Years ago, a wise man said that the tax and accounting profession is counter-cyclical. The wise man was Rick Telberg, editor of Accounting Today when it was a relative upstart and considered a rabble rouser. And there's every reason to think that this statement, made before Telberg left during the dot-com boom, is still valid.
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I'm not predicting a fun time ahead in the current economic climate. It's just that for the tax and accounting profession, there are some potential revenue generators out there.
Good times or bad, individuals and businesses still have to file tax returns. They need financial statements and when things go bad, they probably need advice from financial professionals more than ever.
Tax and accounting professionals rely on regulatory and tax law changes. Remember how beneficial Sarbanes-Oxley was in pushing business such as write-up and tax preparation out of the Big Four firms and into the laps of smaller operations? And boy, are we likely to have new regulations and tax law change!
In an era in which a conservative Republican administration is supporting investment in private businesses to prevent economic collapse, there could be an awful lot of new concepts.
There's an unfortunate trend that's likely to benefit partners and that's the ongoing layoffs as businesses tighten their operations. Accounting Technology just received an article written by Charles McCabe, president of the People's Income Tax School, entitled "Tax Preparation - New Career Option for Displaced Bank & Financial Services Employees?"
You don't need to read the article to understand the potential here. The demand for qualified people at tax and accounting firms may be filled in a way that few imagined in August.
And, as I've suggested in speeches and in this magazine, the people who have worried about meeting the demands of Gen Y may suddenly find a group of job applicants who have suddenly become familiar with the phrase "Be thankful you have a job." We are moving from a seller's market to a buyer's market. (We're still going to have to deal with the technology culture change represented by younger workers - so older partners aren't off the hook on this.)
It's going to get tougher. There's some things clients can put off buying, like accounting software, which means that firms selling, implementing and installing new systems are likely to have to scramble for business.
But tax pros themselves can't put off buying tax software and the only way taxpayers can put off filing returns-short of breaking the law - is to file for an extension.
A fun time ahead? No. But there's reason to believe that his business is not in for the kind of disaster that the banks and mortgage companies have endured.
Editor Robert Scott also writes "Consulting Insights," a free, twice-monthly electronic newsletter that addresses issues concerning the consulting and reselling market. It's insight with an attitude. If you want to subscribe, you can do so at http://www.webcpa.com/newsletters.cfm.