Blog: AICPA Economic Crisis and Recovery Center

Is the housing bust over?

Yesterday, CNN reported that new home sales soared in June over May.  Could this indicate that the housing bust has ended?  The news story mentioned that while the new home sales were up 11% in June over May, the median home sale price was down 3%.

It’s uncertain how much Stimulus incentives for new home buyers helped spark the sales surge, and I’m sure you can get varying opinions about whether or not the stimulus plans helped.

Whether it did or didn’t isn’t as important as seeing the housing market starting to open up again.  The result could be banks freeing up credit to potential homeowners which will then hopefully free up commercial credit to home builders as they are able to sell off inventory.

I’m not sure what will quantify an end to the housing market issues.

Do you think this is a sign of the end of the housing bust?

Do you think the increase can be attributed to the Stimulus incentives?

Leave a comment and give us your thoughts.

– Mark Koziel

Are your job skills ready to meet the challenges of the next generation?

A friend of mine called me over the weekend.  He was checking out the job posts on the AICPA web site and stumbled upon the Social Media Specialist job post.  Turns out this type of position is becoming quite popular.  According to Revolution Magazine, Best Buy is seeking a “senior manager – emerging media marketing” and requires, in addition to the proper education, 250 followers on Twitter.  Hey wait…I only have 83 followers on Twitter.  I wouldn’t qualify!

So it made me think, what new skills must we possess in today’s marketplace?  What new technologies do we need to know as CPAs?

For CPAs, skills that may be hot in the future include a working knowledge or training on IFRS. CPAs may also want to consider expanding their experience in forensic accounting, and perhaps even seek to complement their professional qualification with the new CFF credential from the AICPA.  As far as software, knowledge and experience in driving a paperless conversion continues to be a hot topic.  We also hear CPAs say that sharpening their skills on the latest trial balance and tax software is essential.  What about the latest G/L packages out there?  Keeping up with changing software is a must.

What new skills are you working on to stay current to the profession? Post a comment.

– Mark Koziel

Federal Government considers TARP money for small business

The Washington Post reported that the federal government is considering making some of the $700 billion in the Troubled Asset Recovery Program (TARP) available to small businesses around the country.  There aren’t any details behind what is being proposed, but, according to the article, the Treasury Department seems to be in favor of the idea while the National Economic Council seems skeptical.

The article discusses the fact that some in government feel that small business America will be the sector to help spur the economy out of this recession.  Some economists estimate that small businesses employ 60-80% of the workforce and if the small business community can access funding for growth and employment, the economy will get back on track.

There’s been some question on the effectiveness of the initial stimulus package and the potential for a second stimulus bill.  It isn’t clear whether this use of the TARP funds is a way to avoid another stimulus bill. It sure seems to make sense if the funds are there and this will get the banks lending at a faster pace so small businesses can access credit to stay afloat or even expand.

Be sure to watch as this story continues to develop over the coming weeks.

Do you feel small business lending is a proper use of the TARP funds? If you work for a small business or have small business clients, what’s the greatest need to help you grow and increase employment right now? Post a comment.

– Mark Koziel

Client Retention at the Top of CPA Firms’ Minds

This week, the AICPA’s Private Companies Practice Section (PCPS) announced the results of the 2009 CPA Firm Top Issues Survey. This survey asks firms of all sizes to rank their top practice management issues. The results are provided by firm size and provide the AICPA’s PCPS section with critical information to focus future deliverables.

For the first time in several years, recruiting and retaining talent did not top the list for firms with 2 or more professionals. Nor did tax complexity top the list for sole practitioners. Instead, client retention was the number one issue facing all firms. There’s little doubt the economy has something to do with this and it comes as no surprise to me.

I’ve confirmed this issue with many practitioners from around the country and there seems to be a few reasons for this concern. Some have said clients are looking at their fees to try and reduce costs and are leaving for a small decrease in fees. Companies of all shapes and sizes (including CPA firms) are looking for ways to reduce costs.

As firms grow increasingly concerned over losing clients, the firms who are surviving, maybe even thriving during this economy have found that client retention really comes back to client service. During the last few years, when firms were extremely busy, focusing on getting the work done became a greater priority than client service.

During these difficult times, companies can’t do enough to improve customer service and make sure they are serving, not only customer needs, but customer wants as well. The firms that are currently winning the race are doing just that. The successful firms are also meeting with current clients more frequently and staying in tune with client wants. The successful firms understand that in order to prevent the price shopping of accounting services, they need to be their clients’ trusted business advisor, not just another vendor.

PCPS has created a Client Service Resource Center to help its member firms refocus on client service. The Center has articles, tools and learning documents to help firms improve client service and teach everyone within the firm better client service strategies.

What is your organization doing to focus on customer retention? Post a comment.

– Mark Koziel

CPA Firms Give Economic Outlook

Last week, the AICPA’s Private Companies Practice Section (PCPS) announced an Economic Outlook survey to which just over 1,000 CPA Firms responded. Questions on the economy were added to this year’s PCPS bi-annual CPA Firm Top Issues Survey. Results of the top issues will be announced later this week.

There are some good signs for the profession in this economic survey. First, when asked what the greatest impact economic downturn has had on their firm, between 15%-25% of firms with 20 professionals or less reported no impact, while just over 10% of firms with 10 professionals or less are actually seeing additional client opportunities. When combining firms with no impact and firms seeing additional opportunities, nearly one-third of firms with 10 professionals or less, in the survey, are seeing no impact to growth.

Now, look at another category: strain on Accounts Receivable. Around 30% of all firms said that strain on A/R has been the greatest impact. Strain on receivables is a growing concern for all businesses these days and those firms and organizations able to manage cash flow will make it through just fine. The two areas of greatest concern going into the survey launch for me were reduction in revenue, layoffs and reductions in new hires. Reduction of revenue is a concern with 25%-30% of each firm size category saying that this is the greatest impact to their firm. But again, it seems positive that it is ONLY 25-30% of the respondents and if you were to drill deeper, you’d likely find that these firms are in certain geographies that are harder hit by the economy than others.

Regarding layoffs, less than 15% of firms with 21 or more professionals stated this as the greatest impact, which also shows that the layoff issue isn’t large for our profession. Firms with 20 or fewer professionals each had less than 5% of respondents state this as an issue.

As I’ve traveled the country I’ve been speaking to various size firms and this survey confirms what we hear about our profession. Larger firms have been harder hit than smaller firms, but not significantly. This has caused some layoffs for some larger firms, but the cuts aren’t deep and are really more performance based (Rather than calling it performance based, I like to consider it differences between firm culture and where the person can succeed).

Small firms seem to be just fine. In fact a few are looking for talent.

The economy has affected the world in many ways; what do you think has been its greatest impact on our profession as a whole? Post a comment.

– Mark Koziel