Accounting consulting: How to become an accounting consultant Thomson Reuters

Grant Thornton employs about 8,000 people in the U.S., which means the firm has cut more than 6% of its workforce so far in 2023. With a workforce of about 8,000 in the United States, the company’s latest action demonstrates Grant Thornton’s substantial readjustment in response to shifting market demands. Becoming an accounting consultant takes a special set of skills beyond your technical accounting expertise. Technical skills aren’t necessarily the divide between a great consultant and a mediocre one.

There’s another practical difference between serving as a traditional accountant and becoming an accounting consultant; namely, it’s how you get paid. Conventionally, accountants bill for time spent, whereas a consultant usually provides up-front pricing for specific consulting engagements, above and beyond the hourly billing for compliance and technical services. If you’re wondering how to transition into accounting consulting, you’re in good company. It’s fairly common for CPAs to become part-time or full-time consultants just prior to retirement, while others enjoy the benefits of greater flexibility and control over their schedules earlier in their careers.

Accounting consultant hourly rates

If you’re selling your consulting services through an accounting firm or management firm, you may not have to look very far for consulting clients. If you’re putting up a new independent contractor shingle, you will need to market and sell yourself to various companies and individuals in order to bring in the new consulting engagements. The latest moves began with human resources calling affected people starting Wednesday and through the end of the week. The layoffs sent shock waves throughout the firm since it had just announced record revenues for the fiscal year ending July 31 of $2.4 billion after the firm’s round of cuts. As a Deloitte Tax intern, you’ll work with diverse and talented teams to help clients analyze the tax effect of complex decisions, reduce overall tax rates, and pursue performance objectives. You will collaborate daily with our tax team to perform research and analysis, and utilize your consultative skills to turn findings into actionable solutions.

  • Technical skills aren’t necessarily the divide between a great consultant and a mediocre one.
  • When you ask what accounting consultants do, there are many different answers, depending on the different needs their clients have, the areas of specialization they focus on, their geographic region, and many other factors.
  • An ongoing survey by Indeed shows that the average salary for accounting consultants in the United States is $78,960 per year (as of April 2020).
  • You would consult on that, offering an analysis from an accounting and tax perspective, based on the business, the client’s goals and objectives, and specific needs.

But people at Grant Thornton who spoke to Fox Business said the cuts are more ominous and signal management’s fear that a recession isn’t just possible but a likelihood. Employees also told Fox Business that they expect another round of layoffs before year’s end. In a move that may signal a bracing stance against potential economic turbulence, Grant Thornton LLP, a titan in the professional consulting and advisory sphere, has initiated a second wave of layoffs, cutting an additional 200 jobs.

Is there demand for accounting consulting services?

Hourly rates for accounting consultants range from $27.39 (Tampa, FL) to $44.39 (Washington, D.C.). An ongoing survey by Indeed shows that the average salary for accounting consultants in the United States is $78,960 per year (as of April 2020). Department of Labor’s Bureau of Labor Statistics, the unemployment rate for accountants and auditors was 1.4% in the fourth quarter of 2019. According to, accounting consultants are the number one most sought-after types of consultants. An accounting consultant can serve as both teacher and guide for a business, especially when the business could benefit from accounting services or improvements to their own accounting processes and procedures. Some employees told Fox Business they believe the company is preparing for significantly tougher times ahead after the Fed announced it will continue to keep monetary policy tight to combat inflation for the foreseeable future.

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According to Fox Business, the layoff process at Grant Thornton began last week, with human resources reaching out to the impacted employees. Fox Business also reported that the internal shake-up coincided with the firm’s announcement of a fiscal high, boasting $2.4 billion in revenue for the year ending July 31. Grant Thornton confirmed the layoff of 200 staff members to Fox Business, following an earlier reduction of 300 jobs in the United States in May, impacting the advisory positions predominantly. The layoffs come amid signs of a looming economic slowdown that has put pressure on corporate America’s profitability prospects. The firm, which recently boasted record revenues, is yet again reducing its workforce, marking over 6% in cuts this year alone, according to Fox Business. The accounting firm’s strategic decision underscores the industry’s cautious navigation through an uncertain financial climate and has ignited discussions regarding the broader implications for the U.S. economy.

Getting started can be as simple as merely getting your name out there to your existing clients and referral sources or as complicated as starting a business from the ground up. In addition, prior to the global pandemic, client expectations were already shifting. The future CPA is one who provides consulting services through an advisory lens – offering more than compliance work and serving as a more holistic business partner.

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With Practice Forward content, tools and guidance, you can expand into advisory services, improve margins, drive growth, and elevate client service. Shifting demographics, changes in consumer behavior, a dynamic tax and regulatory environment, technology, and a multitude of other factors are having a profound impact on the future of accounting. Which types of consultants are in biggest demand will likely change from year to year, as the profession continues to evolve to meet consumer needs. Let’s examine the definition of accounting consulting and describe exactly what accounting consultants do, how to become an accounting consultant, why you should consider making the switch, and much more. Meanwhile, Grant Thornton could face a “major talent exodus” in the U.S.; sources told Fox Business that employees are openly shopping their resumes on online forums, looking to beat the dreaded call from HR that they’ve been laid off.

Another option is to consult on the side, or in between permanent jobs. Being an accountant can mean far more than preparing tax returns, compiling financial statements, handling technical compliance work or providing back-office accounting services. It’s becoming increasing popular for many CPAs to offer their services in an accounting consultant capacity, which is a bridge to becoming the holistic trusted advisor consumers are looking for in today’s economic climate.

Read our white paper, How accountants work from home successfully, to discover specific steps you can take now, along with insights into how you can effectively manage your business remotely. Additionally, forensic accounting, internal audits and accounting system evaluation are among the more in-demand skills. Of course, the COVID-19 pandemic may affect the profession to a degree, but over the past decade, accountants and auditors have maintained higher employment rates than many other professional positions.

While there are similarities, the primary difference between advisory services and accounting consulting is the length and purpose of the engagement. “There’s going to be a major talent exodus,” said one person close to the matter. “The problem is that management isn’t saying anything, so people think the worst.” In light of the recent developments at Grant Thornton, sources warned Fox Business a “major talent exodus” may occur, with many employees preemptively exploring new opportunities to avoid the uncertain fate within the firm.

Other consulting firms such as Ernst & Young and BDO have also cut staff this year amid a slowdown in demand for such services. Demand for consulting services increased significantly during the COVID-19 pandemic from public companies looking to adjust to new workplace rules and executives working from home more. In May, the company cut about 300 jobs across its U.S. division; how to write off bad debt the recent cuts that began late last week haven’t been reported. They will mainly affect so-called advisory positions at the company, sources with direct knowledge of the matter tell Fox Business. A consulting gig is typically temporary, designed to help your client with a specific problem or situation, such as determining which entity type is the best for their new venture.

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Retained earnings analysis

Growth activities might be research and development, expanding premises, or hiring employees. Further, the retained earnings could be spent on outstanding loans, mergers and acquisitions, or improving infrastructure. The dollar change is found by taking the dollar amount in the base year and subtracting that from the year of analysis. Retained earnings also provide your business a cushion against the economic downturn and give you the requisite support to sail through depression. Upon combining the three line items, we arrive at the end-of-period balance – for instance, Year 0’s ending balance is $240m.

Retained earnings allow you to analyse the financial health of a company, evaluate the company’s dividend policy, and identify the capacity of the business to fund its operations without needing to borrow or raise additional capital. Assuming your business isn’t new, deduct from the retained earnings figure any dividends that you want to pay from Q2 to yourself, other owners of the business, or shareholders. Generally speaking, a company with a negative retained earnings balance would signal weakness because it indicates that the company has experienced losses in one or more previous years. However, it is more difficult to interpret a company with high retained earnings. For this reason, retained earnings decrease when a company either loses money or pays dividends and increase when new profits are created. The RE balance may not always be a positive number, as it may reflect that the current period’s net loss is greater than that of the RE beginning balance.

What is the implication of negative retained earnings on a company’s financial health?

This meets the aim of removing the discrimination and making sure that public service pensions are reformed appropriately. The same applies to employee contributions which were not paid in the legacy scheme and would have been paid in the reformed scheme (assuming someone in this position actually opts for reformed scheme benefits). 6.112 After considering the responses to the consultation and informal engagement, the government is content that the proposed changes will achieve the policy intention. This includes provisions to allow schemes to provide compensation for financial losses where members can demonstrate they would previously have taken a different course of action were it not for the discrimination. If members feel they have suffered additional losses over this would need to be taken up through the normal channels. 6.59 The rules governing AY for the legacy schemes limit the amount of service a member can buy and, in many cases, mean that a member cannot buy AY at all.

6.132 Scheme Managers have discretion to waive liabilities owed by a member to the scheme in certain circumstances. The application of this discretion will be undertaken in accordance with HM Treasury Directions. Whilst the Home Office does not own this policy, we are willing to work with the fire sector to create informal guidance for employers to consider.

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It is not desirable to inadvertently prevent a member from qualifying just because they have very unusual circumstances. 6.104 Some responses questioned how the additional accrual from reinstated service (rectified opt-outs) would be treated under the tax regime. Some responses were keen that it should not be treated as accrual in the current tax year, rather it should be smoothed and treated as accrued across What is Cash Over and Short? the remedy period. 6.103 Some responses were also keen that 2015 scheme members who had purchased added pension should be allowed to convert it to additional service in the relevant legacy scheme. 6.87 It was suggested that the provision that allows a scheme manager to put a survivor benefit into payment in advance of making an election (paragraph 9 of regulation 11), should be mandatory not permissive.

The statement of retained earnings is mainly prepared for outside parties such as investors and lenders, since internal stakeholders can already access the retained earnings information. Some of the information that external stakeholders are interested in is the net income that is distributed as dividends to investors. Fortunately, What Is a Personal Accountant? 10 Things They Do For You for companies with at least several years of historical performance, there is a fairly simple way to gauge how well management employs retained capital. Simply compare the total amount of profit per share retained by a company over a given period of time against the change in profit per share over that same period of time.

Find your net income (or loss) for the current period

4.6 In line with HM Treasury Directions, interest is applied to individual calculations and is not netted off. Where a payment of interest needs to be made, the scheme manager will individually apply interest to any debit and credit, and these figures will be added together to reach the final interest liability. 2.2 The draft regulations also included provisions to correct any overpayment or underpayment of pension benefits or member contributions. This includes benefits or contributions paid to or by a member because of their choice.

Retained earnings analysis

Retained Earnings is a critical financial metric that reveals the cumulative net earnings a company has retained over time, rather than distributed as dividends to shareholders. This amount represents the company’s profits that have been reinvested in the business. You calculate retained earnings by combining the balance sheet and income statement information. For an example, let’s look at a hypothetical hair product company that makes $15 million in sales revenue. Retained earnings refer to the profits accumulated from previous financial years, minus any dividends paid out to shareholders.