Kentucky CPA firms expect growth of around 8 percent this year for accounting services. They’re hiring and some have a little trouble finding enough qualified candidates. Pent up business activity is sparking investment and mergers. Technology is allowing some business to completely outsource its accounting functions to firms. Only the healthcare sector is expecting less growth as consumers who are taking on more of the payment burden cut back on medical spending.
Comments from some of Kentucky’s accounting services leaders
“I think 2014 will be a good year for accounting firms. Most firms I have spoken to are expecting 8 to 10 percent growth. There is a lot of pent up demand by businesses that will need help from the accounting community. New regulations and complexity will be fueling a lot of this. A strong indication of this demand is that firms are hiring and expanding their staff at a rate not seen since before the recession. Firms are having trouble finding enough experienced staff. The pipeline for new staff seems to be at a proper level. One area generating a lot of growth is businesses outsourcing of the entire accounting function, and firms of all sizes are capitalizing on this trend. The availability of “cloud” software is making this much easier and efficient to do. 2014 should be a great year for accounting firms. The economy in general will have some slow growth but not to the extent the accounting segment will see.”
Alan Long, Managing Partner
Baldwin CPAs
“I have a positive opinion about 2014. There will be continued moderate improvement in the economy as we work our way out of the recession. Employment will improve slightly and our housing market will continue to improve at a moderate pace. Although the stock market is up considerably the last two years, I believe there is going to be a positive market for 2014 – just not quite as good as 2013. I expect the interest rate to rise during 2014 but only slightly. The inflation rates may increase slightly. As for the accounting profession, there will be continued consolidation of firms. The complexity and need for resources will drive firms to merge to offer more sophisticated services to clients. I expect no significant tax reform this year, although there may be increases in specific areas to pay for programs that will come back online in Washington. Auditors are becoming more international in their scope as we move closer to international audit standards. Accounting should continue to be a growth area with plenty of opportunity for young graduates.”
Michael Mountjoy,
Mountjoy Chilton Medley
“Kentucky’s best economic opportunities may be found beyond our shores. We are now the second largest exporting state in the United States. International investment in Kentucky will play an important part in Kentucky’s economic growth; the recent sale of the Jim Beam brand is a prime example of the kind of investments on the horizon. Kentucky, like all states, will be facing a talent shortage as Baby Boomers begin to retire. We need to open our arms to international professionals if we are going to meet the needs of Kentucky companies doing business internationally.”
Penny Gold, CEO
Kentucky Society of CPAs
“While the accounting profession is growing moderately, that growth relies on the national economic market, which is still somewhat inconsistent. Crowe’s growth has come from our focus on becoming a national firm, branded globally, which means we continue to diversify into new areas, expand nationally and bring national resources into our local markets. What we’re seeing in the Kentucky market is increasing activity as businesses focus on investing and expanding either organically or through acquisition. Our clients continue to have skepticism about how the government will impact their business either from a tax or regulatory perspective, which adds uncertainty in their longer-term planning.”
Steve Jennings, Local Office Managing Partner, Lexington
Crowe Horwath LLP
“Our largest industry niche is healthcare. Our outlook for 2014 for this segment is not optimistic, with continued pressure to lower operating costs and manage regulatory changes and payment reductions. Although Kentucky adopted expansion of Medicaid coverage and developed an insurance exchange to expand coverage to the uninsured, enrollment has not met the levels expected by the healthcare industry. In addition, the movement to high-deductible insurance products has had the effect of consumers avoiding treatment or diagnosis. Our non-healthcare clients continue to struggle with how to manage their response to the insurance mandate and the effect on their operating costs.”
C. Michael Stigler, CPA, Director-in-Charge, Kentucky market
Blue & Co., LLC
“We expect 2014 to be a year of increased optimism as the economy continues to improve. Continued low interest rates and low inflation combined with the housing market showing record post-recession improvements and the stock market setting all-time highs with largest annual gains since the late 1990s are setting a tone of increased confidence. These factors will have a huge influence on decisions business owners make in 2014. We are seeing this in our client base as clients are taking more risks and pursuing projects to grow and expand business. While there are many positive factors, there are also the continued uncertainties of potential tax reform, debt ceilings, Obamacare and the ongoing gridlock in the federal government. These dynamics of our current economy present optimum opportunities for CPAs in public accounting to advise and assist our clients, and we predict significant increases in demand for our expertise in 2014.”
Jennifer R. Hughes, President
Deming, Malone, Livesay & Ostroff, PSC
“Our industry thrives on changes in the business and regulatory climate. In 2014 we see opportunities to advise clients in dealing with changes in the healthcare economy and the demand for succession/exit planning services. This in addition to pending Kentucky and federal tax reform are added opportunities for our services. As the Affordable Care Act has spurred consolidation in healthcare, we are tasked with advising providers with declining reimbursement, increasing operating costs and in mergers and acquisitions. As baby boomer business owners approach retirement, the demand for valuation and succession planning services will create more opportunities for our services.”
Christopher E. Anderson, President & Shareholder
Barr, Anderson & Roberts, PSC
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