CPA Practices

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 52,700 CPA practices in the US provide accounting, tax preparation, and auditing services to businesses, non-profit organizations, and individuals. Tax preparation and tax planning work for organizations and individuals comprise about one-third of overall CPA client fees, but are typically over half of client fees for smaller firms. Tax work is about evenly split between individuals and organizations. An additional 36,500 solo accountants operate with no employees and generate $2 billion in annual revenue. CPAs are licensed by their State Board of Accountancy.

Client Retention

When the economy improves, CPA firms focus on attracting new clients.

Changing Tax Laws and Accounting Standards

Keeping up with changes in complex tax laws and accounting rules is a major challenge for CPA practices, particularly smaller ones.

Industry size & Structure

The average CPA practice has $2 million in annual revenue and 9 employees.

    • Any accountant filing a report with the SEC is required to be a Certified Public Accountant (CPA).
    • There are about 52,700 CPA firms in the US operating about 56,100 locations and generating about $113 billion in annual revenue.
    • About 85% of firms have less than 10 employees.
    • An additional 36,500 establishments are owner-operated with no employees. These solo accountants generate $2 billion in annual revenue.
    • CPAs are licensed by their State Board of Accountancy. All States require passage of the Uniform CPA Examination prepared by the American Institute of Certified Public Accountants (AICPA) for licensing. Less than half of candidates pass all four parts of the exam on their first try.
    • Nearly all States require CPAs to complete a specific number of continuing education hours before their license can be renewed.
                            Industry Forecast
                            CPA Practices Industry Growth
                            Source: Vertical IQ and Inforum

                            Coronavirus Update

                            Apr 29, 2022 - Pandemic Drives Adoption Of Cloud-based Technology
                            • Almost two-thirds of accounting firms plan to adopt some form of cloud technology in the next two years, according to a survey by software provider CaseWare International. One-third of the firms are accelerating implementation within the next 12 months. Respondents cite the rise in remote working spurred by the pandemic as a key driver.
                            • A severe talent shortage caused by the “Great Resignation” will be the most important issue affecting accounting work in 2022, according to some industry experts. A loss of institutional knowledge will cause problems not only at the firms accountants are auditing but within the accounting firms themselves. Given how widespread this phenomenon is across different sectors, it’s a problem that can’t necessarily be solved with higher salaries and bonuses.
                            • Interest in accounting certification programs is on the rise. The Institute of Management Accountants (IMA) reported a 17% year-over-year global growth of the Certified Management Accountant (CMA) program. Experts cite increased free time during pandemic-related lockdowns as a key driver of growing interest. Greater availability of online training programs during the pandemic is also cited as a contributing factor.
                            • Commercial bankruptcy filings increased 26.4% month over month in March, according to Epiq Bankruptcy Solutions. For the first quarter of 2022, total commercial bankruptcy filings were down 25% compared to the same period in 2021. “March is typically the month with the largest number of new bankruptcy filings on an annual basis,” says Chris Kruse, senior vice president at Epiq. “We continue to watch closely the bankruptcy activity as we emerge from the global pandemic and expect a return to a more active market in the months to come.”
                            • CPA practices and their clients continue to see automation as a key to revenue growth. Time-series surveys conducted during the pandemic by several organizations show that automation, particularly in areas like accounts payable and accounts receivable, was driving business growth before the pandemic set in and has continued to provide consistent momentum as 2020 progressed, according to CPA Practice Advisor. Companies that embrace automation expect future growth even in the face of the pandemic, while those that don't aren't as optimistic. The surveys also showed a direct correlation between the adoption of technology and the ability to switch to value pricing that helped grow firm revenues during the pandemic.
                            Get A Demo

                            Vertical IQ’s Industry Intelligence Platform

                            See for yourself why nearly 40,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                            Build valuable, lasting relationships by having smarter conversations -
                            check out Vertical IQ today.

                            Request A Demo