PPP, ERC CAN LEAD TO SUSTAINED BUSINESS FOR CPA FIRMS

19/02/2022, 09:05

Compliance and consulting work related to COVID-19 relief created new business opportunities for CPA firms, which now can continue to grow by building on those opportunities, Inovautus Consulting LLC President and Founder Sarah Dobek said Thursday.

Data from the firm's 2022 Growth Outlook Survey showed that 58% of respondents reported that COVID-19 had a positive impact on their revenue, and just 2% said the pandemic had a negative impact. During a webcast presenting survey findings, Dobek said much of that added revenue was a result of firms helping clients with Paycheck Protection Program (PPP) and employee retention credit (ERC) compliance and consulting work.

The firms that performed this work now have a competitive advantage over those that didn't, Dobek said. The work represented an expansion of services for their existing clients as well as new services for new clients.

"The firms that dived in and really were doing this, whether they were just focused on their own clients or whether they were really out marketing and promoting it, it was a big part of that revenue growth driver in 2021, and it's having a huge impact on their outlook going into 2022 as well," Dobek said.

The economic devastation of the early days of the pandemic had business leaders desperate to find answers to questions about the complicated relief programs that were designed to help them survive.

In what some leaders have called one of the profession's finest moments, CPA firms stepped forward to help businesses navigate the challenge of gaining access to government assistance and having certain loans forgiven.

Dobek said firms have an opportunity to turn the warm feelings and connections they built with clients during this time into permanent business. If new clients were pleased with this work, there is an opportunity for firms to perhaps take over the clients' entire book of business.

"This was a fantastic launching pad, but we also know that some of that revenue isn't [repeatable]," she said. "If they're doing the right things on the BD [business development] side, there are opportunities to leverage it."

The Growth Outlook Survey, which polled 70 firms, showed that 65% of respondents expect a higher rate of growth in 2022 than they had in 2021. The pandemic environment also has created challenges for firms, as Dobek said maintaining staffing has been difficult for many firms.

But the goodwill built with clients has been significant.

"It will be interesting to see what the impact of that is [in the] next year and how firms are capitalizing on what really is a fantastic opportunity for those that have used this to not just serve their existing clients but really get in front of prospects as well," Dobek said.

The survey also showed that:

Although 55% of respondents said they don't expect any changes to their billing practices in 2022, 25% expect to change to value pricing. Dobek said many firms used value pricing for their ERC work, and some firms are moving toward value pricing for just some of their business lines at first. "It may not be firmwide, but they'll pick an area to start out with," Dobek said.

Almost all respondents expect to raise their prices in 2022; the most common increase will be between 3% and 10%. Dobek said firms need to charge what they're worth to compensate for higher staffing and overhead costs. "We did see that this year, some firms did very substantial increases because of that compensation and some investments they made into some market correction around that," she said.

Source: www.journalofaccountancy.com

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