2016 in Numbers
December 2, 2015 3:56 PM
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Predictions and Plans for the New Year
In order to see what CPAs and accountants believe 2016 has in store for them -- and what they have in store for it -- we conducted a survey of 600 firms of all sizes in late October, on everything from their growth expectations to their plans for tech spending, their use of social media, and the new services they're offering.
Growth Expectations, Pt. 1
Breakdown for all firms: Over 10 percent -- 26.8 percent; 8-9 percent -- 6.1 percent; 6-7 percent -- 9.4 percent; 4-5 percent -- 20 percent; 2-3 percent -- 19.7 percent; 1 percent -- 4.9 percent; flat or decline 13.1 percent.
Breakdown for small firms: Over 10 percent -- 32.1 percent; 8-9 percent -- 2.8 percent; 6-7 percent -- 5.7 percent; 4-5 percent -- 15.4 percent; 2-3 percent -- 17.1 percent; 1 percent -- 6.5 percent; flat or decline 20.3 percent. There was a big jump in small firms expecting to growth over 10 percent -- almost a third this year, as opposed to less than a quarter last year (22.7 percent).
Growth Expectations, Pt. 2
Breakdown for midsized firms: Over 10 percent -- 24.9 percent; 8-9 percent -- 7.6 percent; 6-7 percent -- 7 percent; 4-5 percent -- 23.8 percent; 2-3 percent -- 23.2 percent; 1 percent -- 4.3 percent; flat or decline 9.2 percent.
Breakdown for large firms: Over 10 percent -- 21.3 percent; 8-9 percent -- 9 percent; 6-7 percent -- 16.9 percent; 4-5 percent -- 22.5 percent; 2-3 percent -- 19.7 percent; 1 percent -- 3.4 percent; flat or decline 7.3 percent. The number of large firms expecting growth between 2 and 3 percent dropped from over 30 percent last year to under 20 percent this year, with the gains spread throughout the higher categories.
Biggest Issues: Small Firms
The next three most commonly cited issues for small firms were acquiring and retaining new clients (40.2); keeping up with regulatory change (34.1 percent) and keeping up with technology (26.8 percent).
Biggest Issues: Midsized Firms
The next three most commonly cited issues for midsized firms were acquiring and retaining new clients, and keeping up with regulatory change (tied at 32.4 percent), and recruiting and retaining good employees (28.1 percent).
Biggest Issues: Large Firms
The next three most commonly cited issues for large firms were recruiting and retaining good employees (62.4 percent), acquiring and retaining new clients (37.6 percent) and keeping up with regulatory change (24.2 percent).
Tax Season Expectations
Firms are generally more optimistic about tax season the upcoming tax season, with more than half thinking it will be better than 2015. Small firms are less likely to require staff to work all Saturdays during the season just over a third require it (35.4 percent), while almost half of large firms do (48.3 percent).
Making Plans
We also asked about health and wellness programs (23 percent of firms have one, and 9 percent plan to implement one in 2015), and efforts to diversify their staff (18 percent already make efforts to promote diversity, and 11 percent plan to do so in 2015).
New Services
Its worth noting that client accounting services once again ranked by far the highest among Plans to Add overall, with 14 percent of all firms reporting that they plan to start offering CAS in 2016; nothing else is more common than wealth management at 7 percent.
Payroll was the service with the most penetration -- 65 percent of firms already offer it, and 6 percent plan to add it in 2016.
Technology Spending
Small firms spend much more of their budget on technology -- among other things, they get fewer economies of scale on large purchases like servers, scanners, etc. -- but they also wont be boosting their spending as much next year, the way large firms are as they ramp up.
New Technologies, Pt. 1
In most cases, large firms are further ahead with adopting new technologies, particularly organizational tools like workflow and practice management systems. The difference is much less when it comes to tools that can be useful no matter the size of your firm, like tax prep software and document management systems.
New Technologies, Pt. 2
We asked about two other technologies, which arent included in the graphs:
-- Customer relationship management software, which only 34 percent of all firms either had already implemented or planned to implement in 2016
-- New billing software, which only 31.5 percent of all firms either had already implemented or planned to implement in 2016.
New Technologies, Pt. 3
Laptops may be much more common at large firms, but the size of firm doesnt play much role in the likelihood of its offering free tablets or smartphones to staff generally less than a fifth of firms of all sizes offer these tools.
Large firms are also much more likely to let staff work remotely -- 77 percent of them allow it, versus 57 percent of midsized firms and 58 percent of small firms.
Social Media
Dont let the large results for Other fool you in many cases, respondents selected that option just so they could have the opportunity to write about how much they disliked social media and didnt have time for it
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