As we close-out 2017, the accounting profession landscape is changing rapidly. The firms that will take full advantage of the huge opportunities for the accounting profession in 2018 and beyond will be those that:
- attract and retain the best staff;
- run their firms more like a business vs. a practice;
- have a sense of urgency to decide on important decisions;
- have contemporary and strategic leadership;
- offer more formal advisory and consulting services;
- adapt quickly to leading edge technology for firm operations and to service needs of the clients;
- strategically position their services, industry specializations, and niches in the marketplace; and
- control their direct labor costs through process improvements, state-of-the-art technology, and strict financial management of engagements.
To follow are some predictions and trends that you may wish to consider in your strategic planning for 2018 and beyond:
- Client fee pressures, increased competition for quality staff and clients, 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 for increased realizations. The future holds tremendous opportunities for accounting firms that are highly leveraged, with well-trained professional staff, using state-of-the art technology and outsourcing methods and processes, and increased efficiency methods. To take full advantage of the favorable marketplace for accounting firm services, partners need to be highly effective client relationship managers, trusted advisors, and rainmakers — not just grinders.
- 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. Partners 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. Firms will increase their efforts to recruit talented partners from other firms with leadership and practice development skills, and who are specialists/experts in industries and niches. Firms will invest more resources into continuous recruiting efforts and hire more in-house recruiters.
- The firms that have grown through consolidation of aging practices will begin to address intensified succession planning issues in terms of transitioning clients to qualified partners who can play the trusted advisor role and retain transitioned clients.
- Consolidation of firms in the country will continue at a faster pace. Firms will continue to acquire consulting and advisory companies that complement their traditional services. There will be more mergers of mega firms into larger regional firms. More firms will merge as a competitive strategy to gain more resources and service capabilities, rather than for near term succession problems. More small firms will split-up due to a lack of partner consensus on succession planning and the strategic direction of the firm.
- 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 the firm’s strategic plans.
- There will be an increase in the number of firms hiring lead generator/business development professionals to compete with larger firms and supplement the practice development efforts of their partners.
- The need for diversified multi-faceted marketing professionals will become even more necessary to maintain a competitive edge in the local marketplace. As a result, more firms below the Top 200 will outsource their marketing and practice development programs to consulting companies.
- As the lack of quality professionals continues to be an obstacle to growth, internal marketing professionals’ role will continue to expand and increase in the areas of attracting quality staff, partners, and M&A candidates.
- Rapidly changing technology will play an even more significant role in marketing professionals’ programs and plans. As a result, they will be better equipped to: generate ROI-driven reports, perform precise market research, collaborate with BD professionals on CRMs and targeting prospective clients, implement creative digital, social media and social listening campaigns, and use video interviews and creative designs, including infographics to illustrate client case studies and testimonials.
- More firms will evaluate their audit processes and procedures to make better use of data analytics and continuous auditing capabilities and related software.
- The partnership structure will continue to fade away and be replaced by a more corporate type structure. More firms will hire professional COOs to assist the partners in managing their organizations.
- Partner compensation will be more geared toward higher levels of profitability (and less top line emphasis) and by 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.
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 very happy, healthy and prosperous 2018!