Revenue inched up an average of just 1.4 percent at CPA firms around the country last year, in sharp contrast to previous years, as the recession hit the accounting industry with full force.
The Rosenberg MAP Survey, from Rosenberg Associates and the Growth Partnership, found that the recession affected firms of all sizes, especially when the impact of mergers was factored out. The recession did not affect all firms in the same way, said Marc Rosenberg, CPA. Thirty-eight percent of firms had growth of 5 percent or more, while 41 percent of firms suffered a decline in revenues. This disparity is striking,
Profits, as measured by income per partner, averaged $354,000, down only 3 percent from 2008. With revenues flat for the first time in recent memory, its remarkable that CPA firm profits only declined by 3 percent, said Charles Hylan of the Rosenberg Survey Team. Firms reacted to the recession challenge by laying off staff, giving out minimal salary increases, and cutting overhead expenses, he noted.
Average annual staff charge hours nosedived, averaging only 1,466, almost 50 hours per person lower than 2008. Firms simply didnt have enough work to keep their staff busy. Although 50 to 60 percent of all firms laid off staff in 2009, the remaining firms chose to retain all their staff, preferring to avoid morale problems and preserve talent for the hoped-for economic recovery.
One bright spot for CPA firms is that for the first time in at least 15 years, experienced staff are now available in most markets. Firms are taking advantage of this by upgrading their staff
Projections for 2010 show a slight improvement over 2009. Overall, firms are projecting a modest 2.6 percent growth rate, and considerably fewer firms are projecting negative growth rates for 2010 compared to 2009.
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