As we all know, 2020 was a challenging year for most businesses, and Calvetti Ferguson had to pivot and adjust to this new world of normal. We first reacted to the pandemic by following the CDC and state guidelines having our employees work from home. We were still very attentive to all our clients, providing them with regular updates by email, phone calls, and video calls. Our team members were able to provide updates with articles published on our website through a dedicated resource page.
We had many clients needing assistance with certain services related to the pandemic so we shifted our focus even more by providing clients assistance with PPP loan forgiveness and most recently the Employee Retention Tax Credit. As a firm, we know our culture is what sets us apart, and even during the pandemic we wanted to nurture that with our team, so we implemented a program called ‘Connection Teams’. This program is designed to foster connections across firm service lines by grouping team members on a variety of criteria and give them the opportunity to meet for regular lunches, happy hours, and outside of the office team-building activities. Although this was a challenging time, we preferred to look at it as an opportunity to be creative in how we served our clients and grew our team members. Jason Ferguson, Managing Partner speaks about the impacts of the coronavirus and how it affected our firm.
How has your business been impacted by the coronavirus crisis?
During the coronavirus pandemic, we gained a significant number of middle market clients who chose to move from Big 4 accounting firms. We typically have clients who move their tax or audit engagements from large international CPA firms to regional CPA firms like ours; however, in 2020 we saw a larger increase. We also had an increase in revenue due to COVID legislation-related services, like PPP loan forgiveness assistance and employee retention tax credits.
Any time there is economic disruption in a market, there is an opportunity to initiate transactions like acquisitions. While we are consistently looking for firms to acquire in our existing markets, the downturn allowed us to close two acquisitions on January 1, 2021 – a CPA firm in Fort Worth, TX as well as an expatriate tax practice in the Woodlands, TX.
Talent acquisition proved to be an area of success for our firm during the pandemic. Our total staff grew by more than 20% year over year. When employees feel they are in an uncertain situation, then read about our firm continuously growing both organically and through acquisitions, it makes them view us as a more stable and favorable place to work.
Have there been any significant regulatory developments in the US market over the last 12 months?
In the last 12 months, the entire business environment has changed significantly as a result of COVID-related executive orders and regulations at the federal, state, and local levels. It is difficult to discern which orders and regulations will stay around long term, and which are only temporary because of the pandemic.
There have been two significant regulatory programs which have had a positive impact on our clients. First, the Paycheck Protection Program (PPP) loans have helped small and middle market businesses across the U.S. stay afloat while they navigate the pandemic. The good news for PPP loan borrowers is that these loans are eligible for forgiveness provided the client meets certain criteria. The second regulatory program assisting our clients has been the Employee Retention Tax Credit (ERTC), which for qualifying businesses allows a credit in each calendar quarter against payroll taxes. Important to note is that while the ERTC was only extended through June 30, 2021, the value of the credit has been sharply increased making it a compelling payroll tax savings option for clients who qualify.
How do your clients feel about the country’s economic prospects for the remainder of 2021 and beyond now that there is a new administration in the White House?
Given the new administration in the White House, our clients are a little nervous because every time there is a new administration there is a lot of uncertainty. Since we don’t know what is going to be the most important initiative, most clients have adopted a ‘wait and see’ attitude. Economically, we have heard an increase in talk around the potential for inflation 24 or more months from now. With inflation, there is concern about the impact it could have on the economy and the capital our clients would have access to in order to grow their businesses. For the most part, our clients believe we will be in a better place one to two years from now, given the shutdowns and resulting economic turmoil from the past 12 months.
To read more about optimism across the US accounting industry, please click here.