Since Monday I have spoken with several experts in the field and numerous accountants to try to determine why this industry has done so well in the recession. There are a few pockets of the country where this is not true, such as Southern California and South Florida, where the local economy is in particularly bad shape.
I found that the big four accounting firms are not experiencing the profit or sales growth that small niche firms are.
Many small business accountants don’t have the bookkeeping businesses they once did, and many are finding profitable niches in business consulting, business valuation, and other non-bookkeeping-specific income producing activities.
These small business accountants are small businesses like their clients, and many of them face the same challenges as their clients.
According to an Intuit survey of 250 accountants and 250 small businesses conducted in July 2008 and again in January 2009, the following trends have emerged between small businesses and their accountants:
- Nearly 80 percent of small business owners now say they feel more comfortable having an accountant as a trusted business advisor during this rough economic time.
- 73 percent of accountants are proactively advising their clients on how to conduct business during the economic downturn.
- In order to help small business owners weather the economic storm, 66 percent of accountants have increased the services they offer, with the biggest demand being business consulting.
- More than 90 percent of accountants and small business owners are taking nearly identical steps to succeed and grow their firms including: increased networking, adding new services or products, and providing training and education to clients.
Rich Walker, an Intuit Accountant Communications Manager, emphasized that, according to recent surveys, accountants’ expectations about what their clients thought about their value and their clients’ actual expectations have grown much closer. In January 2009 approximately 98 percent of accountants believed their clients were somewhat or very satisfied with their work, while 95 percent of small business owners actually responded that they were somewhat or very satisfied with their accountant’s value.
Walker indicated that Intuit has been doing this survey since 2003 and there was a much larger gap in the early years between what the accounting professional and client believed in terms of satisfaction of clients.
In discussions with other accountants I have learned that many small business accountants believe the QuickBooks family of products has dramatically improved over the years since it was first introduced. Those same accountants don’t see QuickBooks as a threat, but rather an opportunity. CPAs who better understand how to use QuickBooks can provide “over the shoulder” guidance to their clients that use the product, while taking the data and making sure it is GAAP compliant. The client wins because they have lower bookkeeping costs, while the accountants win because they get to bring a higher value service to their client.