Gen Z is rewriting your partner track

America’s accounting talent is in demand, and we’re here to help you grow with tips on developing younger staff members and alternative partnership pathways that will make Gen Z want to stick around. Plus, we’re sharing a balanced way to incorporate wealth advisory services that doesn’t involve forming your own subsidiary.

But first, an external advisory committee has some ideas to improve the IRS; read the recommendations they sent to Congress. First on the list? More money (and hopefully fewer problems).

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Instead of focusing solely on growing revenue in your firm, consider placing equal importance on boosting your multiple. Kyle Walters, a partner at L&H CPAs and Advisors, argues that the best way to do this is by adding internal financial advisory services, which can be done in one of three ways. 

The most intensive option is to build an internal wealth practice as a subsidiary within your own firm, while the most hands-off approach involves creating a referral relationship with an external wealth firm. But a third (and often overlooked) option offers a balance between the first two: a joint venture with a mutual ownership structure. 

Why this matters: Many firm owners focus on top-line growth, but long-term firm value is often driven by the services you offer. Adding financial advisory capabilities can create new revenue streams while potentially increasing your firm’s valuation multiple. (Accounting Today)

The traditional 15-year partner track is unappealing to younger accountants entering the industry. Taking a fresh approach to in-firm progression can be the difference in retaining top talent as you grow your firm. What does this look like in practice?

One option is to swap up-front debt for a phased earn-in or corporate profit-sharing model. Another way to fast-track a senior CPA’s book of business is to place them in a leadership incubator that trains them on skills like commercial negotiation. You can also reduce the timeline as low as seven years by tying progression to new metrics, like advisory niches and complex portfolios, rather than time served.

Why this matters: As you grow your firm, reconsider your current partner track. Is it optimized to retain high performers? If not, start having conversations about what would make ownership appealing to your senior employees. (Accountancy Age)

Number of customers paying slower than six months ago (BillTrust)

Here’s a red flag to watch for as you continue to scale–firms across the globe are facing talent shortages, with 73% saying the issue is having a severe impact on them. While U.S. accounting degrees are beginning to tick upwards, a large portion of firms say that the talent shortage is still worse than it was three years ago, and it’s impacting the ability to grow.

Sound familiar? If you haven’t already, consider two coping strategies found in the Advancetrack Accounting Talent Index. The first is recruiting more junior-level employees to develop internally. The other is to outsource or offshore some of your firm’s tasks. And if you’re hesitant, it may be helpful to know that respondents on this path noted a positive impact. 

Why this matters: Every engagement you decline because of staffing constraints is a lost opportunity for growth. Firms that proactively address talent shortage issues will be able to successfully scale even when experienced accounting staff remains hard to find. (Advancetrack)

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The Net Gains is written and curated by Lauren Ward and edited by Bianca Prieto.