How to Tough Out the Credit Crisis
CPAs share experiences, strategies on surviving the downturn. Join the survey; get more answers.
August 3, 2009
CPAs are grappling with the nation’s credit crisis with innovation, discipline and, mostly, a stiff upper lip. But no one ever said it was going to be easy.
One mid-level financial manager at a large company tells me things may be looking up, if only because companies like his are ratcheting down costs, sometimes painfully.
“Companies are doing better,” he says, “by restricting compensation and adopting industry practices towards base pay and bonuses.” Still, many companies remain top-heavy with management positions. “My company,” he says, “has announced great recent contracts but is wary about the global economy.”
What are CPAs doing about the credit crisis?
From a CPA in public accounting at a local firm, I’m hearing: “Our clients will be suffering a little bit longer. “ Around her own dinner table, this accountant says, “Family-wise we are adjusting to no pay increases but more expenses.” Her best advice: “Work hard … spend and invest wisely.”
But another CPA, this one the owner of his own small firm, seems to sum up a lot of what I’ve been hearing throughout the professional lately. “Despite all the unstable aspects of the economy,” he says, “I seem to sense a positive swing in the upcoming year.” His best advice: “Be proactive.”
Indeed, a survey of AICPA Insider readers may be showing some signs of — if not outright optimism, then at least less gloom. In July, readers gave the national economic outlook a median score of 3.25 on a one-to-five scale with one being “much worse” and five being “much better.” July’s 3.25 rating represented a fractional gain from 3.14 in June and 3.08 in May. The CPA Trendlines survey by Bay Street Group LLC for the AICPA appears to be tracking closely with other AICPA surveys of PCPS firm members and CPAs in business and industry.
“People are starting to buy and sell things again,” said one hopeful sole practitioner based in (appropriately enough) Bountiful, Utah. “We can't stay down forever. We are going to cope and move on. People still have to live. We are all working to make things better. It is starting to show.”
“I am by nature an optimistic person,” says the head of a local firm in Atlanta. She believes “we have seen the worst of the economy. It will be a slow haul upward, but we are starting to see positive signs: less layoffs, more discretionary spending, more companies investing in their development and people.”
She says there have been no layoffs at her firm. Her advice: This is a time to build the firm, invest in staff training and new software and get well positioned for the economic recovery.
“We believe that will put us ahead of the curve and be able to handle increased business as it comes in,” she says. “Massive cost-cutting is shortsighted and can come back to haunt companies by being short-staffed, unable to meet demand and having to train new people.”
She’s right, of course. Building for the long-term is always better than being short-sighted. The question is: How long is the long term for most people?
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Copyright © 2009 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.
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