The recent tax cuts and the potential for additional unilateral changes to the tax code by the White House are creating the kind of uncertainty that drives demand for accounting firms.
The largest firms have been sharing all summer (starting with news from Accounting Today in June) about the uptick they’ve seen in tax consulting work. And this comes at a time when the Big Four’s advisory fees are already far outpacing traditional audit and tax compliance work. The Wall Street Journal reported that advisory revenue has surged 44% between 2012 and 2017 (while “traditional” audit work has climbed by just 3% in that time).
Accountex expects the profession’s largest firms will double down on their fastest-growing, most profitable clients and shed those that don’t meet that criteria – notably, smaller companies that historically only buy traditional audit and tax compliance work.
Small opportunities for the Big Four is still highly profitable and attractive work for the multi-national firms, who in turn, will force rank their clients and shed those that they believe will have the smallest lifetime value. This pattern will continue, eventually making its way to small and mid-sized firms.
Are you prepared?
Accountex believes that accounting technology will be key to winning your share of these new opportunities.
From a client service perspective, clients from bigger firms are accustomed to automated services. And from a firm management perspective, greater efficiency will be needed to serve this wave of new clients without adding staff.
Based on a survey of more than 400 owners of small to mid-sized accounting firms by Accountex and CPATrendlines, your peers are gearing up for this opportunity: IT budgets are up for 75% of those surveyed.
IT budgets are up for 75% of those surveyed by Accountex and CPATrendlines.
To better serve clients, the majority (and in some cases, the vast majority) of small to mid-sized firm owners say they are increasing their spend on audit and risk support, followed by sales tax, and accounting software systems. And to drive greater firm management productivity, your peers are increasing their investment in HR, expense and practice management systems.
Client Service Technology
Firm Management Technology: IT Budgeting Forecasts
To learn more about the future of accounting and what will set your practice ahead, register for Accountex (Use the code “Sage” to attend for FREE!) and check out Jess Scheer’s session at the conference.