We know its busy season and most of us have our heads down working toward tax and audit deadlines. We have little time for our families, recreation, and sleep, let alone paying attention to current events. Gleanning a few minutes of daily news, however, we continue to realize there are more troubled economic times ahead.
We’re reminded of similar events that occurred in the 1980s, particularly in automobile manufacturing regions of our nation. During consulting work for a CPA firm in Flint, Michigan at that time, I watched many CPA firms close their doors because their client base quickly deteriorated due to dependency on the manufacture and sale of automobiles. The firms that closed, or that suffered greatly reduced revenues, all seemed to have a “wait and see” attitude about the recession. Many of their leaders felt that the recession would be short-lived and that it would be business as usual in a few months (the recession lasted three years!).
The CPA firm I worked with, however, didn’t wait to see how things would turn out. They became proactive in their practice, both in identifying and serving client needs as well as their internal firm policies. This firm was not among those that failed! Instead, they saw their staff size more than double during the economic downturn!
The effects of economic downturn historically reach CPA firms one to two years after marketplace impact. Leaders of CPA firms across the country are telling us about some of their clients that can’t obtain financing, that are experiencing substantial revenue declines and collection problems and that are losing major suppliers to bankruptcy. Now is the time for us to become proactive in meeting our clients’ needs and to prepare our firms to withstand the economic fallout that is ahead.
What is your firm doing to be proactive during this busy season? Post a comment and share with our readers.