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Practice management

The year ahead for accounting: 2019 in numbers

ByDaniel Hood
December 10, 2018 4:49 PM

In order to see what CPAs and accountants believe 2019 has in store for them -- and what they have in store for it -- we conducted our annual survey of over 800 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.

In addition, a panel of industry experts and thought leaders share what they expect 2019 to bring the accounting profession here.

AT-YA2019-Growth expectations
For firms of all sizes, the most common expectation was that they would experience middling growth in 2019 (from 2-5%), but that masks something of a shift from last year, with more firms likely to report double-digit growth, high growth (from 6-9%) or low or declining growth (1% or less).

For instance, 27% of small firms expect double-digit growth in 2019, versus 19% last year, while 36% expect low or declining revenues in 2019, versus 27% last year.
AT-2018-YearAhead--Small Firm Issues
Handling tax reform has taken the top spot in small firms' list of major challenges, pushing down acquiring/retaining new clients, keeping up with regulatory change, and keeping up with new technology to the No. 2, No. 3 and No. 4 spots, respectively.
AT-2018-YearAhead--Midsized Firm Issues
Tax reform took over the top spot among midsized firms' concerns as well, with recruiting and retention popping up to second place, from No. 3 last year.
AT-2018-YearAhead--Large Firm Issues
Large firms are much less concerned about the TCJA than they are about recruiting and retention, which remains a perennial top challenge.
AT-112918-Tax Season expectations 2019
While the plurality of accountants who expect the coming tax season will be better than the last is roughly the same as last year (just over 40%), the percent who expect it will be worse doubled -- no doubt in expectations of the impact of the Tax Cuts and Jobs Act.
Year Ahead 2018 - Tax Season Saturdays
Overall, things are looking up: The percentage of firms requiring staff to work all Saturdays is down six point from last year, despite the looming TCJA. The drop is roughly the same across all sizes of firms, but small firms remain the least likely to require the Saturday commitment, with only 28% enforcing it, against 35% of midsized firms and 47% of large firms.
AT-2018 Year Ahead--Strategic plans
Large firms remain in the lead when it comes to putting plans in place for the future, but there remains room for improvement at all levels.
AT-2018 Year Ahead--New service areas
Client accounting services remains the most popular new offering for accounting firms, though two of the other most popular services -- payroll and nonprofits -- actually have higher levels of penetration in the profession. Of the top four, only technology services/cybersecurity are growing fast from a low base.
AT-2018 Year Ahead--Current technology budgets
Most sizes of firms kept their technology budgets even with last year -- only midsized firms registered a major change, boosting their spend by almost two percentage points.
AT-2018 Year Ahead--Tech budget increase
More small and large firms are aiming to increase their spending on technology in 2019; the percentage of midsized firms that plan to make IT a bigger part of their budget remained roughly the same as last year.
AT-2018 Year Ahead--Association and network membership
Large firms are much more likely to be a member of a firm network or association, but this year, a higher percentage of small firms are looking to join.
AT-2018 Year Ahead--Social media use
LinkedIn and Facebook are for everyone, but large firms are twice as likely to user Twitter as small and midsized firms.
Daniel Hood
Editor-in-chief, Accounting Today
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