CPAs are more optimistic about business growth predictions for 2012 in their respective states than the nation as a whole, according to a new survey of CPAs in Indiana, Michigan, Ohio and Pennsylvania.
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Those polled were most confident about their own industry, and their own companies. Information technology tops the list of capital investments planned in the coming year. Survey respondents also anticipate some new hiring in the next 12 months. Health care costs continue to be a top concern of businesses along with government regulation and uncertainty in the tax laws.
The poll was conducted for the Indiana CPA Society, Michigan Association of CPAs, Ohio Society of CPAs and Pennsylvania Institute of CPAs by the University of Toledo Urban Affairs Center in late in 2011. It polled nearly 13,000 CPAs in who are partners or sole owners of public accounting firms or serve as CEOs, CFOs or presidents of companies in various industries. More than 2,100 CPAs completed the survey.
“The poll showed that CPAs in the four states feel confident about the prospects for growth in the industries they work in and serve, but still have concerns about factors beyond their control,” said researcher Jeanette Eckert in a statement. This includes increasing health care costs and government regulation, and the lack of available credit to grow theirs or their clients’ businesses.”
Only 6 percent of the CPAs who responded predict robust growth in the United States, but the numbers climb as they evaluated the growth outlook for their own state (9 percent), industry (20 percent), and organization (26 percent).
The CPAs surveyed did not report significant decreases in workforce or revenues since the financial crises took hold, and say they expect both areas to increase marginally in the next year. These CPA business leaders expect marginal (53 percent) or substantial (7 percent) revenue growth in the next year, with marginal (32 percent) and substantial (2 percent) growth in employment. Less than 10 percent of respondents predict a reduction in employment.
Information technology topped the list of investment and spending priorities over the next year. Sixty percent of the surveyed CPAs said their organizations plan to invest marginally or significantly more in this area followed by 40 percent planning capital spending increases. Product development and marketing/advertising will remain relatively flat with more than 50 percent citing no change in either category.
CPAs and their clients listed the ability to obtain funding as a significant area of concern. Approximately 76 percent do not think small businesses have access to adequate credit to grow or sustain their operations. The financial crisis and forecasts for slow growth greatly reduce their or their clients’ ability to obtain loans, according to 70 percent of the CPAs polled. CPAs also cite health care costs as a concern, with 98 percent of those surveyed responding affirmatively when asked if the cost of health care benefits was a worry for businesses in their states.
Some are looking into this area for savings, with 94 percent agreeing that companies are reevaluating employee/benefit costs, while 63 percent are aware of companies dropping or reducing employee health insurance coverage. Labor costs, workers’ compensation, and public pension funding were also seen as problems, with public pension exposure taking the highest percentage among the three.
The survey results also provide a glimpse into public accounting trends, as 72 percent of respondents were from public accounting firms. Seventy-seven percent of the CPAs surveyed cited slow pay or no pay for services as a problem for them and other businesses in their state. That may account for why managing receivables will be a top business focus for 83 percent of CPAs and their organizations this year, followed by strategic planning (76 percent) and upselling services (73 percent).
Seventy-three percent of the respondents somewhat or strongly agreed that the current tax climate is a problem for businesses in their state. More than half of the respondents (61 percent) agreed that companies are taking advantage of available tax breaks, but few were using current low-interest rates as an opportunity to grow. Despite a general attitude that taxes, including specific taxes on business, and regulatory costs are a hindrance to businesses overall, CPAs overwhelmingly said those factors would not cause them to move their business or practice to another state.