Four Trends CPAs Need to Know

Obama policies will affect your clients’ business — and their business needs. Are you ready?

January 11, 2010
by Michael Ramos, CPA

The Chinese have a curse for people they don’t like: “May you live in interesting times.” Upheaval, uncertainty and fear characterize interesting times. You wouldn’t want to live in interesting times.

Or would you?

Interesting times offer unique opportunities. Bobby Kennedy — noting the social unrest of his age — declared in a 1966 speech in South Africa:

“Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind.”

Today, our great challenges are economic. Stability, when it returns, will usher in a brave new world.

Interesting times indeed. However, CPA firms willing to embrace change can view this “curse” as a blessing. It means developing a plan to offer clients the services they’ll need to confront the new economic world.

Those services will flow from huge public policy changes underway in Washington, D.C.

The U.S. government is taking a once-in-a-generation action in response to a once-in-a generation recession. It’s redirecting hundreds of billions of dollars toward middle-class tax relief, education, energy, healthcare and the revival of the nation’s banking system.

What’s a CPA firm to do? Follow the money. It leads to new business.

The government’s stimulus package totals $787 billion. About 40 percent is earmarked for tax relief, including nearly $200 billion for business tax breaks. Your firm’s expertise on tax matters will be invaluable to clients trying to understand these changes.

The remaining 60 percent of stimulus money is for government spending, including about $350 billion of direct spending to position the economy for future growth. Most CPA firms will focus on the tax changes. Yet the stimulus plan’s spending elements are larger.

The Obama administration’s policies are moving the economy in a new direction. This will affect your clients’ business — and their business needs. Your opportunity is to provide a service to address those changing needs.

Four promising areas to consider:

  1. Tax planning and compliance: The American Recovery and Reinvestment Act (ARRA) — dubbed the stimulus package — brought major changes to the tax code. So does the Obama administration’s budget. The tax code overhaul offers significant opportunities in tax planning and compliance.
  2. Services for state and local governments: Firms skilled in audits of state and local governments and the requirements of OMB Circular A-133 are well positioned to expand their practice. The ARRA’s reporting requirements go far beyond existing rules for those receiving federal funds. ARRA fund recipients have many questions.
  3. Services for nonprofit organizations: Many nonprofits are receiving ARRA funding. They face the same issues facing state and local government receiving ARRA funds. Moreover, many nonprofits will face another challenge: preparing for their first A-133 audit.
  4. Renewable energy: Keep your eye on wind, solar and other renewable energy sources. The Obama administration has signaled it will make significant investments in the rapidly growing renewable energy sector.

In these historic times, CPA firms that decline to change their pre-2007 business model risk being overtaken by competitors.

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Michael Ramos, CPA, works with CPA firms to create and implement business development, communication, and marketing strategies. He is the author of many books, most recently Winning the New Ballgame: Planning for Growth in a Post-Recession Economy.