Accounting Outlook for 2015: An Opportunity for Expansion

For some business owners, an accountant is a savior who solves a problem they didn’t even know they had, in a way they don’t quite understand. But number crunching isn’t the only thing taking up the time of South Florida accounting firms. The Business Journal asked executives from six of the region’s top accounting firms five questions to get a picture of where accounting in South Florida is headed. From competition to talent, the consolidation of firms and the changes – both good and bad – that technology has brought, it’s clear that today, the role of the accountant has changed and involves more than charts and figures. The answers have been edited for clarity and brevity.

How would you compare the market for accountants in South Florida to New York, Chicago, Texas, Los Angeles and San Francisco?

Antonio “Tony” Argiz: In South Florida, our economy has improved drastically over the last three years, and as a result we’re seeing a higher demand for talent in the accounting field. Cities and states where the economy has improved are also seeing increased demand, and overall there are not enough accountants to keep up with need.

Michael Balter: The demand for accountants has been exceptionally competitive in each of these markets, as the need for services has increased in tandem with the strengthening of the economy. Students recognize that the job market for accountants is very strong. Every single University of Florida student who graduated with an accounting degree last year found employment.

Richard Berkowitz: South Florida had an early start to its recovery, and firms with a focus on real estate and international work began hiring early to assist clients as they began testing the market again. During the Great Recession, few firms were hiring and training new certified public accountants, so the market for CPAs with five to seven years of experience is tight everywhere.

Blain Heckaman: Generally, market opportunities for accountants in these regions and cities have steadily improved over the last couple of years. As the economy has improved, clients are in need of additional services and new businesses are emerging. Specifically, the market opportunities in South Florida have been ahead of the national curve, especially for accountants specializing in the real estate and/or construction industries, and those with international tax consulting expertise.

Michael Spritzer: I believe that the market is much tighter in South Florida than in other major metropolitan areas. The pool of talent is larger in other areas and it is difficult to attract people here from other areas because of the cost of housing, etc. However, our state economy, growth in population, weather and favorable tax climate provide us with opportunities.

Justin Stone: All of the cities noted are extremely growth-oriented for accounting firms, either as a result of new business or growth as a result of the current regulatory environment. South Florida has benefited from growth in all sectors of industry, including public companies, private organizations and governmental agencies.

What challenges, if any, do South Florida accounting firms face in 2015?

Argiz: The limited availability of accountants has made staff retention one of the highest priorities, and challenges, for 2015. Having the right staff, and enough staff to service your clients properly, is the key to growing a business, and we work very hard to maintain the talented team we have at MBAF.

Balter: Talent acquisition remains a key challenge for accounting firms nationwide, but this is especially true in South Florida, where the economy is strong and growing. The influx of foreign investors to South Florida is also accelerating the demand for international accounting services in South Florida.

Berkowitz: Recruiting is an ongoing challenge. Clients are extremely sophisticated and solving their problems requires critical thinking. We look everywhere for talent. Fortunately, our location in South Florida attracts people from other markets, and we’ve had success in finding people who are part of our global affiliations.

Heckaman: Fee pressure in the traditional service lines of audit, accounting and tax, along with rising staff labor costs in a tight labor market put considerable pressure on the profitability of firms in South Florida and other areas of the country.

Spritzer: While we may have challenges such as the extreme difficulty to attract top candidates for senior and supervisory positions, we also have opportunities. As the third most populous state, larger companies are relocating their headquarters to our community. The competition for key talent is critical. We have to think outside the box and provide alternative work/life balance. Today’s workplace is faced with the challenges of managing a multigenerational workforce. There are four distinct generations represented in today’s workforce – from Traditionalists, also called the Silent generation, the workers who were born between 1925 and 1945, to millennials, born 1981 and later. Workers from each generation have their particular tangible and intangible needs. Supervisors and managers who provide feedback to their employees must understand what their employees expect from a supervisor at every stage in life. Traditionalists’ needs and work styles differ significantly from the work style of employees from the millennial generation.

Stone: As a result of the regulatory environment and a strong surge of new business, there continues to be a need for highly qualified accountants that doesn’t seem to be slowing down anytime soon. I believe all South Florida accounting firms will continue to struggle finding strong candidates to keep up with the growth South Florida is experiencing.

How have accounting firms in South Florida changed over the last 25 years?

Argiz: A big change has been in the technology we use today compared to 25 years ago. We’re able to do most, if not all, of our work online, and using new software and tools to be more efficient. There are also many more big firms in South Florida than there were in 1990, and it’s due to the overall steady growth of the economy. MBAF, for example, had approximately $4.2 million in revenue in 1990, and now we’re at more than $85 million. It used to be almost all tax and audit work 25 years ago, and now you see firms with business valuation groups, mergers and acquisitions specialists, litigation support teams, IT consulting practices and more. In terms of audit and tax work, that sector itself has become more complex due to the changes in tax laws that clients need to abide by.

Balter: The biggest change has been the impact of technology in how we service our clients. Everyone at Marcum has a laptop and, of course, a cellphone, which has certainly made accounting services more efficient and more effective, and enables us to be in contact with our clients and our employees as needed. South Florida also has a tremendous concentration of closely held and family-owned businesses, which evolved from the southward migration of families two or three generations ago. The climate and the tax-friendly environment kept those families here, and the children and grandchildren of the original business owners have expanded those family businesses and started new ones. Firms that are equipped to contribute to the growth and success of entrepreneurial clients will continue to thrive in South Florida.

Berkowitz: Technology has created efficiency and security issues that did not exist in the past. It enables us to offer alternative work arrangements to firm members, to work efficiently from clients’ offices and to be more responsive. Twenty-five years ago, CPAs provided information to clients; now we must convey knowledge. It also keeps us on call at all hours of the day and night, which can lead to challenges in managing work/life balance.

Heckaman: The accounting industry has transformed dramatically in the last 25 years. The structure of the professional service organizations and the leverage model has changed, with firms becoming flatter, which creates more opportunity for professionals at all levels to help shape the future of the business.

Spritzer: The number of midsize and smaller firms has decreased because of mergers and the retirement of older partners. The amount of specialization has increased, making it difficult for midsize and smaller firms to compete with the larger firms with access to greater expertise. The cost of technology has also increased the cost of doing business, driving out the smaller firms.

Stone: The accounting profession has undoubtedly changed over the last 25 years. Demand by the profession for greater transparency continues to grow. Today’s business environment is technology-focused, and the accounting profession must respond quickly and efficiently to clients among an increasingly complicated set of accounting, auditing and tax requirements.

How can an accountant be most useful to a client in South Florida today?

Argiz: Accountants are most useful to clients when they are also consultants. We meet with our clients, listen to their concerns, and work with them to develop and implement strategies to overcome these issues. It’s our job to provide clients with smart ideas that help their businesses succeed by thinking on our feet and quickly finding solutions.

Balter: Marcum professionals combine practical knowledge with years of experience to provide a level of understanding and service that is unique among professional service firms. [We take] a team approach to every engagement, ensuring the highest degree of technical knowledge, experience and understanding of current issues and regulatory matters.

Berkowitz: Accountants must understand their clients’ industry, business and business issues. Our clients are looking for sophisticated advice, creative problem-solving and strategies to solve their tax and financial problems, and help with accomplishing their business and wealth goals.

Heckaman: Providing actionable insight and offering solutions to clients, which helps them grow, is a critical role for accountants today. Staying ahead of regulatory change and market trends that might affect South Florida’s business community is key to protecting client interests.

Spritzer: As always, the role of the accountant as a financial advisor remains the most important attribute that we can bring to the table. Almost as important is keeping the client aware of changes in the tax law. Our business is relationship-driven. We need to be abreast of changes, but adding value to clients’ business and non-business life is essential to our success. As our clients mature, we must be equipped and versed in assisting in the succession strategies.

Stone: An accountant would be most useful if they bring value to a South Florida client each and every day. Value is your distinguishing feature, whether it be value from a high-quality audit with industry experts, a tax-planning strategy or even recommending a technology solution. Value is delivering a professional experience to your clients and prospects all the time, not just when you are trying to win the work.

What’s your outlook for South Florida accounting firms in 2015?

Argiz: I believe 2015 is going to be a very positive year for South Florida accounting firms. As the economy continues to get better, we’ll see an increase in the need for more accounting work, and overall more growth in the industry.

Balter: Given South Florida’s strong economy, proliferation of entrepreneurial companies and expanding role as a gateway for international investors, I anticipate a significant focus on growth for the region’s accounting firms.

Berkowitz: We expect to see continued expansion of international work. Companies are growing into the U.S. and expanding globally. Knowledge of the interplay between tax laws in different countries is critical. Pre-immigration planning is another important area for 2015. As countries experience political and economic challenges, individuals and families are looking for ways to secure their finances before they relocate to the U.S. IT consulting and risk consulting are growth areas and, as companies feel the economic recovery, they are looking at internal processes and assessing risk proactively. We expect to see a lot of growth in this practice area.

Heckaman: My overall outlook for the accounting industry in South Florida for 2015 is positive. The economy continues to improve, which means clients are more confident and are experiencing success. This leads to more opportunities for accounting firms to bring value to their clients.

Sprtizer: I see continued pressure on firms as the tax law becomes increasingly complex and the shortage of qualified staff continues. [We’re] bullish on South Florida and the opportunities in front of us. One only has to take a look at the number of cranes in downtown Miami to see the growth curve.

Stone: The continued growth of South Florida accounting firms will be a function of each firm’s ability to hire the qualified candidates necessary to support the demand in public accounting.

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Blain Heckaman, CPA, is the managing principal of the Kaufman Rossin Group. Kaufman Rossin is one of the top CPA Firms in the U.S. Blain can be reached at bheckaman@kaufmanrossin.com.