Writer: Joshua Andino
2 min read June 2023 — The last three years have seen a number of regulatory and legislative changes at both the federal and state level. These changes keep Tampa’s professional services firms busy both internally and as they manage their client work.
There have been a number of changes that have kept the regions’ professional services firms busy. Locally, Tampa Bay’s population growth, even in areas that were once considered to be more toward the periphery of the region such as northern Pasco County or the Sarasota/Manatee area, are seeing robust growth. As the region matures, new businesses are reaching out to accounting and assurance firms to ensure they can maximize that growth to their benefit. With the number of changes underway – from the federal tax changes brought about by the last two years of the Biden administration to more local insurance reform, Invest: spoke to some of the region’s professional service providers to see what’s keeping them busy.
What are your thoughts on the current state of the accounting industry?
Daniel Dowell, Office Managing Partner, Marcum LLP: The accounting industry is a bit challenged right now much like most industries. We’re struggling with staffing requirements. So, our ability to find experienced hires has been challenged over the last couple of years. We think we see a little bit of a loosening right now for the first time. Also, enrollment in accounting schools has decreased. The business leaders in the area are trying to figure out what could be some of the root causes but also what could be some solutions to that. When we look at the industry, I’d say people would be our number one challenge here in Tampa Bay. One of the great things that have happened over the last several years is we’ve seen extensive growth. From a new business perspective, I would venture to guess that most firms in the accounting industry have had good years building their top line. Having enough qualified people to be able to perform the services will continue to be the biggest challenge.
Wade Sansbury, Partner in Charge – Bradenton/Sarasota, Mauldin & Jenkins: It has been challenging because even though we are not buying and selling goods, the same inflationary pressures have affected us just like anyone else. Our number one cost is wages and the demand for talent has increased in the industry causing those costs to increase. Those compensation benefits are necessary to retain our employees as well as to continue to attract good people. Like other service businesses, these costs combined with other increases in areas like technology need to be passed along to the clients as well, otherwise, we would no longer be able to stay in business. It’s something that I feel the firm as a whole has done well to manage. All the clients that we have those conversations with understand where we’re coming from. Some can help us more so than others and we’re willing to work with them in that regard. Some firms are severing client relationships to serve the larger, more significant entities only. They don’t seem to want the smaller business or individual clients anymore. Some of our growth is picking up those clients that a lot of other firms have thrown to the wayside.
What are your thoughts on Tampa Bay’s economic growth?
Dowell: When you’re looking at all of the different types of companies that have moved into the Bay Area over the last few years, we cover a lot of different sectors and a lot of different sizes of entities that have moved in. Most companies have some form of leverage in place. Leverage is borrowing typically with a financial institution or perhaps a private equity company. Those types of financing vehicles typically require professional accounting services. Our part of this process is to be able to continue to provide high-quality services and be able to be responsive, get things done on time and produce information that the financial community can rely on.
Sansbury: If the area is growing, we should be growing too. If there are new businesses here, we want to be getting that new work. We are trying to do our best to acquire some of that growth which means we are constantly expanding our personnel, our abilities and resources. That’s a challenge in and of itself because there are fewer accounting graduates coming out of college for us to tap into. There’s certainly a wider range of opportunities for people because they no longer have to live where they work. It’s a challenge to make sure that those good, talented people want to work and live here, near our offices, where that growth is. As a regional firm, we are able to get support when needed from our other locations. With that being said, the Bradenton/Sarasota area is a great place to live, work and play.
What’s the impact of today’s high inflation, high interest rate environment?
Dowell: Everybody is in the same boat, so to speak because all of our costs are going up at the same time. We benefited from the historical lows in interest rates, and you could say that they were held down artificially for an extended period. So, when you see the rates that we’ve moved to now over a 40-year period, they’re more in the normal range at this point. However, for anybody that had a mortgage at 3% and is moving into a mortgage now at 6%, there’s an increase in the cost associated with it and does impact property values, house values, and so forth. The rise in interest rates probably has a little deeper impact on the corporate environment because of the debt that they hold at times.
Sansbury: There are a lot of things that we can control and there are a lot of things that we cannot control. Inflation right now is, sadly, something that we really have no control over. The high inflation and interest rate environment is concerning, although it will come to an end at some point. We monitor inflation and how it impacts our markets, various costs, our employees and our clients. Inflation combined with the demand for talent have contributed to wage increases for our firm. We control the costs that we can and achieve operational efficiencies so that what we pass along to our clients is reasonable. The Bradenton / Sarasota area has been very resilient to the rising costs because it’s so diverse and the people and businesses are strong.
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