Kevin Algee, Managing Shareholder, Ennis, Pellum & Associates CPAs
In an interview with Invest:, Kevin Algee, managing partner at Ennis, Pellum & Associates CPAs, discussed the opportunities for the accounting sector in Jacksonville, workforce challenges and workarounds, and the importance of forming broad partnerships with various industries to provide holistic advice to clients.
What have been some of the main highlights and key milestones for Ennis, Pellum & Associates CPAs in Jacksonville over the last 12 months?
Over the last 12 months, we have experienced tremendous growth. This growth has been natural, driven by changes in the market rather than through mergers and acquisitions, which have been quite common in the accounting industry. We relocated our office after being in our old location for about 20 years. Previously, we were split between two buildings. We have since consolidated into one building, and this move has allowed us to revamp and revitalize our workspace with new furniture and technology. Now, everyone coming into the office can essentially plug in anywhere, although we do have assigned seats. The goal was to bring the team together in one space, and it has worked well. We now see more people coming into the office consistently, even though we do not require it.
Additionally, we have promoted two new partners, which is exciting as it helps us serve the expanded business we have generated. We are also exploring several other opportunities to continue supporting our culture. We have won local, state, and national awards for being a Best Place to Work, which are particularly meaningful because they reflect the feelings of our team rather than just our own.
What are some notable trends, changes, or highlights in the accounting sector and landscape in Jacksonville?
The accounting landscape in Jacksonville is quite similar to that elsewhere. There is significant merger and acquisition activity, with larger firms looking to establish a presence in this market. Private equity is also entering our industry more rapidly than before, which is a notable change over the last few years. Like many others, we have faced challenges with staffing and finding qualified professionals, particularly since COVID.
The accounting industry has a significant number of baby boomers retiring, and unfortunately, colleges are not producing enough graduates to fill the gap. It is often compared to a swimming pool with a crack in it, where only a garden hose is available to keep it filled. Despite these challenges, we have maintained a good team and attract the people we need, largely thanks to our reputation.
Another shift in the industry is the attitude toward outsourcing. Six years ago, outsourcing was met with resistance, but that has changed rapidly in the last two or three years. This change is partly because our clients have become more receptive to firms using outsourcing, understanding that the available talent has decreased.
Are there any other significant challenges, besides those related to the workforce, that are affecting the industry or your company specifically?
One of the major impacts on the industry right now is the rise of artificial intelligence. It is crucial to ensure that AI is used responsibly while also leveraging it to increase efficiency. We are constantly adapting our processes to extract data from documents in a meaningful manner and remain competitive in this evolving landscape. Technology, in general, is changing rapidly, and we are continually evaluating our tools to ensure they are up to date. This approach helps us stay competitive and equips our team with the best version of what is available and to mobilize resources in a responsible manner.
Where do you see growth taking place in the next year or so, whether from the services side or from an industry perspective?
The client accounting side (whereby the firm serves as a client’s accounting team) is where there is a lot of opportunity for firms to expand. The shrinking pool of U.S. talent affects us, but it also affects businesses. If businesses have jobs they cannot fill or are at an inflection point where they need more help but are not ready to hire another full-time employee, accounting firms have found a niche. They can step in and help fulfill those roles by sourcing for the company. This is not done through offshoring, but through an accounting firm that takes on some of those duties. Building out that practice is something we have focused on in the last two years, and we see tremendous potential for growth there. We can add value from a high level, maybe even a CFO level, down to the data entry and bookkeeping pieces, and still keep it as one cost without needing multiple people for different companies.
Another area with significant growth is in the retirement of other practices. This provides an opportunity for us to pick up clients whose CPAs have decided to retire. This is where we have a reputation that gives us a lot of opportunities. Everyone has to have their taxes completed, so when their current CPA leaves, they cannot just opt not to do it. We are well-positioned to take advantage of that opportunity.
How are you advising clients, whether at the individual level or the midmarket level, considering potential economic headwinds?
We would all like a crystal ball because our predictions are not always on point. What we do is use our opportunity to see multiple companies from an outside perspective, allowing us to understand general trends. We can then advise our clients by sharing trends and considerations that other companies are thinking about. One of my favorite quotes is, “You cannot think of something until you have thought of it.” So, if we mention something to our clients that they had not considered, that opens up an avenue for exploration and evaluation. It could be a risk, a concern, or a trend – basically something to work with and manage toward.
What are some of the talent acquisition initiatives in Jacksonville, specifically for the accounting sector and certified public accountants (CPAs)?
The industry is facing a challenge in this regard. However, we have been successful in building our culture, and we are fortunate to have a reputation that precedes us when talking to candidates. We do a lot for our team, which helps, especially as we are a local firm. We are not one of the biggest accounting firms, and people coming out of school are often told they need to start their careers with the Big Four or the Top 8 firms, including the regional firms in the area. However, we win because people know who we are and want to work here.
For the industry, challenges are driving more firms to turn to outsourcing. Over the last two years, the number of firms offering outsourcing services to our industry has grown exponentially. In the last six months, there has been no shortage of new companies reaching out to offer us outsourcing solutions. That is where most of the solutions for talent acquisition are coming from currently.
How do the various partnerships that you have in place contribute to your operations and overall business development?
When working with family-owned businesses or those with a close ownership group, not a widespread one, it is essential to coordinate with other providers, whether they are banks, wealth managers, or attorneys. We ensure that everyone is on the same page regarding the advice being given. It is crucial that addressing an issue in one area does not have an adverse effect in another, such as tax implications. By coordinating with other providers, we ensure we are offering the best advice from all angles, rather than just focusing on one area and potentially causing an adverse impact in another.
