While many businesses continue to struggle to adapt to the challenges presented by COVID-19, small and mid-size accounting firms are finding new opportunities, particularly in the area of advisory services. This is leading to an optimistic growth outlook in the industry.
Future Growth Outlook
A survey of accounting shareholders and marketers conducted in early May by Inovautus Consulting and the Association for Accounting Marketing determined that more than half (53 percent) of participants expected firmwide growth this year but at a slower pace than their budgeted growth rate.
Even more encouraging is that 34 percent of respondents believed they would either meet or exceed their budgeted growth rate. On the other hand, 14 percent of participants believed there would be no opportunities for growth this fiscal year.
In addition to growth rates, 89 percent of respondents were optimistic about their firms’ continuity plans. When asked about the outlook in terms of personal responsibilities, 78 percent of participants expressed confidence their roles and duties would remain the same. Additionally, 84 percent of respondents felt positive about their job security, and more than half (61 percent) of respondents stated they would not be making budget changes to contractor or employee compensation.
“Although these findings are encouraging, readers should be cautioned,” said Sarah Dobek, president and founder of Inovautus. “There is typically a delay in when the accounting industry is impacted by external events.”
Impact on Revenue Growth
Responses to the anticipated impact of COVID-19 on total net revenue goals for the current fiscal year varied depending on the participants’ respective firm size. More than 68 percent of firms expected net revenue to stay steady or decrease by less than 10 percent, while 21 percent expected a decrease in net revenue between 11 and 30 percent.
Close to 40 percent of smaller firms (less than $1 million in revenue) said COVID-19 would have either no effect or a positive impact on revenue growth, and nearly 40 percent of larger firms (more than $30 million in revenue) did not anticipate change. While this is not as positive a growth outlook as previously expected before the pandemic, many accounting firms are still in a solid position to move forward in the new year.
Click here to read the full story in the Fall 2020 issue of Growth Strategies.
About Elieen Monesson
Eileen Monesson, CPC, principal with PRCounts, is a strategic marketer and coach who creates market-dominating brands.