CPA Profession Is Shaken but Poised for Opportunity Despite COVID-19
Most organizations, including accounting firms, are facing a new business environment. The world looks very different than it did earlier this year when many firms were planning their 2020 projects and budgets. Inovautus Consulting, in collaboration with the Association for Accounting Marketing, conducted a survey to learn more about the marketing and growth outlook for the CPA firm profession.
We received responses from 109 firms and 95 unique respondents.
Overall Results by Firm Size
The survey covered a mix of different size CPA firms ranging from less than 1 million in revenue and greater than 30 million in revenue.
Overall Results by Job Title
Source: Inovautus Consulting Growth Outlook Amid COVID-19 Survey
The respondents represented a range of roles, including Managing Partners, Partners, Principles, Marketing Director, Marketing professionals, and Business Development professionals. While the survey asked for various titles, we grouped respondents into two primary categories for the majority of our analysis. All Partners and Principles fell into the Shareholder group while everyone else fell into the Marketing group.
Overall Survey Results by Percentage of Advisory Services
Source: Inovautus Consulting Growth Outlook Amid COVID-19 Survey
Finally, we asked firms to indicate what percentage of their revenue came from various service lines, including tax, audit, advisory/consulting, wealth management, and other. The goal was to identify if their outlook or anticipated impact on growth changes as a result of how much advisory work they do. These numbers were self-reported and not substantiated. For our analysis, we further grouped the advisory/consulting and wealth management categories with others aligned with advisory to conduct a more meaningful analysis. We grouped all respondents into five major categories based on natural trends in responses and where we see breaks nationally.
Throughout our analysis, we consistently assessed the impact of firm size on outlook, job title, and percent of advisory services compared to responses around growth. When relevant, we report on these findings.
In the coming days, we will be sharing the results of the survey on our blog. Our summary of key findings is outlined below.
Summary of findings
The summary of findings in this survey centered around three main areas:
Growth outlook is shaken
Firms of every size face the same conundrum as a result of COVID-19 ramifications: Their outlook on growth does not look the same today as it did in January of 2020. While it’s clear there is an expected decline in the initial growth percentage goals for 2020, that doesn’t mean firms will not see growth this year. It will just look different than what was planned. Differences in firm size impacted the outlook related to growth, whether positive or negative, and philosophies on business development and marketing had an impact on outlook positivity. Overall, firms are optimistic about continuity, even if growth goals aren’t met this year.
Commitment to marketing is still present
While marketing is usually the first area cut in times of economic stress such as 2008, the crisis created by the pandemic has presented a different mindset around a commitment to marketing. Overall, many firms are taking a wait-and-see mentality. Firms are using cautious optimism and realigning dollars in response to the now-virtual business climate. Savings can be made in in-person events/trips and partner spending, and dollars can be reallocated to digital marketing efforts. Sponsorships can sometimes be a large portion of a firm’s marketing budget, and the profession overall is showing a commitment to sticking with those initiatives and supporting their communities.
Advisory services key to longevity
Firms have long been focused on making the transition from compliance to advisory services, and while the challenges presented by COVID-19 and related legislative opportunities have altered focus, a commitment to advisory services is still proving the catalyst to firm growth. While a subset of firms is launching new services (mostly related to PPP) or enhancing existing services, some are taking a wait-and-see mentality here as well. The critical task for firms looking to grow is how to pivot from PPP and other compliance work toward more long-term advisory services. Important to note is that clients who feel they didn’t receive adequate support during the crisis will be looking elsewhere for advisory eventually.
Overall, the events of 2020 have undoubtedly shaken CPA firms and their perceptions on what the year would look like for growth, but that doesn’t mean opportunity does not exist. Some firms may find themselves thriving as 2020 draws to a close, while others will be focused on surviving. Outlook, philosophy, and optimism will be driving factors in which way the pendulum swings for CPAs.
Each of these key findings will be summarized in greater detail with supporting data analysis of the survey results in subsequent articles to follow. To ensure you’re notified when each article is published, subscribe to our blog so you don’t miss the additional findings.