Outlook for CPAs and Accounting Firms in 2017

During the final two months of 2016, the stock market rose exponentially and consumer confidence was the highest it has been in several years. Much of this optimism is believed to be due to the perception that the new Presidential Administration is pro-growth. And if the policies of the incoming administration are successful, this would have a positive impact on nearly all sectors of the economy, including CPAs.

Salaries for CPAs have risen by an average of 3% to 5% over the past several years, and because of a shortage of qualified job candidates, Robert Half reports that the overall increase in salary in 2017 is expected to be in this range. For accountants in management, the average salary increase will be slightly higher at 6%.

Certain job functions are in greater demand, and will command higher salary increases during the New Year. Among these include:

  • Business Systems Analysts
  • Comptroller
  • Financial Analyst
  • Auditor Positions

Accounting firms are also looking for certain skillsets in their new CPAs, such as technical accounting skills, working knowledge of IT (e.g., Excel and more complex data analytics applications), and effective communication skills.

Expanding Opportunities: For accounting firms, the opportunities to grow clientele continue to be strong. A growing number of Americans are freelancing and/or starting their own businesses. In addition, the economy is becoming increasingly complex in the digital age. New industries are created each year, and the need for CPAs to help these businesses in areas such as taxes, payroll, bookkeeping and other essential accounting tasks will continue to grow.

The one area of caution is on the consumer side. The incoming administration put out a detailed tax plan during the campaign that had a goal of simplifying the tax code by reducing the number of tax brackets from 7 to 3. The future of the Affordable Care Act is also in doubt, and it remains to be seen what type of accounting requirements organizations will have when it comes to employee health care. A simpler tax code may cause a slight down tick in consumer tax services, but it will do nothing to slow down the growing demand businesses have for accounting-related services.

One less talked about opportunity for CPAs with an entrepreneurial bent is to purchase their own accounting practice. With the first wave of the Baby Boom generation entering full retirement, there are countless accounting firms across the country that are either for sale, or the owner is planning to sell in the near future (within 2-5 years). This means that in many areas of the country, there are multiple firms to choose from, giving buyers the ability to negotiate more favorable terms and conditions during the purchase.

For those looking to purchase a CPA firm, the best place to start is to speak with a business broker who specializes in this industry. Business intermediaries deal with these types of transactions on a regular basis, and they know how to navigate the common pitfalls and guide buyers toward a successful transaction.

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