The US accounting profession is really going through a major shift. Although with the large CPA firms still getting maximum attention, the small CPA firms are gradually and quietly growing even more rapidly. Nationwide, SMEs, new ventures, and family-run firms are gradually venturing into the small CPA firms instead of big national or international firms.
This is not a random move. It mirrors new changes in client preferences, technology use, service delivery modes, and the CPA's changing role. To find out how the shift is happening, it is necessary to know first what a CPA firm is and what its role has been over time.
In this blog, we will try to explain the reasons behind why small CPA firms scale faster than the big firms, and what qualities the small firms need to be considered the best CPA firms for small business, while also including how their business model is more compatible with today's clients' needs.
What Is a CPA Firm in the USA?
In order to get a clear picture of the growth process, it is necessary to respond to a basic inquiry first: what exactly is a CPA firm? A CPA firm is an organization of professional services that delivers accounting, auditing, tax, and consultancy services through Certified Public Accountants (CPAs). These firms work with individuals, corporations, non-profits, and governmental bodies to provide financial accuracy, compliance with rules and regulations, and the best advice in finance.
In the past, accounting firms dealing with CPAs mainly provided services linked with compliance such as tax return preparation, auditing, and bookkeeping. Nevertheless, contemporary CPA firms—particularly those serving small businesses—have broadened their scope of practice to include financial planning, consultancy for businesses, management of cash flow, and strategic consulting.
On the one hand, large CPA firms mostly deal with international corporations and public companies. On the other hand, small CPA firms generally cater to small and mid-sized businesses, entrepreneurs, and local institutions.
READ MORE: Best CPA Accounting Firms in the USA
The Changing Needs of Small Businesses in the USA
Small businesses have been the backbone of the US economy and their requirements have changed significantly throughout the decade. The current business owners are after full-time guidance, real-time insights, and personalized support, not just an annual tax filing service.
Large companies usually have strict procedures, pre-defined service bundles, and several levels of approval for their operations. Although this organizational model is suitable for big companies, it often cannot cope with the changing demands of small businesses.
Conversely, a CPA firm specializing in small businesses is designed with flexibility, accessibility, and personalization in mind. This correspondence to the expectations of the modern client is among the main factors why small firms are outpacing the growth of their larger competitors.
Reasons Why Small CPA Firms Are Growing Faster Than Large CPA Firms
Here are some reasons why small CPA firms are growing faster than large CPA firms:
Personalized Client Relationships Drive Faster Growth
The development of strong, personal relationships with clients is one of the greatest benefits of small CPA firms. In the smaller firms, the clients usually get to work with the CPA seniors or even the firm’s owners directly instead of being transferred from one department to another or to a junior staff member.
The direct contact between the client and the CPA creates an atmosphere of trust and a deeper comprehension of the client's business. The small CPA firms are well acquainted with the goals, problems, and specific features of each client's industry. Thus, they can give personalized advice instead of one-size-fits-all solutions.
For small businesses, the personalized service is a priceless asset. This is one of the main reasons why a lot of people tend to think that small firms are the best CPA firms for small businesses.
Agility and Faster Decision-Making
Big CPA firms generally have very complicated organizational combos. Major options in such aspects as pricing, services, tech, and client relations may get a long approval procedure, which leads to an eventual loss of innovation and responsiveness.
On the other hand, small CPA firms are much quicker. The firm owner can directly and timely change according to the new laws, the clients’ demands, and the market trends, avoiding the slow-forward bureaucratic processes. This flexibility, not being a trait of larger firms, permits them to offer new services, modify workflows, and adopt emerging technologies quicker than the giants.
In a rapidly changing business environment, speed and adaptability are the rarest powerful growth drivers.
Technology Levels the Playing Field
Previously, big CPA firms were the winners without a doubt because of their access to cutting-edge technology and resources. Now, cloud computing, automation, and secure collaboration tools have been a great equalizer for all the players involved.
Even the smaller CPA practices have the same technology as the largest CPA firms in the US with no significant investment in infrastructure. Cloud accounting, AI-powered reconciliation tools, and client portals help small firms to be productive and offer top-quality service at the same time.
The managers of small firms have the same tools as their big counterparts to increase the number of clients, compete, and thus take over a part of the market.
Cost-Effective Services Attract Small Businesses
Cost is one of the most important criteria for small businesses when selecting a CPA firm. Larger firms usually charge more because of their overhead, reputation, and service models designed for big enterprises.
The CPA firms serving small businesses usually provide more flexible pricing arrangements which are customized according to the financial situation of the entrepreneurs and the companies with the potential to grow. The combination of this affordability and top-notch service makes small firms very appealing to clients who are conscious of their costs.
As the number of startups and small businesses in the market increases, small CPA firms are the firms to gain more clients who consider cost-saving as the most important factor but still want to receive the same amount of expertise.
Focus on Advisory Over Compliance
The automation process is the main reason why compliance services like tax filing and bookkeeping are gradually becoming commodities. The large firms’ dependence on compliance revenue is still great, but small CPA firms are changing their focus toward advisory services.
Advisory services comprise cash flow management, business planning, tax strategy, financial forecasting, and growth consulting. These services not only bring more value to the clients but also result in more robust long-term relationships.
Small CPA firms, by treating themselves as strategic partners rather than compliance vendors, differentiate themselves from the competition and thus create a path for sustainable growth.
Reduced Internal Complexity
Big CPA firms have very complicated internal operations, which consist of various departments, locations, and service lines. Such complexity can result in loss of concentration and delayed actions.
Small CPA firms have a simplified structure and operate with fewer staff. This smooth operation helps them to put in more hours and resources for the client service side rather than the administration side of the company.
Less complicated operations mean quicker turnaround times, effortless communication, and client satisfaction, which are all factors that promote growth.
How Small Firms Compare to the Top CPA Firms in the US
The biggest CPA firms in the United States are still the firms mostly to be found in the area of large audits, tax planning for multinationals, and even public company consultations. Nonetheless, their size can often be a drawback when it comes to dealing with small and growing companies.
On the other hand, small CPA firms have the upper hand on large firms in the areas of personalized service, flexibility, affordability, and close client relationships, where the latter are likely to fail. The mentioned perks are the reason why they are the favored option for the likes of entrepreneurs and small company owners.
Instead of a direct competition, small firms are winning by investing in their unique value proposition. The phenomenal development of small CPA firms signifies a pivot in the client’s demand as well as the entire accounting industry. As a matter of fact, the small firms have come to the rescue and are rendering very high-quality services through various methods such as technology, close connections with customers, expertise in certain areas, and flexible pricing structures.
Helpful Links
- CPA Accounting Services for E-commerce Small Businesses
- Best CPA Firms for Tax Filing and Financial Reporting in the USA
- Why Choose The Fino Partners for CPA Accounting in the USA?
In fact, the small CPA firms are better than larger firms in most of the areas where the competition has been growing. The best US CPA firms will always have a significant impact on the economy, but small CPA firms are very rapidly becoming the best CPA firms for small businesses.
This trend is not going to disappear. Instead, it is a process of change that is affecting the entire accounting profession's future. Plan to efficiently scale your CPA firm and remain ahead of the competition? Contact The Fino Partners today to find out how our personalized accounting and outsourcing solutions can facilitate your firm’s growth and ensure its long-term success.
