Identifying—and tackling—top challenges for firms like yours
It’s 2 AM, and you’re lying awake thinking about some of the biggest challenges for your practice and how to address them. You’re wondering, “Am I the only one facing these issues? And what’s out there on the horizon that I’m not even aware of?”
You should be able to sleep better after reviewing the latest results of the PCPS CPA Firm Top Issues Survey. Conducted every two years, this unique study asks practitioners to rate their most pressing challenges and then presents the results by firm size: firms with one professional; with two to five professionals; six to ten professionals; eleven to twenty professionals; and twenty-one or more professionals. The findings can reassure you that other practitioners in firms like yours share your concerns and can also reveal issues that perhaps should be on your radar.
What considerations are top of mind for CPAs in 2019? We found a mixture of emerging and familiar challenges. Here are just a few key takeaways from the results for smaller firms.
Privacy and technology have moved front and center. All firms picked managing privacy/security risks (e.g., cybersecurity, data breach, etc.) as one of their top five issues. That’s a topic that was virtually absent from the top concerns in the last survey, taken in 2017. Sole practitioners also chose keeping up with changes in technology and associated costs (e.g., upgrading hardware, updating software, outsourcing IT, moving to the cloud, etc.) as a top-five concern, and this issue was on the top ten list for other firms with fewer than 10 professionals. I think practitioners are focusing on this area because we continually hear cautionary tales about the latest data breach or service disruption. Add to that the outage that occurred at a major software vendor just after busy season and you can understand practitioners’ concerns.
There’s a wealth of resources for CPAs seeking to address privacy and security risks, including:
- The AICPA Cybersecurity Resource Center, the main source of cybersecurity resources from numerous AICPA sections.
- The PCPS Exploring Cybersecurity Toolkit, featuring learning resources, staff training tools and tools to help clients assess their cyber risks.
- Hacked! Building defenses against and responses to intrusion, a checklist PCPS members can use when they believe data has been compromised.
Complexity and compression are critical issues. Keeping up with new tax laws, maintaining technical excellence and dealing with seasonal workload are always primary concerns among smaller firms, and that was also the case this year. In 2019, there was the added challenge of applying the new rules of the Tax Cuts and Jobs Act and communicating them to clients. This season may have been more difficult than others, but it’s fair to say that complexity and seasonality will remain important issues that practitioners should include in their strategic planning.
In your planning sessions, remember that there are great tools available to AICPA members to address complexity. Find them at the AICPA Tax Reform Resource Center and the Tax Compliance Resource page. You can also make tax season easier using some of the tax season resources created by PCPS and the AICPA Tax and Personal Financial Planning sections. For workload compression, consider streamlining your practice to serve only the clients who provide the highest value and are the most pleasant to work with. Use the PCPS Client Evaluation Tool to assess which ones meet those criteria.
Staffing remains a high priority. Finding qualified staff has long been a significant concern for firms, and this year it was once again the #1 issue for all firms except sole practitioners. Retaining qualified staff came in among the top ten for firms with two to five and six to ten professionals, as well, and was in the top five for firms with eleven or more professionals. Tools to tackle these concerns include:
- The Staff Development and Culture section of the PCPS Firm inMotion e-Toolkit.
- The PCPS Human Capital Center, with numerous resources firms can use to recruit, develop and retain talent.
- The PCPS Diversity & Inclusion Toolkit, whose sections are aimed at helping you attract, recruit, retain and advance diverse talent.
Get a head start
As always, this year’s survey made for fascinating reading. When you review the findings, in addition to today’s top issues, don’t miss CPAs’ insights into the concerns that will be affecting their practices over the next five years, as well. They can help you gain a sense of what’s next for your firm.
No matter what size your firm, you can use the survey results as an outline for your next strategic planning session. Are you experiencing these challenges? Are any of them a future threat? If so, what steps should you be taking to address them? These types of discussions can help you get a head start on identifying and avoiding common challenges.
Carl Peterson, CPA, CGMA is the Association’s Vice President of Small Firm Interests. Have questions for Carl? Contact him directly at firstname.lastname@example.org or 651-252-4618. And be sure to sign up for Carl’s Small Firm Update webcasts. The next one will take place on September 26 at 2:00 to 3:00 PM ET.