Partnerships

Small and midsized firms need to prepare for a world of reduced liquidity and lower organic growth.

For small and midsized CPA firms, one of the most common complaints among both line partners and senior management involves compensation and annual adjustments.

Here are some of the significant disclosure items that are either already required, or will be required, for next filing season.

The last several years have seen a “merger frenzy,” with small and midsize CPA firms (with annual revenues between $10 million and $24 million) getting acquired by larger CPA firms that have a strong brand and a track record of average to above average equity partner profitability.

Marketing directors and partners at accounting firms share the same goal: advancing the firm’s brand and helping it achieve specific growth and profitability targets.

For years, accounting firms have relied on firm partners to use their personal and professional connections, charisma, and contacts to “make it rain” — to bring in new business and revenue that would enable the firm to grow and succeed.

The Internal Revenue Service’s announcement last month delaying a requirement for reporting partners’ share of partnership capital offers some extra time to busy tax practitioners, but the issue still isn’t going away and may lead to some other problems.

The seven characteristics of a strong firm compensation plan.

For tax year 2018 filings, the IRS made a drastic change to the Form 1065, U.S. Return of Partnership Income, that went unnoticed by most practitioners.

There is considerable dysfunction in many smaller firms when it comes to management and corporate governance.