Unlocking Success: Future-Proof Your Accounting Firm with Strategic Succession Planning and Global Partnerships

Strategic succession planning is a critical aspect of future-proofing your public accounting firm in North America. As you craft your roadmap for 2024 and beyond, it's essential to consider various predictions, trends, and recommendations that can steer your CPA firm towards sustainable growth and remaining independent.

Staffing

  • As the war for talent is still in a “crisis mode ” in North America, firms will invest more resources into outsourcing work offshore and acquiring firms or growing their existing firms in India and the Philippines and other countries. In the next five years, growth-oriented firms will outsource at least 20% of their chargeable time.  
  • As succession planning continues to be challenging, career development and leadership training will further expand into firm CPE curriculums. Firms will need to increase their staff performance management, training, mentoring and coaching.  
  • Public accounting firms will increase their efforts to recruit talented partners from other firms. Ideal targets will have leadership and practice development skills and partners who are experts in industries and niches. Diversity, equity, and inclusion (DEI) initiatives will continue to be a competitive differentiation, especially in attracting talented professionals.  
  • To compete for talented professionals, accounting firms and international accounting associations will continue to offer remote work options for partners and staff throughout 2024 and way beyond.
  • CPA firms will promote staff to partner ranks quicker than in the past as a retention strategy.

Marketing 

  • More CPA firms will outsource their marketing, practice development, and lead generation programs to consulting companies.  
  • As businesses expand globally, firms will need to better understand international accounting and tax regulations and the complexities of cross-border transactional reporting.  
  • Joining an international CPA association or CPA alliance can benefit a firm by providing the resources to compete globally and nationally and allow small firms to compete more effectively with larger firms. Promoting these extended capabilities within the firm’s marketplace can easily lead to revenue growth and profitability. 
  • As routine A&A tasks become more automated, firms of all sizes will be expected to shift towards providing more advisory services.  
  • Rapidly changing technology will play an even more significant role in marketing.  
  • As a result of the above, marketers will be better equipped to generate sophisticated ROI-driven reports, perform precise market research, collaborate with BD professionals, target prospective clients, implement digital marketing and social media campaigns, and use videos and creative designs to illustrate case studies and testimonials.  
  • CPA firms will become even more selective about which new clients they accept and will be more willing to decline undesirable new business. Firms will continue to increase their minimum fees for tax services as well as audit and assurance clients. More accounting firms will clearly define their target clients based on maximizing revenues and profitability, resources, and specialties, and develop a strategy to market their services to specific desirable prospects.
  • More accounting firms will adopt a long-term, continuous marketing strategy to focus on quality clients and will be more willing to terminate relationships with ‘C’ and ‘D’ clients to engage clients with high realization rates without hiring more staff. Marketing for quality, not quantity, may be one of the most important business decisions firms will make to add value to their practices and ensure the firm’s long-term success.  

Management  

  • The traditional partnership structure will continue to fade away and will be replaced by a more corporate type of structure. More CPA firms will hire professional Chief Operating Officers to assist the partners in managing their organizations.
  • Firm leaders will be more inclined to develop and implement strategic plans that they will be held accountable to achieve. There is a growing demand for sustainability and environmental, social and governance (ESG) reporting. Firms will need to develop expertise on measuring and reporting on sustainability measures, as clients face increasing pressure to disclose their ESG efforts.
  • To take full advantage of the favorable marketplace for accounting firm services, partners need to be accountable and take on the roles of highly effective client relationship managers, trusted advisors, and rainmakers — not grinders. CPA firms of all sizes will increase their menu of consulting and advising services to remain competitive.
  • Unrelenting increased competition for professional staff, rising staff labor costs, increased regulations, and client demands will force CPA firms to carefully examine their mix of services, industry concentrations, and niches.
  • Client engagement profitability will be more scrutinized and evaluated, and partners will be held more accountable for increased realizations and other profitability KPIs.  
  • More accounting firms and global accounting alliances will build their knowledge of generative AI and assess the opportunities and the risks of implementing the transformative technology into their practices.

In conclusion, strategic succession planning is not just about preparing for the future — it's about positioning your firm to thrive in a dynamic and competitive industry. By embracing the resources and opportunities offered by international CPA associations and CPA alliances like MGI Worldwide, firms can chart a course towards sustained success and prosperity.

The future is bright for accounting firms that can implement initiatives and strategies to adapt to the changing marketplace and the needs of quality clients. 

This article was written courtesy of MGI North America Regional Director, Joe Tarasco.
 

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