It's a great time to run an accounting firm — and there are plenty of opportunities to make it even better.
While the top firms across the profession certainly face a wide range of challenges, the leaders of Accounting Today's 2024 Top 100 Firms and Regional Leaders also see a host of new developments, new trends, new technologies and new ways of thinking that they can leverage to both face those challenges and thrive going into the future.
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To start, the broad economic environment that firms are operating in is pretty favorable. Growth rates are strong, and demand for all of the services that accounting firms offer is high.
As Jay Rasmus, a partner at MahoneySabol in Glastonbury, Connecticut, put it, "The fees keep going up and there seem to be many opportunities to get new business."
"The demand for services has never been greater," agreed Tom Sulewski, CEO and president of Bellevue, Washington-based Clark Nuber. "There are opportunities for boutique firms specializing in narrow niche areas to thrive, and there are opportunities for full-service firms to also expand and grow."
That broad demand is meeting a narrower trend within the profession to create windfalls for many firms.
"The ongoing consolidation in our industry, driven by M&A and private equity deals, presents a valuable opportunity for our accounting firm," explained Kim Crevelling, marketing manager at Rochester, New York-based EFPR Group. "As some clients experience displacement due to these market shifts, we are positioned to acquire new clients, expand the team, and specialize in niche areas. … This is an opportune moment to attract skilled professionals who may be seeking new roles due to changes within their previous organizations."
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"With continued mergers and a shortage of staff, larger firms are cutting clients and these clients are flowing down to smaller firms," added Scott Crane, managing partner at Ridgefield, Connecticut's Reynolds Rowella.
It isn't just M&A that's easing the competitive environment and freeing up clients, according to Tom Cripps, firm administrator at Grand Rapids, Michigan-based Hungerford CPAs. "Many practitioners are retiring, so there is less competition and fee pressures, which allows firms to be more selective in the business opportunities they go after and be more profitable."
High demand and a perennial talent shortage, however, have much of the profession pushing up against capacity constraints, and that can cause client service to suffer — which is, in turn, creating work for other firms.
"Our new clients are a result of lack of client services by competitors," explained Brandon Miller, president and CEO of HW&Co., in Cleveland. "If we continue to enhance client service, it will create significant opportunities in 2024."
Stretch goals
Client appetite for traditional accounting services is such that it would be easy for firms to stick with those, but many of the Top 100 and Regional Leaders see a much greater opportunity in building on top of those core offerings to provide more valuable, more profitable services.
"Our clients truly value and respect us — how can we stretch ourselves and get out of our comfort zone to deliver more services to them and help to solve more of their problems beyond compliance projects?" asked Aaron Dawson, CEO of Opsahl Dawson & Co. in Vancouver, Washington.
"Our clients' businesses are becoming more sophisticated, and they expect more from their CPAs," said Suzanne Forbes, managing partner of Gainesville, Florida-based James Moore & Co. "Accounting firms need to go beyond filing tax returns and preparing audits and develop a relationship with clients that's based on trust and understanding. A firm that can bring a multidisciplinary skillset and establish this trusted advisor relationship with clients will succeed and prosper."
Deepening that relationship can put accountants in a unique position to guide their clients — and their clients' teams of advisors — to success.
"This shift toward advisory services has been amplified by the pandemic, and it presents a significant opportunity for firms to become their clients' quarterback and coordinate resources like bankers, attorneys and HR professionals to serve the client based on their unique needs," explained Randy Nail, CEO of HoganTaylor, in Tulsa, Oklahoma. "Accounting firms can also specialize in individual industries to deliver significant growth opportunities."
It's worth noting that the shift to advisory services won't just deliver more value to clients — it will also hedge firms against the looming commoditization of some of their core services.
"We recognize that there may come a time when the traditional role of data entry and compliance tasks becomes obsolete," said Mark Duren, managing shareholder of Omaha, Nebraska-based Lutz. "Therefore, our focus should be on embracing more consulting and advisory work. The value of traditional accounting functions will diminish as clients increasingly seek comprehensive business solutions that drive their success. Given the invaluable real-time data and tailored advice that accounting firms can offer, we firmly believe that business owners will continue to rely on our expertise."
The bleeding edge and beyond
Many of the firm leaders touting the importance of advisory services noted the central role that technology will play in enabling those offerings — and many more firm leaders see tech as a central opportunity in and of itself.
"The most significant opportunity we identify for accounting firms in the current landscape is the strategic embrace of technology and innovation," said David Bier, a partner and chief operating officer at Huntsville, Alabama-based Anglin Reichmann Armstrong. "As the industry evolves, the firms that proactively leverage these elements are set to distinguish themselves, offering more value and efficiency to their clients while optimizing their internal operations."
His firm is placing a concerted emphasis on innovation, prioritizing advancements in software, operational efficiencies and technology. "This approach marks a deliberate pivot from traditional methods, such as reliance on offshore labor, to a more future-focused strategy that leverages technology as a cornerstone for growth and service enhancement," he said.
"Ongoing digital transformation opens doors for firms to streamline operations, enhance client communication and explore new avenues for remote work, enabling greater flexibility and efficiency," explained Mike Gillis, CEO of Greensboro, North Carolina-based DMJPS. "Embracing these opportunities requires a proactive approach to technology adoption, continuous professional development and a commitment to staying ahead of industry trends."
And Dawn Moeder, managing partner of Dallas' Lane Gorman Trubitt suggested that embracing technology is as much about mindset and education as it is about early adoption: "While not every firm can be on the bleeding edge of tech, it is important for all firms to be aware of how technology is affecting not only our profession but our clients."
For every firm leader that pointed to the potential of technology to elevate a practice, there was another who pointed specifically at artificial intelligence as an opportunity for accountants.
"As AI transforms other industries, it also has transformative potential for accounting firms. It will play a key role in transforming how firms respond to evolving market conditions and regulatory trends," said Julie Boland, chair and managing partner of Big Four firm Ernst & Young, who added that AI will not displace accountants — it will only help them do their jobs better.
"We know that generative AI will help people deliver services in a more productive, meaningful and efficient way," agreed KPMG chair and CEO Paul Knopp. "Identifying how to design, build, deploy and use AI solutions in a strategic and responsible way will be crucial to seizing new opportunities and accelerating value for clients with confidence."
Both AI and the broader idea of digital transformation can boost firms in a number of different ways.
"This transformative wave of technology offers the potential to revolutionize the way accounting and auditing services are delivered," said Avani Desai, CEO of Tampa, Florida-based Schellman. "Not only does it promise enhanced efficiency, accuracy and speed in routine tasks, but it also holds the promise of freeing up accountants and auditors from the burdensome load of repetitive administrative work. … These tools act as force multipliers, allowing teams to achieve more with existing resources."
Some made the point, however, that all this potential comes with some risk.
"While AI has the potential to revolutionize the way business is done, it must be embraced in a responsible manner," warned Mark Baer, CEO of Chicago-based Crowe. "Companies must act responsibly and in accordance with the highest standards of ethics, integrity and quality as we all navigate this rapidly evolving technology. Firms must consider data security and privacy implications, regulatory compliance, technology biases and data accuracy as they integrate AI into their operations."
Meanwhile, Lane Gorman Trubitt's Moeder noted, "The AI that we are seeing now will be the most rudimentary AI we'll ever see," she said. "For firms to harness that potential, it will also require leaders to seek out and value more diverse skill sets."
Changing the profession
All of the opportunities described above require planning, vision and effort, and at a time when revenues are strong and staff hard to come by, it can be hard to generate enthusiasm for that kind of thing. Imagine, then, how much harder it would be to convince the profession that it's time to completely rethink everything they do — and yet some firm leaders think that's exactly what should happen.
For instance, Chris Bellamy, CEO of Cleveland's Cohen & Co., highlighted "the opportunity to transform the historical business model of accounting firms to adapt to the needs of the marketplace while becoming the employer of choice."
And while flush times may make it easier to put off that kind of reorganization, some of the major issues facing the profession may require wholesale change.
"It's no secret that fewer people are entering the world of public accounting out of college, and that's forced organizations to rethink decades of processes," said Jay Rammes, managing director of Barnes Dennig in Cincinnati. "As with all challenges, this also provides an opening for innovation. For us, it's given us a chance to rethink how we structure the firm and serve our clients through process changes, creative staffing models and adoption of strategic technology."
Other firm leaders posited more narrowly focused changes, with Michael Rompa, CEO of Geffen Mesher in Portland, Oregon, suggesting "truly reimagining the business model as it relates to hiring, staffing and compensation."
Meanwhile, Tracy Hom, managing partner of San Francisco-based Realize CPA, said, "I believe that the biggest opportunity for accounting firms today is rethinking the model of what it means to be an accountant. I believe that this can be a truly rewarding career where you are constantly learning and able to develop close relationships not only with colleagues, but with clients."
Making the most of these opportunities will require serious effort — but perhaps more important, it will require forethought, planning and intentionality.
As Mac Hartman, chief marketing officer of Buffalo, New York-based Freed Maxick CPAs, put it, "Invest time establishing the vision for what you want to build. Develop a process to make efficient and informed decisions that provide clear direction and enable transformation activities."
