If it’s true that there’s nothing certain but death and taxes, then accountants will be winners no matter who’s elected.
by Rick Telberg
Of course, the polls are still open as I write this. But I’d be surprised if the electorate swings so hard to the right or to the left that it breaks the partisan gridlock in Washington.
With that, the “fiscal cliff” or “taxmageddon” is more than likely not to get resolved any time soon, but to get kicked down the road, maybe as far as a year from now.
Uncertainty is bad for business. Bad for workers. Bad for the nation. And, considering the United States’ place in the world, not much good for anyone else either — even for our “frenemies” like China and Russia.
Accountants, though, are in the unenviable position of an undertaker in Dodge City. We can help clean up the mess. And all signs point to a very busy tax season, maybe the best since the Crash of ’07.
The 2012 busy season was the best in years, according to accountants surveyed by CPA Trendlines, and 2013 is shaping up as even better — better in revenue and better in profits.
And, maybe as importantly for work-life balance, the new season will be the best operationally in a long time – due to smoother workflows developed out of necessity during the recession and some significant technological improvements.
Clearly, the cutbacks of the recession are a thing of the past as of now. And companies and firms alike are hiring back.
By one measure, 87% of the bookkeeping and accounting jobs lost in the recession have been recovered in both the public and private accounting sectors.
Among accounting firms exclusively, manpower levels are flirting with more than just recovery. At about 955,000 employees counted recently, the industry hit a new record headcount.
CPA Trendlines sources also indicate that mid-sized accounting firms increased revenue on average 3.8 percent last year and are on track to gain another 4 percent this year. Other sources show starting salaries rising about as much, returning to the pre-recession growth rate.
To be sure, the economy in general will continue to struggle toward faster growth. Yet practitioners are significantly more optimistic about the business outlook for their own firms and less optimistic for most of their clients.
Forensic accounting services, just to cite one particular specialty, are surging. The sector has grown, despite the recession, by about 8% to a $4-billion global industry, according to CPA Trendlines sources, with the number of forensic accounting firms galloping ahead at a 16% rate to almost 4,000 worldwide. By 2017, forensic revenues could advance another 13% and the number of firms vying for a piece of the business could rise to 6,500.
Some of the key data we’re analyzing at CPA Trendlines comes from the new edition of the National Management of an Accounting Practice Survey. The new study reports, for instance, that revenues are rising firms in all size ranges.
In addition, firms with annual fees in excess of $20 million are showing growth rates of 6 percent, significantly better than smaller firms. To be sure however, when the impact of mergers is removed, the growth rate is running at only 3 percent.
Profits, as measured by income per partner, are now steady at $366,000 and no longer declining, according to The Rosenberg MAP Survey of mid-sized multi-partner firms nationwide. All together, the revenue gains and tight-fisted spending is enabling firms to enjoy a modest improvement in profits despite the continuance of the recession.
Tax and accounting professionals can get a free trial
for more members-only insights and analysis at GoProCPA.com.