Download ReportOpens in a new window.

Growing your firm

Tips to seize opportunities and help minimize risk

Tips to seize opportunities and help minimize risk

The accounting industry is experiencing a time of change and an increased challenge. Over the past decade, fewer students are pursuing accounting degrees. Those that do often choose not to take the CPA exam. Meanwhile, a large wave of existing CPAs are retiring. Pair those challenges with widespread CPA burnout and you have a severe talent crisis within the profession. In addition to the challenges firms face due to staffing shortages, there is increasing complexity due to new regulations and guidelines as well as rapidly evolving technology.
To attract new hires and retain existing talent, CPA firms are overhauling their work environments to focus on their people and not just their clients. Firms are increasing wages and providing more benefits along with offering remote work and flexible working hours.
In this eBook, we will discuss how firms can capitalize on the current market to increase their profits, scope, and size.

1

Expanding your Areas of Practice (AOP)

In recent years there has been a shift in the responsibilities performed by accountants. Firms that once provided traditional CPA services have found an increased demand to provide a ‘trusted advisor’ role for their clients. With this increased workload and trust, comes the opportunity to grow your practice and increase revenue. But where can you start?

Methods of identifying & researching AOP

There are several ways to identify which AOP could be a good fit for your firm.

Client Demand

Perhaps the easiest expansion route is to provide the additional services that your clients are demanding. This method is appealing to clients who would likely prefer to have all their financial needs met by one firm. To find the services they need, encourage your staff to ask clients specific questions about their personal and professional financial needs.

For example, do they need assistance on business valuations, help with loan applications, succession planning, or new business development? Asking more questions and getting a broader picture of your client’s financial life not only offers opportunities for expansion, but also solidifies your firm’s role as a trusted advisor.

Local Research

To provide services potential clients need, it helps to have an understanding of your local community. A great place to start is by reviewing the income levels of those residing in your general practice area. The Census website provides highly detailed information with a robust and easy-to-use search function. The site features maps and tables on education, income, population, business, and economic factors. You can even search by NAICS code (North American Industry Classification System used by federal agencies to classify businesses and the business economy) to gather data on specific industries in your community. You can also learn more about your potential client pool by joining local Rotary organizations and business associations, starting conversations with local CPAs, investigating professional service firms, or researching services performed by other local.

Study Industry Trends

The accounting industry is multi-faceted. You may be an expert in one area of practice, but there is still plenty you can learn about trending specialties and other services. An easy way to keep up to date is by frequently reading industry publications and visiting well-regarded websites. Some valuable resources include state CPA societies, AICPA groups, the Journal of Accountancy, the National Tax Journal, the AICPA Member Insurance Programs, and the AICPA.

2

Some specializations to consider

A CPA firm is by no means a one-size-fits-all. Today, CPAs have a wide range of niche practice areas they can select. If your firm is interested in branching out, you may want to consider one or more of the following specializations:

Information management & technology assurance

This highly specialized area of practice involves using technical IT and Financial knowledge to reduce risk and support business goals.
Those considering this field may be interested in completing the AICPA Certified Information Technology Professional (CITP) program.

Sustainability/ ESG

A growing area of practice for CPAs involves integrating Environmental, Social, and Governance (ESG) goals into the client’s business operations and plans. By attesting to their client’s sustainability CPAs can help companies become more appealing to ESG-focused investors.

Forensics and valuation services

CPAs specializing in business valuations and forensic accounting use detailed, technical analysis to provide expert testimony, perform internal investigations, valuations, and more. Specialists in this field are certified with the Certified in Financial Forensics (CFF®) credential.

Personal financial planning

Many personal financial decisions have grown complicated in recent years, and there is an increasing need for trusted advisors. While CPAs providing financial advisory services have many opportunities to grow their practice, it’s still important that they consider risks of this area of practice.

Audit, attest and assurance

Audits are vital for many corporations and individuals. Companies must ensure that the financial information they report to stakeholders is accurate and trustworthy. Typical services include attestations, review services, audits, etc.

Government

Accountants provide a variety of services for governmental entities, such as financial, compliance and investigative audits. They may also review expenditures, analyze financial viability, and testify to committees. Accounting professionals who are interested in auditing for governmental agencies may consider getting a Certified Governmental Audit Professional® (CGAP®) certification.

Not-for-Profit (NFP)

NFP work often focuses on compliance, financial reporting, assurance, and governance. Accountants who are looking to expand into this work may want to get a Not-for-Profit Certificate from the AICPA.

Due diligence

Before expanding your AOP, you will want to think about logistics, resources, and risks. Not sure where to start?

Here are some things to consider:

Do you plan to hire a new staff member, partner with another CPA firm, or engage a third party with expertise in this specialty, or will you, or your existing staff take on this new AOP?
What training, research, and certifications are required?
How much time will you need to dedicate to this new AOP?
Do you have enough staff to cover the increased workflow?
How do you plan to inform your clientele of changes and negotiate updated engagement letters and rates with them?
As you think over these questions, take note of what actions will need to be taken and weigh your desired outcome with the resources and time you can delegate to this new venture.

3

Expanding your clientele

There are several methods to increase your client base, and the method you choose may depend on your preferences, your region, or other factors. Some ways to grow your clientele include:

Geographic growth

Opening a new office or moving to a new location can be a great way to grow your practice.
Prior to making a change, you may want to determine if you will need new licenses and if you will move staff or hire new talent. Other factors to consider include: whether you plan to offer new services, the existence of any potential conflicts of interest, and if you have the infrastructure in place to train employees and their monitor performance.

Merger / Acquisition

Merging or acquiring another firm can grow your base of existing clients and increase your staff. Expanding by this method quickly increases your resources and clientele. It’s important, however, to find another firm that aligns with your firm’s core values to ensure a smooth transition. Seamless integration is the key to a successful merger or acquisition. Details such as defining the new firm structure and client acceptance and continuance procedures and determining which clients will continue with the new firm should be ironed out before integration.

Marketing

Marketing can have a large impact on your firm. Campaigns are most successful when they have the financial resources and time to see progress, they are based on your brand voice, and focused on your lead generation goals. If you would like to learn more, the AICPA MBAexpress: Masterful Marketing self-study course could be a good place to start.

Networking

Networking can be a great way to make industry connections and meet new clients. You can join associations, alliances, or networking groups to facilitate referrals. The AICPA offers several ways to network including the Young CPA Community, conferences, committees, and volunteer opportunities.

4

Adding Staff

As we have previously discussed, much of the accounting industry is facing a human capital shortage. Given the declining number of new CPAs in recent years, it is more important than ever to have a strategy for attracting and hiring new talent. We have compiled a series of questions to assess your needs and hiring plans.
Strategic hiring
When assessing staffing needs, you may want to consider the following factors:
  • What is your expected workflow in the coming year?
  • Do you have any current staff members approaching retirement?
  • Are you looking for a new CPA to expand a certain area of practice? If so, what experience or credentials do they need?
  • Should you engage the services of a subcontractor to assist the firm?
  • Could outsourcing or offshoring staff be a good option to support your U.S.-based staff?
Enticing new talent
Accountants are in-demand. To get and keep new staff you may want to consider some of the following to catch the attention of potential new hires:
  • Pay Equity and Transparency
  • Provide Option for Remote, Hybrid work or Flexible Schedules
  • Busy Season opt-out options

5

Vetting new clients and culling clients

Signing new clients is exciting, but you don’t want to have a completely open-door policy. Be mindful of your firm’s capacity when evaluating potential clients or reevaluating existing clients. You want clients who will use your expertise and resources wisely, are responsive, and have minimal risk. If your current clients are taking up a disproportionate amount of your time, it can lead to overworked staff and less time for expansion of your practice.

Vetting new clients

When you take on new clients, you are also taking on additional risk, so you may want to consider taking some of the following actions before having them sign on the dotted line.
  • Review the prospective client’s credit and tax history. This can help you look for any potential red flags and give you a background on their financial condition.
  • Get background information on the potential client. This stage of research can be as simple as a Google search or, if the potential client is a public figure, becoming familiar with their public profile.
  • Speak with the prospective client’s previous accountant and, if necessary, other professional service providers to learn about the client’s working style and receptiveness.
  • Discuss goals, deliverables, and timelines with your potential client to ensure that you are on the same page.
Signing on new clients
Culling new clients
Signing on new clients
return
To start off on the right foot, level set expectations with the following:

Engagement Letter

Establish the scope of the work, identify the client’s and your responsibilities, note limitations of the engagement, identify receivables/deliverables, set your hourly rate/fee payment schedule, set termination parameters, and include language that can help limit your liability in the event of a dispute.

Timeframes

Educate the client on the importance of providing and returning documents on time and discuss any consequences of delaying your work or due to unpaid fees.

Communication

Let clients know that all communication regarding services should be confirmed in writing and determine an agreed upon method of written communication, e.g., via email or your firm’s client portal.
Culling new clients
return
While it’s admirable to work with a client for a long time, there are some clients who may not be worth the risk or time. If you are spending considerable time on clients like this, it can hinder your firm’s ability to grow. Not sure when is the right time to pull the plug? Here are some reasons why you may want to consider disengaging:
  •  Issues with payment
  • Consistently late or incomplete responses to requests
  • Disrespectful treatment
  • Integrity Concern
  • Poor reaction to suggestions and processes
  • Change in client circumstances necessitating additional services beyond your expertise.

1

Fames ac turpis egestas sed tempus 

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Gravida dictum fusce ut placerat orci nulla pellentesque. Mattis enim ut tellus elementum sagittis vitae.

2

Fames ac turpis egestas sed tempus 

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Gravida dictum fusce ut placerat orci nulla pellentesque. Mattis enim ut tellus elementum sagittis vitae.

3

Fames ac turpis egestas sed tempus 

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Gravida dictum fusce ut placerat orci nulla pellentesque. Mattis enim ut tellus elementum sagittis vitae.

6

Insurance coverages to support your firm’s growing risks

Before making changes in the scope of your work or the size of your practice, it may be a good idea to contact your insurance broker or agent to ensure that you have adequate coverage. Some of the most common insurance policies include:

Professional liability

offers coverage for damages and claim expenses due to covered claims related to the performance of professional accounting services.

Cyber 

liability

offers coverage for damages and claim expenses due to covered claims related to the performance of professional accounting services.

Employment practices liability

offers coverage for damages and claim expenses due to covered claims related to the performance of professional accounting services.

Management liability

offers coverage for damages and claim expenses due to covered claims related to the performance of professional accounting services.

Grow your firm your way

There’s no one-size-fits-all plan to growing your firm. The accounting industry is growing more and more complex. Only you can decide how best to grow your firm. We hope these tips will help you make the best decisions for your firm in order to achieve optimal growth. For more information, you can refer to the AICPA Member Insurance Programs website for a wealth of educational materials to help you manage your practice and support your insurance coverage needs.

For a complimentary consultation

Please call Monday through Friday, 8 a.m. to 6 p.m. ET, to speak with a personal insurance advisor. To review our insurance portfolio and risk mitigation resources visit cpai.com.

Note: The information contained in this guide is designed to provide an overview to starting a business, and is not intended to address all issues or provide individual advice. For professional information and advice, be sure to contact your attorney, financial planner, retirement counselor, or others for guidance.

All descriptions, summaries or highlights of coverage are for general informational purposes only and do not amend, alter or modify the actual terms or conditions of any insurance policy. Coverage is governed only by the terms and conditions of the relevant policy.