Top firm challenges in unprecedented times

Top firm challenges in unprecedented times

During this unprecedented time, you might be wondering if other practitioners are struggling with the same issues as you and your firm. Good news, curious ones. CPAs across the country have weighed in on what is keeping them awake at night in the 2021 PCPS CPA Firm Top Issues Survey and the eagerly awaited results are now in. Conducted every two years, the findings of this popular survey identify current challenges that practitioners face and those they anticipate over the next five years.

Want to learn the latest scoop? Interested in exploring resources that you can use to help resolve your firm’s biggest challenges? You are in the right place.

Key findings

Let’s start with the current snapshot. Survey results revealed a hybrid mix of new contenders and familiar struggles.

New kids on the block

• Business relief programs
  A clear sign of the pandemic, firms of all sizes identified keeping up with COVID relief programs such as Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), Employee Retention Credit (ERC) as a leading concern. With COVID cases again on the rise, economic recovery will continue to be top of mind for the foreseeable future.

• Working with the IRS
  Practitioners identified their frustrations in dealing with the IRS as a concern. Problem areas include staffing issues, long wait times to connect with agents, outdated systems and delays in processing returns and refunds.

Familiar faces

• Staffing
  Finding, keeping, and developing talent continues to be on the minds of most firms. This familiar problem has created a renewed focus and energy around recruitment and retention efforts.

• Tax issues
  Once again, an array of tax related challenges trouble many practitioners. Keeping up with the changes and complexity of tax laws and the seasonality and shifting tax deadlines are causing much of the uneasiness.

Noticeable departures

• Managing privacy and security risks
  With security threats on the rise during the pandemic, it is surprising not to see this issue in the top five lineup this year. Despite its absence, it is more important than ever for firms to address this increasingly prevalent threat.

• Succession planning
  A recurring concern during the past three surveys, succession planning was among the notable departures in 2021. However, firms with six or more professionals identified developing the next generation of firm leadership, which is an important element in the succession planning process.

Challenges by firm size

For a more telling comparison, here are the top five struggles by firm size:

Sole practitioners

1. Keeping up with changes and complexity of tax laws
   

2. Keeping up with COVID relief programs

3. Challenges when working with the IRS

4. Seasonality/layering of deadlines

5. Keeping up with changes in technology and managing associated costs

Firms with two to five professionals

1. Keeping up with COVID relief programs

2. Keeping up with changes and complexity of tax laws

3. Challenges when working with the IRS

4. Seasonality/layering of deadlines

5. Finding qualified staff

6 to 10 professionals

1. Finding qualified staff

2. Keeping up with changes and complexity of tax laws

3. Keeping up with COVID relief programs

4. Challenges when working with the IRS

5. Developing the next generation of firm leadership

11 to 20 professionals

1. Finding qualified staff

2. Developing the next generation of leadership

3. Keeping up with COVID relief programs

4. Keeping up with changes and complexity of tax laws

5. Tie: Effective staff utilization and management – Challenges when working with the IRS

21+ professionals

1. Finding qualified staff

2. Retaining qualified staff
   

3. Keeping up with COVID relief programs

4. Developing the next generation of firm leadership

5. Tie: Effective staff utilization and management - Managing work/life balance initiatives

Looking forward

Now let’s switch gears and explore what is on the horizon. Here are the main challenges that practitioners anticipate over the next five years.

• Uncertain regulatory environment
  Firms of all sizes identified changes in the regulatory environment as a key area to be addressed as they look to the future.

• Staffing
  A repeat performance from 2019, all sized firms except sole practitioners identified this area as a top concern in the short-term.

• Emerging technologies
  Sole practitioners recognized emerging technologies such as data analytics, artificial intelligence and blockchain atop their concerns for the next five years and all sized firms indicated it was a consideration.

• Managing a hybrid workforce
  This new challenge of managing remote and onsite staff was identified by firms with six or more professionals.

• Political instability
  Smaller firms included this area among those they will need to watch.

• Adapting to clients’ changing needs
  Practitioners noted the importance of staying close to their clients during this extraordinary time to identify and address their changing needs.

Putting the knowledge to work

Now that you are in the know, you can use this new information to strengthen your practice and better serve your clients. Here are some simple steps that you can take now in your firm:

• Engage in conversations with your colleagues and peers on the findings.

• Review issues faced by firms of your size

  • What were your top five concerns?

  • Were there issues of importance to you and your practice that didn’t make this list?

  • Were there additional challenges on the list that were not among your top five? If so, does your firm also struggle with those?

• To prepare for challenges that your firm may experience as it grows, take a few minutes to explore issues of the next largest firms.

  • Is your firm currently facing any of challenges?
    

  • If not, have you considered how these could impact your practice in the future?

• For more information and additional insights, review the 2021 Top Issues commentary: Familiar challenges in extraordinary times.

Valuable, timesaving resources

To help solve the issues that you and your firm are facing, check out these tools and resources that you can put to work now:

• AICPA Town Hall Series (Related challenge: Keeping up with COVID relief programs)
  This frequent series delivers the latest news, analysis, insights and practical guidance to help you understand and respond to the most pressing issues facing the profession.

• SBA Paycheck Protection Program (PPP) resources for CPAs (Related challenge: Keeping up with COVID relief programs)
  Gain insight and the latest news about PPP loan programs so you can provide your clients with the assistance they need.

• PCPS Diversity and Inclusion Toolkit (Related challenge: Finding qualified staff and retaining qualified staff)
  Increase your firm’s diversity and culture of inclusion with this toolkit filled with easy-to-use resources.

• PCPS CPA Firm Competency Model (Related challenge: Developing the next generation of firm leadership)
  This customizable career ladder, exclusively available to Private Companies Practice Section (PCPS) members, outlines five core competencies and the related behaviors to drive staff development and performance.

• Tax Section Odyssey podcast (Related challenge: Keeping up with changes and complexity of tax laws and challenges working with the IRS)
  Hear the latest tax developments, trending issues and other tips to elevate your firm’s tax practice.

• Tax extension FAQs for clients (Related challenge: Seasonality/layering of deadlines)
  Filing extensions for clients can smooth your workload. Use this FAQ to learn best practices for handling the extension process.

• CPA.com solutions (Related challenge: Keeping up with changes in technology and managing associated costs)
  These resources help practitioners stay at the forefront of technology and drive transformation of core practice areas.

• PCPS Accountability tools (Related challenge: Effective staff utilization and management)
  This team exercise, exclusively available to Private Companies Practice Section (PCPS) members, will bring self-awareness, structure and clarity for more engaged and accountable staff.

• PCPS Flexible work arrangements guide (Related challenge: Managing work/life balance initiatives)
  This guide, exclusively available to Private Companies Practice Section (PCPS) members, will help staff balance their professional careers with their personal commitments.