Accounting firms expect the recession to affect their business over the coming year.
Thirteen percent of the CPA firms polled over the summer for the "CPA Firm Statistical Analysis Reference Handbook 2009," published by the Institute of Management and Administration, were already anticipating the effects of the economic downturn and said they expect to see negative changes in revenues for the year ahead. While 37 percent of CPA firms still anticipate a 5 percent to 10 percent revenue increase in the fiscal year ahead, 55.6 percent rated the economy as the most significant factor that could curtail revenues.
Owner compensation rose slightly over the prior year's averages at the CPA firms surveyed by IOMA, with the highest-paid partner groups averaging compensation (pay only, without any bonuses, perks or benefits included) of $347,071. Owners in the middle range averaged $204,292, while the lowest-paid owners averaged $153,918.
Net income per partner averaged $283,364, up from $280,009 in the prior year's survey. Billing rates have not yet been altered, despite the early effects of the downturn being felt through fiscal 2008. The survey found that 51.5 percent of the CPA firm respondents raised their rates during the fiscal year.
Firms have trimmed their average collections period to just 54 days, an important step during a recession, since quick collections can help ensure a continued cash flow. The economic downturn has not brought much relief to those firms still struggling with attracting and retaining staff, particularly mid-level staff. The survey found that 45.1 percent of the firms reported shortages in staff members with three to five years of experience, and 44.0 percent were lacking in staff with six-plus years of experience.
Marketing budgets are holding steady or rising at CPA firms. The average investment in marketing was 2.7 percent of revenues. Firms are also investing in technology, spending an average of 5.2 percent of revenues.
