Quarterly Industry Update from Our Managing DirectorFebruary 13, 2018
What’s top of mind in the accounting industry lately? New disruptive technologies, the recent tax overhaul, and a shift in hiring trends, to name a few. Read more thoughts on the industry from our managing director Alan Litwin.
As I pointed out to my colleagues this week during our quarterly staff meetings, 2018 promises to be a very good year for KLR. We left 2017 with such positive momentum, and I know this will only continue into 2018. We have experienced a notable growth in profits, have five innovative ideas that we are implementing from our Shark Tank Innovation Challenge, and so much to look forward to in 2018 and beyond as we become a more creative and data-driven firm.
A few thoughts...
My colleague, Mike Tousignant (KLR Executive Vice President) and I attended the Major Firms Group of the American Institute of Certified Public Accountants last month. It was enlightening to hear from industry leaders on trends they are seeing within the marketplace.
Here are a few of the themes that were discussed:
Managing short-term profitability while taking a look at long-term issues that are going to disrupt it- There are risks involved in finding a healthy balance between new innovative ideas, and managing the day-to-day functions of a business. Operating models could be upended by new technology, new companies, and more data. Finding success will depend on the agility of a business to take risks and fail faster and so they can innovate and execute ideas quicker.
New disruptive technology- Becoming more data-driven in every aspect of business is a high priority for firms nationwide. Disruptive technology is becoming more prevalent and will play a bigger role in our day-to-day activities as we depend more on our smart phone, AI and cyber-security.
Hiring more data, computer focused grads- Over the past few years, there has been a move towards hiring more students with technology degrees more so than accounting and finance. There are fewer accounting grads than ever (down 9.5% this year and 19% over the last two years) due to the increased desire for recruits that are adept in data analytics and technology. Firms want associates who can master new things efficiently.
Firms are going beyond just offering assurance services - Firms know that the audit of the future is going to bring with it a lot of change and firms are realizing that the way we perform an audit today will be nothing like how it is performed in the future. Firms just don’t know how to make the change and many are supplementing their “typical tax and accounting” services with specialty consulting services.
Cybersecurity- Businesses should be prioritizing cybersecurity more than ever, especially Nonprofits. Board members should be bringing the topic up at every board meeting to identify and remedy any threats in their existing practices.
Sustainability- This will continue to be a growing trend with firms nationwide. Otherwise known as corporate responsibility, sustainability is a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities.
Compromises under the TCJA- The Tax Cuts and Jobs Act was a huge overhaul to the tax code, and it will take a while to digest. It affects every facet of business in every industry we serve. Our recent webinar is helpful if you or your business is having trouble navigating the changes, download it here: “The Impact of Tax Reform on Businesses and Individuals”
Trends in office space- It’s becoming commonplace for businesses to have open floor plans, meaning no offices, (yes, even for partners).
These are exciting times, and there’s lots going on! The industry is as dynamic as I can remember it. I think the opportunities in 2018 and after are just spectacular for us.
Until next time,