There has been an increase in the number of small single-owner firms billing less than 100k. These firms originally developed primarily because of displacement of CPAs and accountants in corporate America. While these firms are growing they are faced with the heavy cost and administration required in this industry and may consider sale as they face the challenges alone.
Accountants and CPAs are subject to a whole new regime of government regulation. New demands, licensing requirements and watch dog duties have discouraged many of the aging CPA and accountant professionals from attempting to continue.
Politics have to be followed carefully as discussion of tax system overhaul has hit prominence in America’s political climate.
The CPA and accountant population is aging. While there are plenty of opportunities for younger entrants, we continue to see this population age in overall demographics.
Consolidation of the marketplace continues. Smaller shops with 1-4 professionals are being merged into other mid-sized firms with 5-10 professionals.
Aging boomers may drive price pressure down as they retire.
Specialization also continues to be a trend both in terms of product and customer. More regulation is imminent, especially in tax preparation. Owners should be very careful around specialization in this economy. Many small firms no longer do audit work. The risks are too great and penalties too large to maintain an audit practice so many have exited this area.
Advances in technology have caused a new trend of mega practices that are emerging. The use of this technology to make small business accounting and individual accounting more affordable is driving more and more practices to the cloud.
Another trend has developed where bundling other services such as legal services, CPA services, and financial planning services has gained ground. This allows one set of infrastructure costs to house several professionals.
For detailed information about current industry trends, please contact Ryan Gipple at 602-614-3583.