Trends in global accounting market to drive change in U.S. CPA profession

"A combination of three trends has seen clients engaging more closely and more profitably than was the case when the majority of CPA services were compliance driven. Many firms report a reduction in the number of clients being more than offset by an increased amount of revenue per client; in fact, CPAs describe the culling of clients as a cathartic experience."
Bruce Coombes, CEO, QuickFee

Trend #1 - Virtual CFO/ Client Accounting Services

With cloud accounting, the availability of bank data feeds and significant technology shifts, the capacity for CPA firms to offer Virtual CFO/ Client Accounting Services (CAS) has increased exponentially. In the UK and Australia, these services are wide spread and in some cases can represent more than half the revenue of a CPA firm.  

CAS Services are delivered at a fixed price and typically involve monthly billing. Most firms deliver these services without using time sheets as the basis for determining billings.

Trend #2 - Asking questions rather than answering them

Firms are moving from answering questions to asking them as compliance services become more commoditised and the well documented talent shortage across the CPA profession causes capacity constraints. 

Rightly or wrongly, millennials want interesting work, do not see billable hours as the path to partnership and wish to gain early access to clients and the provision of non-compliance services. These desires and the millennials technology talent lend themselves well to moving a firm’s clients from compliance to reliance. Well delivered CAS services mean the clients, partners and staff have more accurate, real time quality data than has ever existed before. This means firms can transition to being genuine business advisers and coach their clients towards running a better business.

Millennials can teach partners a lot about technology and would be happy taking clients on the journey to the cloud discussed above and working with experienced partners to deliver highly valued business advice. Many clients will pay six figure annual fees for a combined CAS and business coaching service. Firms in Australia and the UK which are providing these services are achieving much higher effective hourly rates and working less hours.

Firms report that the removal of seasonal peaks in compliance workload are replaced with a steady flow of advisory meetings at a timetable set by the firm rather than the IRS. Clients shift to embedded reliance on their CPA.

Trend #3 - Firms are getting paid

"A survey of approximately 500 Australian CPA firms found a 15% reduction in receivables in just 2 years. This reduction is attributed to the combination of firms enjoying fixed monthly fees as a result of the above 2 trends and the offering of multiple payment options including clients financing their CPA fees with companies like QuickFee."

With succession being a significant issue within many US CPA firms, the reduction in working capital requirements through better working capital management reduces the entry price for incoming partners.

About QuickFee

QuickFee, based in the U.S. and Australia, is an Alliott Group strategic partner, offering specialized professional fee funding for accounting and law firms and helps invoices get paid on time and in full. For more information, please email Bruce Coombes or call +1 424 299 2466.