Confidence in the Business Climate Much like the general business community and consumers, accountants were lukewarm about Q1 2016’s economic performance. Accounting Today’s Accountants Confidence Index (ACI) for both the short-term and mid-term was tepid. The ACI for May and June 2016, however, increased both months into much more positive territory after April’s tumble from March. Surveyed accountants were also more confident about the growth of their firm and small, midsized and large clients. According to an Accounting Today October 2015 survey of more than 600 accountants, 26.8% expected their 2016 revenues to increase by more than 10%; followed by 20.0% by 4–5%; 19.7% by 2–3%; and 13.1%, no growth or decline.

Winning New Clients Although BDO USA was the leader among the largest accounting firms in terms of acquisition of new audit clients during 2015, at 42 total, RBSM and MaloneBailey, two smaller firms, were overall leaders in net new acquisitions, at 40 and 37, respectively. Among the Big 4 accounting firms – PwC, Deloitte & Touche, Ernst & Young and KPMG – only Deloitte Touche had a net positive growth in new audit clients, at +5. The others were all net-negative. Another small firm, EisnerAmper, led in new audit client acquisitions during Q1 2016, at +5 total and +4 net. Although all of the Big 4 firms gained new acquisitions, only Deloitte Touche had a positive net gain.

A Much Better Year According to Accounting Today’s 2016 Top 100 Firms report, total 2015 revenues for these firms increased 9.32%, compared to approximately an 8% increase each year from 2011 through 2014. The smaller firms on the list, or those with annual revenues of less than $100 million, actually performed slightly better than the top 7 firms, or those with more than $1 billion in annual revenues, at 9.77% and 9.66%, respectively. Overall, the Big 4 remained at the top of the list, with Deloitte & Touche first at $16.15 billion in US revenues; followed by PwC, $12.2 billion; Ernst & Young, $11.19 billion; and KPMG, $7.89 billion.

Why Accountants Lose Sleep According to the American Institute of CPAs’ (AICPA) 2015 Top Issues Report, “keeping up with changes and the complexity of tax laws” was the biggest challenge for sole practitioners, with “seasonality/workload compression” second. “Finding qualified staff” was #1 among firms with 2–5 and 6–10 professionals, while it was “retaining qualified staff” for larger firms, with 11–20 and 21 or more professionals. A June 2016 Accounting Today article echoes these sentiments, with owners of small accounting firms indicating their biggest challenge was not just finding qualified staff, but also younger professionals who aren’t traditionally attracted to smaller firms.

Returns and Refunds Not surprisingly, age was a primary influence on when Americans filed their 2015 tax returns. Of adults, 18–24, 33.1% had filed by February 2016. Both adults, 65+, and adults, 55–64, were the largest groups planning to file during April, at 23.0% each. Income had a similar influence, as 64.8% of those with incomes of less than $50K had filed by February, compared to 57.1% of those with incomes of more than $50K. More of these higher-income filers were waiting until April, or 16.1%. Filers with incomes of $50+ were the largest group expecting a refund, or 70.0%, compared to 60.4% of those with incomes less than $50K. Adults, 25–34, were the largest age group expecting a refund at 78.3%.

Questioning Tax Preparation Services’ Integrity According to Plunkett Research, the $10-billion tax preparation services industry is expected to generate $11.7 billion in revenues by 2022, or a 17% increase. As Americans continue to push for a simplification of the income tax system, tax preparation services are being closely scrutinized because of the tax preparation fees being charged low-income Americans, who qualify for Earned Income Tax Credit (EITC). According to a Progressive Policy Institute April 2016 report, tax preparation services seem to focus their marketing on these taxpayers; and some are paying 13% to 22% of their EITC refund to file their taxes, although there are methods to file for free.

Advertising Strategies Considering the amount of time many Americans, and Millennials specifically, spend online while watching TV, accounting firms who want to generate more business from young adults would be wise to use the two media in combination with Millennial-age spokespeople. Accounting firms should initiate and market a robust and proactive referral program, which has been traditionally a highly productive source of new clients. Provide a choice of incentives – coupons and discounts from local retailers – to generate maximum referrals. Suggest a “Let’s Put Your House in Order” promotion with accounting firms offering a free “house call” to discuss an individual or couples’ financial situation, making them feel more comfortable meeting with an accounting professional in their home.

New Media Strategies Few professionals are better served than accountants with a blog. People are looking for trusted, professional advice to guide them through the complexity of the tax code and for strategies to protect their assets; and a blog will help build that trust. Accountants can also build their brand and trust and generate goodwill by participating in and/or supporting community organizations and causes and using their social media platforms to attract volunteers, donations and be another voice for the cause. A joint TV-new media campaign to reach Millennials should drive them to social media sites with content that inspires them to become savers/investors. Accountants as presenters in videos would generate trust and deliver messages in Millennials’ preferred format.