careers to remain competitive and avoid merging into a larger firm.
- The firms who have grown through consolidation of aging practices will begin to deal with intensified succession issues in terms of transitioning clients to qualified partners who can play the trusted advisor role.
- Consolidation of firms in the country will continue at a faster pace. There will be more mergers of mega firms into larger firms. More firms will merge as a competitive strategy to gain more resources and services rather than for near term succession problems. There will be more mergers of accounting associations and networks.
- Managing Partners and Executive Committee members will be held more accountable by their partners in their ability to lead and manage successfully and to achieve the goals and objectives as documented in their strategic plans.
- There will be an increase in the number of firms hiring professional lead generators to supplement the practice development efforts of the partners. In addition, firms below the Top 200 will outsource their marketing and practice development programs to marketing consulting companies as the need for diversified multi-faceted marketing professionals becomes necessary to maintain a competitive edge.
- The partnership structure will continue to fade away and be replaced by a more corporate type structure. More firms will hire professional COO’s from outside of the CPA profession to assist them in managing their organizations.
- Partner compensation will be more geared toward higher levels of profitability and results driven contributions to the future success of the firm. Aligning the firm’s goals and vision with partner performance criteria and accountability will be a key objective for progressive firms.
- More small firms will split up due to a lack of partner consensus on succession planning and investing in the future direction of the firm.
The future is bright for accounting firms that can quickly implement initiatives and strategies to adapt to the changing marketplace and the needs of quality clients. All of us at Accountants Advisory Group wish you a healthy and prosperous 2017.