Practice Management Consultants Predict Bullish Year for Accounting Firms
Members of the Advisory Board consortium of consultancies, at their annual Winning is Everything client conference in Las Vegas, unanimously agreed that a broad array of changes – most for the positive- will occur within the industry.
At the top of the list is increased M&A activity. “Mergers will be very hot this year,” said Ridgefield, Conn.-based
Nashville, Tennessee-based Troy Waugh added that the prices of firms will multiply by “leaps and bounds. Your firms are worth a lot more than you think.” The panel also noted that firms with succession plans in place will likely attract higher prices than firms with soon-to-retire partners and no new leadership poised to take over.
Jeff Pawlow, of the Growth Partnership consulting firm, predicted that salaries will rise as firms move to “performance pay” and away from the old model of paying scheduled annual raises. He predicted that firms will continue to set aside funds for annual raises, but distribute individual portions based on how well partners, and other employees, meet or exceed goals set for them.
“This will lead to more profitability and a larger bucket for performance pay in the next year,” Pawlow added.
Allan D. Koltin of Chicago-based Practice Development Institute said staff workers at many firms will see their pay increase by 10 percent or more in the coming year, as firms get more competitive for lower-level talent. Fellow board member Gary Shamis of SS&G Financial Services in Cleveland noted, “The war for talent is brutal.”
Like many other managing partners, Shamis said he’s spending more time than ever recruiting people. New talent will be especially in demand in key metropolitan markets where, Koltin said, starting salaries for some new accountants will exceed $60,000.
The talent war will also feature more partners from Big Four firms moving to national and large regional firms, according to Koltin. He added that regionals will adopt the Big Fours’ practice of recruiting college professors to assist with special projects.
Technology specialist Gary Boomer, of Boomer Consulting in Manhattan, Kansas, expects firms to increasingly store and access data on remotely-located Internet-based servers, because bandwidth is increasing and more vendors are moving to hosted arrangements. He also predicted firms will increasingly move toward “integrated financial reporting” systems that automate the tracking of engagements and, among other things, help practitioners weed out problems earlier.
In one of the event’s most bullish notes, Nisberg predicted, "CPAs will grow their status as the most influential people in business It’s time to flex your muscles in how you manage your clients and how you manage your firms.”