Accounting Firms Succeed Despite Economic Slump
Accounting firms are managing overall to maintain their rates, client services and staff even as the economy continues to challenge them and their clients, according to a new survey.
CCH, a Wolters Kluwer business, surveyed 100 U.S. accounting firms and found that even in a contracted economy, none of the firms have lowered their rates. While a slight majority of 54 percent said they have frozen their rates over the last year, nearly as many, 46 percent, have actually increased their rates.
In terms of services, 28 percent reported theyve been more likely to over-serve clients, while 24 percent said the economy has caused them to be more selective about the clients they retain.
Firms are catering to the strong clients they want to keep for the long term, while being more wary of keeping clients who may not be as profitable, said CCH president Mike Sabbatis.
Firms also reported that they are keeping a closer eye on the bottom line, with 81 percent more closely monitoring accounts receivables and 68 percent examining staff productivity.
Fifty-seven percent reported that they are more carefully measuring their return on investment in technology, but a large majority of the firms have not delayed making purchases as a result. Only 17 percent of the surveyed firms have delayed their hardware purchases and 14 percent have delayed software purchases as a result of the economy. In addition, 14 percent of the firms reported they are accelerating plans to deploy Software-as-a-Service solutions as a result of the economy.
Fifty-six percent said they plan to ramp up hiring as the economy improves. Qualified staff is already in short supply, however, at the same time that older workers are heading toward retirement. According to the survey, only 4 percent of firms have seen their staff members delay retirement because of the economy. Yet 26 percent of the firms hope to retain or hire older employees as the economy improves as a strategy to fill positions with qualified staff.
Ninety-two percent of the surveyed firms pointed to strong practice management as important in ensuring they can manage through the recession, while 90 percent of the respondents said that firms with strong practice management procedures would be able to recover more quickly from the recession.
As to when accounting professionals expect the economy to recover, the vast majority of the surveyed firms predicted that the economy would improve before 2011, with 55 percent reporting that the recovery would happen this year (28 percent) or by the first half of 2010 (27 percent). Twenty-nine percent believe the recovery will happen in the second half of 2010. Only 13 percent think well have to wait until 2011 to see better days, and 3 percent were unsure.
For more information and charts, visit www.cch.com/press/news/Economy2009_CHARTS_f.pdf.