October 28, 2021
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One recurring theme in this newsletter of late has been: What’s next for accounting firms? One way to think about this question is—and I’ve said this before—what problems do businesses need help solving? For a while, firms had to focus on helping clients’ survive. The pandemic upended everything; many firms advised clients on PPP loans and other rescue programs; they built a lot of goodwill, made some money, and learned that there were a lot of opportunities to offer their clients more than the legacy services like tax, audit, and bookkeeping.
Now things are… less weird? Millions more people are working remotely, millions are quitting their jobs, vaccine mandates are a thing, compensation packages are more important than ever. I could go on, but safe to say, it’s all still a little chaotic for employers at the moment, and it doesn’t feel like things will quiet down for a while.
So maybe this stuff—people stuff and the problems around it—are the right problems for (at least some) accountants to help solve. I can just imagine the marketing campaigns: “People are complex and scary! We’re CPAs. Let’s help you onboard them better.”
And look, you don’t have to take my word for it. People—maybe your clients!—agree with me:
Small businesses are increasingly relying on their accountants for advice on hiring as the labor shortage continues during the pandemic.
Over one-third of business owners are willing to pay 10% more than they currently pay for an accountant who provides advice on onboarding employees, optimizing company culture, or understanding how company morale can boost business results, according to a new survey.
Full disclosure: Gusto did this survey, and this is a Gusto newsletter, so maybe there’s some bias here, but also: I don’t know if anyone else is really asking these kinds of questions. That is, what types of things do businesses want advice on and are willing to pay more for it? My colleague Luke Pardue thought we should find out:
“Even before the pandemic, the way that people and business owners managed their teams was changing and accountants and accounting professionals were already playing an increasingly important role. When you think about how automation and software were taking the place of some of the work that accountants had been doing previously, more accountants were using this financial expertise. They had to answer personnel questions in order to broaden their horizons and their business services. They were giving more advice about people operations already before the pandemic.”
Luke’s questions were for business owners, so one thing I’m still wondering is: How many firms were actually able to charge for those expanded services? My hunch is, not many, but I’d be fine if someone proved me wrong.
Last week at Gusto Next, we announced the People Advisory Accelerator, which was designed to help accounting firms launch a People Advisory practice so they can do this work—work that clients want!—and get paid for it. Because, as we’ve discussed, doing work for free is okay sometimes. I don’t think most accountants want to make a habit of it, though.
I have spent a great deal of time writing about accounting firms and their future, things they might do, and services they might provide. The backdrop of all this is that accounting firms already do many things that have worked out pretty well! Not all of these things will do well in the future, but some of them will.
One thing that we can almost certainly expect to continue is new ideas for taxing the absurdly wealthy. And with every new idea for taxing the absurdly wealthy comes novel tax planning strategies for them to avoid the new taxes. It doesn’t even matter if the new ideas will never become law, like the recent idea of taxing billionaires’ unrealized gains on publicly traded stock. People don’t take any chances:
Mike Kosnitzky, co-head of the private-wealth practice at law firm Pillsbury Winthrop Shaw Pittman LLP, has spent the past few days talking with a dozen or so ultrawealthy clients potentially affected by the plan.
The proposal would motivate the very wealthy to shift from publicly traded assets into other assets that wouldn’t be taxed each year, he said. They may still be able to use complex strategies they have turned to for years like moving assets into foundations and other tax-friendly vehicles. New approaches will likely crop up.
Ah, yes, yes. Old strategies, of course, but new approaches will crop up! And accountants will be the ones cropping them. If you’re in this line of work, first—good on you—and second, I don’t suspect you read this newsletter to get new service ideas for your firm. You’ve got enough going on.
Fresh from Gusto
- Are your clients looking to offer a retirement plan? Have them start 2022 with a 401(k) with our retirement partner, Guideline, and they’ll pay no employer fees for 3 months. Offer ends December 31, 2021. Learn more.
- Creating a marketing plan for your firm.
- How to turn payroll into a $1M revenue stream, just like Michael Ly is doing.
- The History of Payroll & Benefits with Greg Kyte and me on November 1.
- 401(k) and Tax Benefits for SMBs with Nicolle Willson of Guideline on November 3.
- The Ultimate Guide to Leveraging a Software Vendor’s Accountant-Partner Program with Will Lopez on November 8.
- A Coaching Experience: Envisioning a New Reality with Amber Setter on November 8.
- Fraud: What CPAs Need to Know About Ponzi & Pyramid Schemes with Greg Kyte and me on November 9.
Read with Gusto
- “The auditors splashed out on a €9.95 seven-day-subscription to an Asian porn site, bought ‘coins’ for the football video game Fifa 19 worth $23.08, ordered a breathalyser for €33.45 and spent ¥1,000 on bitcoin.
- The secretive hedge fund that is gutting newsrooms.
- Cigarettes made a comeback last year.
- Back-to-the-office anxiety.
- Crypto Investors Are Bidding to Touch a 1,784-Pound Tungsten Cube Once a Year