5 practice management tips for accounting firms in 2025

This article was current at the time of publication.

Small businesses are expected to face significant challenges in 2025 with business failure rates returning to pre-2020 levels. Lack of resources, increased competition, late payments and cyber-attacks are all things SMEs, including public practices, must contend with. 

To stay on top of everything, industry leader Peter Knight and CPA Australia professional standards managers, Jodie Smith and Benedict Siu, recommend having a solid plan for the year, shaking off dead wood and setting yourself up to be compliant at all times.

Tip One: Have an agenda

Decide what your firm aiming to achieve this year.? Are you looking for growth, new services or both? Make sure your insurance covers your plans or whether you need additional licences or registrations. 

Peter Knight FCPA says the big goal for him and his team this year is to work on a “much deeper level with clients”.

“To be able to spend more time with our Top 20 clients, we aim to diversify our risk and focus on the work we love. For us, this is finding the right blend of compliance and advisory work. 

“Clients want more than compliance; they don’t want only advisory. They want a mix. Our role is to find the balance for each client. One size does not fit all.”

Having an agenda also helps avoid being reactive.

Benedict Siu, Manager, Audit and Assurance, Professional Standards at CPA Australia, recommends public practices set aside sufficient time to reflect on the wins and fails of 2024 and plan for 2025 and beyond.

“A strategy day allows you to consider governance and compliance matters, such as risk and quality management policies and procedures and the updating of templates, tools and resources. 

“You can also consider financial and operational matters and plan out the pipeline of work for 2025 to ensure sufficient and appropriate resources are in place to meet all client obligations and deliver quality engagements.”

Tip Two: Conduct a client audit 

Now is the time to weed out unwanted clients.

Jodie Smith FCPA, Manager, Non-Assurance, Professional Standards at CPA Australia, recommends using CPA Australia’s resource material to do this.

“Review your client acceptance and retention policy in your Quality Management Manual. 

“Also determine any clients that may no longer fit your firm’s ‘ideal client list’. For ceasing any engagement relationship, make sure you provide it in writing.” 

Don’t hang on to troublesome clients.

Knight says: “We are actively exiting clients. The criteria? The amount of stress they cause.”

Tip Three: Scrutinise debtors 

Bad debt can cripple a small business with clients going under potentially dragging accountants with them.

Siu urges public practices to “perform regular reviews of the aged debtor listing and follow up as appropriate”.

Most of Knight’s clients are on monthly retainers. 

“We don't have bad debts. Any out-of-scope work is identified, discussed with the client and an invoice sent before we start. I used to think this would all be too hard, but once I made the decision, I haven't looked back.”

Tip Four: Have terms of engagement in place

When onboarding clients look for red flags.

“We check the Australian Taxation Office for outstanding lodgements, also their financial statements regarding tax debt and super,” says Knight. 

“Also, if they have changed accountants in the recent past, we ask ‘how come?’”

Smith encourages practitioners to be guided by CPA Australia’s APES Terms of Engagement.

“Review your Terms of Engagement (APES 305) for all the services you provide to ensure they include the mandatory requirements for the applicable standards. Maintain a signed copy on the client file. 

“Update the Terms of Engagement annually with your clients, before commencing the engagement.”

Tip Five: Update staff training and compliance

Make sure all staff on board with your 2025 agenda and up to scratch technically.

Equally, ensure all Continuing Professional Development obligations for both CPA Australia and any licences and registrations that you hold are met.

Smith urges practitioners to make time to review key guidelines such as the APESB standards, Quality Management manual and Risk Management Framework and Terms of Engagement templates.

“Also subscribe to the APESB eNews updates and ensure staff are across any changes.”

Practitioners have many requirements to stay up to date, depending on their licences and registrations. All CPA Australia Public Practice holders must also keep up with their APESB requirements. 

Siu says: “Conduct regular training or enrol in external training. Join networking or discussion groups. Look out for communication from the relevant professional bodies.”

Accountants face increasing regulation but as Knight says at the end of the day “all we really need to do is talk to our clients with non-technical jargon, understand their pain points, and see if we can help.”