Praxity Regional Review – North America

Our series of regional reviews turns to North America. With huge changes both politically and in legislation, how do these economic giants respond? Blain Heckaman, CEO of Kaufman Rossin in the USA talks us through what he sees as the region’s key developments.

The Industry

Private equity acquisitions

Mergers and acquisitions driven by private equity (PE) have become more prevalent in public accounting and this trend is set to continue. PE firms have the cash and are attracted to CPA firms’ stable, recurring revenues and potential for growth and innovation. One-third of the top 30 U.S. accounting firms are owned or partially owned by private equity firms, according to recent reports. This consolidation will change the competitive landscape for firms like Kaufman Rossin who plan to remain independent.

Evolving business model

One of the biggest hurdles for our industry over the next five years will be figuring out how AI and other technology will change the business model – including the billing model. Largely, the market dictates pricing for CPA and advisory services.  Technology costs are skyrocketing, and we must recoup these costs as we find more ways to add value for clients, such as advisory services connected to our traditional compliance service offerings.  A big shift in the industry will be billing for value delivered, not for time spent.

Hybrid and remote work

The continued evolution of the hybrid work model is still a hot topic. Hybrid is here to stay, but it will evolve, with fully remote positions likely becoming less prevalent. Some professionals thrive in a hybrid environment, successfully navigating work-life integration while maintaining or increasing productivity, while others perform much better in an office setting. It’s not a one-size-fits-all solution.

U.S. election

The results of the recent U.S. Presidential and Congressional elections could have significant implications for U.S. businesses, from the economy, potential tax law changes, and regulatory rulemaking. The Republican party now controls the Executive branch, Senate, and House of Representatives. Business leaders and their advisors should keep an eye on the political arena and stay up to date on these developments.

The Firm

Kaufman Rossin growth

Kaufman Rossin is well positioned for future organic growth. The firm is well capitalized, has an organic and entrepreneurial mindset, and is making the investments necessary to prepare our operations for the future.

We have continued to expand our advisory services and have seen tremendous success in areas such as risk advisory, forensic, advisory and valuation services and business consulting.   We have diversified our tax offerings with specialized expertise, including energy credits and incentives, transfer pricing, and tax controversy and IRS resolution services. Our wealth management and insurance entities are seeing steady growth, and our fund administration business growth has been robust.

Technology-driven services

Looking ahead, we see significant opportunity in technology-driven service offerings.

With cybercriminals getting more sophisticated in their attacks and data privacy regulations increasing, there’s a high demand for cybersecurity, data privacy, digital forensics, and incident response services, and we’ve expanded our team to meet this need.

Artificial intelligence (AI) and robotic process automation (RPA) are changing the game for the firm and for our clients. Our consulting practice is helping clients leverage business intelligence for better decision-making and implement other aspects of digital transformation to drive growth and streamline operations. Our risk advisory practice has developed proprietary software solutions, collectively known as the Risk Intelligence Suite by Kaufman Rossin, to help financial institutions meet regulatory obligations.

Operational efficiencies

On the operations side, our firm is finding efficiencies through AI and RPA, improving processes, and enabling our people to work smarter.

We’ve also recognized the importance of maintaining a strong presence in India, both for operational efficiencies and for serving clients. In late 2022, when recruiting was challenging in the U.S., we looked to India and found excellent talent there. Having a workforce spread across different time zones also enabled us to better serve our clients. Since then, the market and the strategy have shifted. We’re no longer there just for capacity – we’re there for business reasons. The cost savings and time differential provide an important competitive advantage.

Learning and development

In this evolving business landscape, employing extraordinary talent and creating a learning and development environment is critical to the success of any firm.  The firm with the best talent will carry the day. Upskilling your people as AI changes the landscape will be a key to every business.  Advances in technology will make basic “data entry” more of a tech function than a people function. We need to make sure our people understand how to bring value – and joy – to their clients through proactive advisory services.

Read the full article at Praxity.