The Growth Outlook®
A bi-annual survey and report on the state of growth across the accounting profession.
At Inovautus, we know that good data is the cornerstone of strategy.
When we developed the Growth Outlook® Survey in 2020, we did so with the intention of learning what the profession was doing in the face of crisis and their outlook for an uncertain year. Now, the survey has become a mainstay for accounting firms and finance organizations.
The Inovautus Consulting Growth Outlook® Survey takes a bi-annual pulse check on the state of marketing, sales and overall growth across the accounting firm profession. Participant firms, representing a diverse cross-section of revenue and geographic identity, help us uncover trends, shifts, and intentions. The insightful results of the survey inform and educate decision-makers, movers and shakers, and the just-plain curious.
Are you ready to take action on the 2024 Growth Outlook® Survey?
We survey firms of all sizes, growth rates, and go-to-market strategies on various initiatives that are impacting growth in accounting firms. In the survey, we asked questions around:
- Revenue Generation
- Budget Investment Changes
- Client Culling Precentages
- Client Experience
- Growth Challenges
- Staff Head Counts
- Operational Support
- Pricing Strategies
- Sales Strategies
- Technology
We compiled over 50 data points in our Growth Outlook® Report, and you can access them all!
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Explore Results from Prior Years
Are you ready to take action on the 2023 Growth Outlook® Survey?
Over 100 firms participated in our Growth Outlook® Survey and the results are in. We benchmarked firms of all sizes, growth rates, and go-to-market strategies on various initiatives that are impacting marketing and sales.
In the survey, we asked questions around:
- revenue generation,
- budget investment changes,
- client culling percentages,
- growth challenges,
- staff head counts,
- pricing strategies, and
- sales strategies
We compiled over 50 data points of key operational information in our Growth Outlook® Report, and you can access them all!
We asked firms to report the percentage of revenue from tax, audit & accounting, client accounting services (CAS), and advisory & consulting.
Growth Challenges
We asked firms to rate their top 5 barriers to growth, and it’s not surprising that they agreed that staffing and capacity were their number one concerns.
Pricing Methods
We found that most firms are embracing new pricing methods but at a slow pace.
- Hourly rates still dominate the pricing method for tax
- Subscription and value-pricing models are more popular with the fastest-growing firms
- CAS and advisory firms are more likely to introduce more diverse pricing methods
Sales Efforts
Cross-selling opportunities were up from 51% in 2021 to 65% in 2022. This is a strong initiative for most firms with approximately two-thirds tracking these opportunities.
New business comes from client referrals (49%) and networking (27%) are the top sources of new business. This shows a steep decline in pursuits and marketing efforts. Historically, firms have relied on network referrals to grow their practice, but there seems to be a shift from network referrals to more client referrals.
Key Operational Support
Increasingly, firms involve marketing and sales in activities outside their traditional responsibilities, such as;
- client experience,
- mergers and acquisitions,
- recruiting, and
- employee retention
Marketing & Sales Technology
We asked firms about the challenges they face using their CRM. The responses seem to indicate there is an opportunity for firms to engage in CRM training to increase use and improve operations.
As firms reflect on their growth strategies for the year ahead, the 2023 Growth Outlook® Survey serves as both a benchmark and a roadmap. The data is clear—firms that invest in marketing and sales talent, embrace new pricing strategies, and engage cross-functional teams in operational support are positioned to thrive. Whether your firm is navigating staffing challenges, reevaluating pricing, or exploring technology solutions, these insights offer actionable takeaways to help guide strategic decisions and sustain momentum.
Our third survey set out to understand how firms are moving beyond the COVID-19 pandemic.
How are CPA firms adapting their 2022 budget to accommodate changes from COVID-19? Are they rewarding their teams for business development and sales efforts in the modern selling environment? Inovautus Consulting, in collaboration with the Association for Accounting Marketing, explored these questions and more in the 2022 Growth Outlook® Survey for CPA Firms.
We asked:
- How firms view the potential for growth in 2022, and where they see opportunities
- How they plan to modify billing rates and changes in pricing strategy
- How they’re adjusting business development activities in a remote environment
- What new technologies they’re investing in
- Where they’re adapting spending on marketing efforts
- And much more…
Results for many of the questions are broken down by firm size to help your firm measure your efforts against firms of similar size to yours. This year’s respondents were almost evenly distributed among firms with $2-9.99 million in revenue, those in the $10-30 million range, and those with more than $30 million based on 2021 figures.
Investment in Growth
Firms, their partners, marketing and business development professionals use the answers to the Growth Outlook® survey to measure their own growth efforts against those of their peers to identify how they can improve their strategy. The survey results provide them with information on:
- Where firms see an increase in accounting and advisory services
- How firms view the demand for specific industry support, and whether they’re trending up or down
- What marketing technology firms are investing in, such as marketing automation and CRM, social media, email marketing, and proposal software (to name a few)
With staffing being of concern for many firms, the 2022 survey also explored the outlook for hiring and expanding their marketing and business development teams this year – and how they plan to do so.
Business Development Strategies
The COVID-19 pandemic forced many changes – and new strategies – when it comes to business development, but are firms returning to pre-pandemic activities? While some are sticking with new business development activities adopted in the past two years, others are looking to blend tried and true with new efforts.
Pricing Approaches
Pricing and billing methodologies are changing as the accounting profession emerges from changes brought about by COVID. How are firms adjusting their approach?
- Are they raising rates, and, if so, by how much?
- Are they incorporating new methodologies, such as value pricing, subscription, or flat fee?
- Where do administrative and technology fees fit into client billing?
Having an inside window into how firms comparable to yours are adjusting strategy to meet the challenges – and capitalize on the opportunities – in this new environment.
CPA profession thinking positive on growth, continues to adapt to challenges of COVID-19
Now that the world has lived through over nine months of a global pandemic, industries and professions are starting to get a stronger handle on what growth looks like through the remainder of this crisis and beyond. Inovautus Consulting, in collaboration with the Association for Accounting Marketing, conducted a survey to learn more about the growth outlook for the CPA firm profession under the new normal.
We received responses from 57 total firms and 54 unique respondents.
The survey covered a mix of different size CPA firms including firms with less than $1 million in revenue, firms with $1 to 2 million in revenue, $2 to 5 million, $5 to 10 million, $10 to 30 million, and firms over $30 million in revenue.
Overall results by job title
Roles represented in the respondents included managing partners, partners, principles, marketing professionals, and business development professionals. Two primary groups were established for our analysis when comparing results: Partners and principles fell into the shareholder group, and the remaining roles were added to the marketing group.
Firm size, job title of the respondent, firm services, and the marketing/business development budget were all considered in our analysis for their impact on growth outlook going into 2021. Relevant correlations between these demographics will be reported within the findings. Below you will find our summary of key findings. This information is also on our blog.
Summary of Findings
The summary of findings in this survey centered around three main areas:
- Growth outlook®
- Service lines
- Commitment to marketing/business development activities
Growth outlook® is improving
With more time living with the pandemic and better understanding of client, employee, and firm needs, respondents of the survey had a better outlook on growth going into 2021. In an earlier survey done in the spring of 2020, growth outlook® was significantly shaken, with many firms anticipating a negative outlook on growth. However, tides are turning, and CPA firms are more likely to anticipate no impact to revenue or some increase in revenue due to new service opportunities. Potential opportunities and barriers to growth exist, and firms are anticipating revenue from projects like the Paycheck to Protection Program (PPP) to continue, while client retention and staffing issues could be hinderances. Overall, there was optimism among the participants on the future of the firms, and over two thirds of respondents expect to meet their growth goals in 2021.
Services continue to evolve and pivot
The PPP essentially forced CPA firms to expand their service offerings in 2020, and with the extension of the program and another round of funding, it is likely firms will continue to offer these services well into 2021. How does this impact firms when the dust settles on PPP? Firms are already reporting and increase in their client accounting services/cash flow planning, and many are anticipating repackaging or introducing other new services in 2021.
Investments in technology, virtual communication likely to pay off
Firms found themselves communicating with clients in greater rates than ever before thanks to the pandemic and related legislation. This increased their client exposure and opened them up for greater cross-sell opportunities. For some firms, this meant greater investment into marketing technology and virtual communication tools, given the nature of the pandemic, than what they’d done before. It also forced some firms to establish a content creation program if they did not previously have one in place, giving them a solid entry point into consistent client communication.
However, despite this uptick, firms reported they are expecting some cuts to their marketing/business development budget to continue into 2021 as events are cancelled and discretionary spending is cut back. Firms that ride the waves of the momentum they’ve gained in digital marketing will come out ahead when things return to normal (or a new normal).
Overall, CPA firms have quickly adapted to the turbulent energies of 2020 and are riding that into 2021. They’ve come to terms with what the state of the marketplace is now, and they likely know their clients, and their firms, better than ever, giving them a more positive outlook on growth. The knowledge gained of clients’ needs during this time can be translated into repackaged and enhanced service offerings, and the investments in energy toward content marketing will continue to pay off long after this crisis has passed.
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
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
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®
- Commitment to marketing
- How services relate to growth potential in 2020
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.
Interested in participating in the next Growth Outlook® survey?
The Growth Outlook®
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