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Beyond rainmakers: The new face of business development in accounting

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The rainmaker days are over.

Rainmakers, the select charismatic few — usually partners — who brought in the vast majority of an accounting firm’s clients, are becoming obsolete as firms professionalize business development and shift their reliance off the individual and onto the collective team. Looking ahead, experts say the most successful firms will be those that entrench themselves in a niche and poach clients with their hyperspecialized services.

In the past, firms’ growth strategies were rudimentary and unsophisticated, according to Gale Crosley, CEO of Crosley and Co. Firms relied on the individual contributions of rainmakers to generate the bulk of their revenue while growth strategies remained largely unchanged year to year. Now, especially since the Paycheck Protection Program stimulated growth during the COVID-19 pandemic, “driving demand is on cruise control,” Crosley said.

“The fish are jumping in the boat. They’ve been jumping in the boat for five years, and it’s not a business problem they have to solve right now,” she explained.

Modern rainmaking art.jpg

It’s a straightforward scenario where there is too much work to do and not enough talent or time to do it, meaning strategic growth is on the backburner for many firms as they manage day-to-day business operations.

“Fulfilling the demand side is sucking all the energy out of the firm,” Crosley said. “They’re totally focused on getting the laundry out the door, offshoring and technology.”

“The firms who are on it — the A+ firms who have always been on it — they’re not hitting the pause button,” she continued. “Only firms who always knew that they had to carve out that time and say, ‘We’ve got to look at growth strategies for the future,’ those are the ones who are doing it right.”

Modernizing business development

Firms are now formalizing and structuring the process of finding and bringing in new clients. The first key to modernizing business development is moving the responsibility of client acquisition beyond individual rainmakers.

“It’s taking more of a matrix, relationship-focused approach, instead of a singular source of that rainmaker being out with the client,” said Rebekah Gardner, chief growth officer at Top 25 Firm Wipfli. “You start to identify these segments, these clients and prospects, and then you look at the team that you have on your bench, and you start to match up relationships and skills, and you build that matrix.”

The second key is specialization. Competition for clients is increasing as more firms look to own entire market segments and tailor their services to those select niches. Firms that choose to stay generalists put themselves at risk of losing business.

(Read more:Pathways to Growth: Strategic client development.)

“You have got to have industry experts sitting on your team so that you build that ability to have a conversation at their level,” Gardner said. “If you can’t show up like that, I don’t think you belong in the game sometimes.”

“Specialization and niches allow firms to perform a much higher value service to their clients,” said Tim Petrey, CEO of HD Growth Partners, a member firm of private-equity-backed accounting firm platform Ascend. “They can get much deeper with a client than the surface-level tax and compliance work. As a result, you form a higher degree of trust between the accountant that owns the relationship and the client much faster. It can be difficult for a ‘generalist’ style firm to compete with industry experts.”

But it’s easier said than done. Becoming a specialist requires the difficult task of dropping low-profit, time-consuming clients, and focusing resources on high-growth, high-return clients.

“Firms need to improve by looking closely at the clients they best serve and build a marketing strategy around that,” Petrey added. “Treat your firm like a real business and it’s amazing what comes naturally from that. Treating a firm like a partnership often leaves marketing efforts stale because partners can’t agree on the strategy, the ideal client profile, the budget, or even just as simply the contribution of their staff’s time to the efforts.”

The decline of rainmakers

The accounting profession’s ongoing labor shortage impacts everything within a firm, especially business development.

“Finding great accountants is hard enough. Finding great accountants who can sell is like hunting for a unicorn,” Petrey said.

“With one person coming into an industry for every five who are leaving, staff are getting asked to do things earlier on in their careers than their predecessors. Partners and shareholders are getting younger and younger because firms need to find a way to get those great people locked in for years,” Petrey continued. “As a result, most firms never focused on building any real brand loyalty. There is loyalty to an individual but not loyalty to a brand. The rainmakers of the prior generation are still out winning business the old school way, but there aren’t enough of those rainmakers in the next generation.”

“That’s the crux of the problem,” said Bob Lewis, president of The Visionary Group. “Why we have so much M&A going on right now is because of the lack of business development and a lack of networking skills. “

Besides, the traditional rainmaker model isn’t necessarily the best fit for modern firm culture. “When a firm has a great rainmaker that is a poor manager, leader or colleague, they’ll often look past their issues as a leader because they generate so much revenue, which causes firms to further struggle to maintain or improve culture,” Petrey said.

Instead of relying on rainmakers, some firms have turned to the internet and search-engine optimization to supplement client acquisition.

“What they missed is that the activity you generate through SEO is typically the type of clients you don’t want. It’s clients that are searching the internet looking for a new provider,” Lewis said. “The good clients go through the professional network. They go through the bankers, they go through their lawyers, they go through the insurance agencies, and they get referrals into another accounting firm.”

“I can replace the accounting part, the tax part, overnight. I can’t replace the trust part, and that’s what people have learned and figured out how to sell,” Lewis said.

The rise of the CGO

With the sunset of the rainmaker era comes the dawn of the chief growth officer.

CGOs are the newest additions to small and midsized firms’ staff. While mergers and acquisitions certainly fall within a CGO’s remit, they are also focused on trimming clients that don’t fit the firm’s portfolio, upskilling the next generation of partners, adding more advisory services, and expanding relationships with existing clients, Lewis said.

CGOs also need to be “making sure that people inside of the firm are being deployed in their highest and best use,” Wipfli’s Gardner said. “Traditionally we’ve used our own partners, rank and file, to think about these things, but sometimes it takes an outsider perspective to come in and say, ‘Hey, let’s think about this a little bit differently.”

Unlike the average accountant, CGOs specialize in general management. The addition of them into accounting firms is a new trend that has only been accelerated by the wave of private equity investment in the profession.

(Read more: The rise of the chief growth officer.“)

“Most accounting firms have historically run like a partnership rather than a real business,” Petrey said. “PE will continue to professionalize firms of all sizes to be better and smarter at business development. As a result, non-PE backed firms will need to find ways to make that investment into their firms to remain competitive.”

“​​The preexisting resource constraints and the seasonal nature of the business makes it really hard for anyone to make meaningful progress on a strategic initiative,” said David Wurtzbacher, CEO of Ascend, which is backed by PE firm Alpine Investors. Each of Ascend’s platform firms is required to have a CGO.

“For a long time, the public accounting industry couldn’t and didn’t attract general management type talent — think MBAs — because of the partnership model. It was, ‘We can’t really pay you that much, and we definitely can’t give you equity in these companies, and we’re not really growing that much,’ and so you didn’t have access to the talent markets the way other industries have access to it.”

“But the fact remains, there are people outside the industry who might be better suited for driving growth and transformation and strategic initiatives,” Wurtzbacher said.

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AICPA wants Congress to change tax bill

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The American Institute of CPAs is asking leaders of the Senate Finance Committee and the House Ways and Means Committee to make changes in the wide-ranging tax and spending legislation that was passed in the House last week and is now in the Senate, especially provisions that have a significant impact on accounting firms and tax professionals.

In a letter Thursday, the AICPA outlined its concerns about changes in the deductibility of state and local taxes pass-through entities such as accounting and law firms that fit the definition of “specified service trades or businesses.” The AICPA urged CPAs to contact lawmakers ahead of passage of the bill in the House and spoke out earlier about concerns to changes to the deductibility of state and local taxes for pass-through entities. 

“While we support portions of the legislation, we do have significant concerns regarding several provisions in the bill, including one which threatens to severely limit the deductibility of state and local tax (SALT) by certain businesses,” wrote AICPA Tax Executive Committee chair Cheri Freeh in the letter. “This outcome is contrary to the intentions of the One Big Beautiful Bill Act, which is to strengthen small businesses and enhance small business relief.”

The AICPA urged lawmakers to retain entity-level deductibility of state and local taxes for all pass-through entities, strike the contingency fee provision, allow excess business loss carryforwards to offset business and nonbusiness income, and retain the deductibility of state and local taxes for all pass-through entities.

The proposal goes beyond accounting firms. According to the IRS, “an SSTB is a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading or dealing in certain assets, or any trade or business where the principal asset is the reputation or skill of one or more of its employees or owners.”

The AICPA argued that SSTBs would be unfairly economically disadvantaged simply by existing as a certain type of business and the parity gap among SSTBs and non-SSTBs and C corporations would widen.

Under current tax law (and before the passage of the Tax Cuts and Jobs Act of 2017), it noted, C corporations could deduct SALT in determining their federal taxable income. Prior to the TCJA, owners of PTEs (and sole proprietorships that itemized deductions) were also allowed to deduct SALT on income earned by the PTE (or sole proprietorship). 

“However, the TCJA placed a limitation on the individual SALT deduction,” Freeh wrote. “In response, 36 states (of the 41 that have a state income tax) enacted or proposed various approaches to mitigate the individual SALT limitation by shifting the SALT liability on PTE income from the owner to the PTE. This approach restored parity among businesses and was approved by the IRS through Notice 2020-75, by allowing PTEs to deduct PTE taxes paid to domestic jurisdictions in computing the entity’s federal non-separately stated income or loss. Under this approved approach, the PTE tax does not count against partners’/owners’ individual federal SALT deduction limit. Rather, the PTE pays the SALT, and the partners/owners fully deduct the amount of their distributive share of the state taxes paid by the PTE for federal income tax purposes.”

The AICPA pointed out that C corporations enjoy a number of advantages, including an unlimited SALT deduction, a 21% corporate tax rate, a lower tax rate on dividends for owners, and the ability for owners to defer income. 

“However, many SSTBs are restricted from organizing as a C corporation, leaving them with no option to escape the harsh results of the SSTB distinction and limiting their SALT deduction,” said the letter. “In addition, non-SSTBs are entitled to an unfettered qualified business income (QBI) deduction under Internal Revenue Code section 199A, while SSTBs are subject to harsh limitations on their ability to claim a QBI deduction.”

The AICPA also believes the bill would add significant complexity and uncertainty for all pass-through entities, which would be required to perform complex calculations and analysis to determine if they are eligible for any SALT deduction. “To determine eligibility for state and local income taxes, non-SSTBs would need to perform a gross receipts calculation,” said the letter. “To determine eligibility for all other state and local taxes, pass-through entities would need to determine eligibility under the substitute payments provision (another complex set of calculations). Our laws should not discourage the formation of critical service-based businesses and, therefore, disincentivize professionals from entering such trades and businesses. Therefore, we urge Congress to allow all business entities, including SSTBs, to deduct state and local taxes paid or accrued in carrying on a trade or business.”

Tax professionals have been hearing about the problem from the Institute’s outreach campaign. 

“The AICPA was making some noise about that provision and encouraging some grassroots lobbying in the industry around that provision, given its impact on accounting firms,” said Jess LeDonne, director of tax technical at the Bonadio Group. “It did survive on the House side. It is still in there, specifically meaning the nonqualifying businesses, including SSTBs. I will wait and see if some of those efforts from industry leaders in the AICPA maybe move the needle on the Senate side.”

Contingency fees

The AICPA also objects to another provision in the bill involving contingency fees affecting the tax profession. It would allow contingency fee arrangements for all tax preparation activities, including those involving the submission of an original tax return. 

“The preparation of an original return on a contingent fee basis could be an incentive to prepare questionable returns, which would result in an open invitation to unscrupulous tax preparers to engage in fraudulent preparation activities that takes advantage of both the U.S. tax system and taxpayers,” said the AICPA. “Unknowing taxpayers would ultimately bear the cost of these fee arrangements, since they will have remitted the fee to the preparer, long before an assessment is made upon the examination of the return.”

The AICPA pointed out that contingent fee arrangements were associated with many of the abuses in the Employee Retention Credit program, in both original and amended return filings.

“Allowing contingent fee arrangements to be used in the preparation of the annual original income tax returns is an open invitation to abuse the tax system and leaves the IRS unable to sufficiently address this problem,” said the letter. “Congress should strike the contingent fee provision from the tax bill. If Congress wants to include the provision on contingency fees, we recommend that Congress provide that where contingent fees are permitted for amended returns and claims for refund, a paid return preparer is required to disclose that the return or claim is prepared under a contingent fee agreement. Disclosure of a contingent fee arrangement deters potential abuse, helps ensure the integrity of the tax preparation process, and ensures compliance with regulatory and ethical standards.”

Business loss carryforwards

The AICPA also called for allowing excess business loss carryforwards to offset business and nonbusiness income. It noted that the One Big Beautiful Bill Act amends Section 461(l)(2) of the Tax Code to provide that any excess business loss carries over as an excess business loss, rather than a net operating loss. 

“This amendment would effectively provide for a permanent disallowance of any business losses unless or until the taxpayer has other business income,” said letter. “For example, a taxpayer that sells a business and recognizes a large ordinary loss in that year would be limited in each carryover year indefinitely, during which time the taxpayer is unlikely to have any additional business income. The bill should be amended to remove this provision and to retain the treatment of excess business loss carryforwards under current law, which is that the excess business loss carries over as a net operating loss (at which point it is no longer subject to section 461(l) in the carryforward year).

AICPA supports provisions

The AICPA added that it supported a number of provisions in the bill, despite those concerns. The provisions it supports and has advocated for in the past include 

• Allow Section 529 plan funds to be used for post-secondary credential expenses;
• Provide tax relief for individuals and businesses affected by natural disasters, albeit not
permanent;
• Make permanent the QBI deduction, increase the QBI deduction percentage, and expand the QBI deduction limit phase-in range;
• Create new Section 174A for expensing of domestic research and experimental expenditures and suspend required capitalization of such expenditures;
• Retain the current increased individual Alternative Minimum Tax exemption amounts;
• Preserve the cash method of accounting for tax purposes;
• Increase the Form 1099-K reporting threshold for third-party payment platforms;
• Make permanent the paid family leave tax credit;
• Make permanent extensions of international tax rates for foreign-derived intangible income, base erosion and anti-abuse tax, and global intangible low-taxed income;
• Exclude from GILTI certain income derived from services performed in the Virgin
Islands;
• Provide greater certainty and clarity via permanent tax provisions, rather than sunset
tax provisions.

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On the move: HHM promotes former intern to partner

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KPMG anoints next management committee; Ryan forms Tariff Task Force; and more news from across the profession.

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Mid-year moves: Why placed-in-service dates matter more than ever for cost segregation planning

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In the world of depreciation planning, one small timing detail continues to fly under the radar — and it’s costing taxpayers serious money.

Most people fixate on what a property costs or how much they can write off. But the placed-in-service date — when the IRS considers a property ready and available for use — plays a crucial role in determining bonus depreciation eligibility for cost segregation studies.

And as bonus depreciation continues to phase out (or possibly bounce back), that timing has never been more important.

Why placed-in-service timing gets overlooked

The IRS defines “placed in service” as the moment a property is ready and available for its intended use.

For rentals, that means:

  • It’s available for move-in, and,
  • It’s listed or actively being shown.

But in practice, this definition gets misapplied. Some real estate owners assume the closing date is enough. Others delay listing the property until after the new year, missing key depreciation opportunities.

And that gap between intent and readiness? That’s where deductions quietly slip away.

Bonus depreciation: The clock is ticking

Under current law, bonus depreciation is tapering fast:

  • 2024: 60%
  • 2025: 40%
  • 2026: 20%
  • 2027: 0%

The difference between a property placed in service on December 31 versus January 2 can translate into tens of thousands in immediate deductions.

And just to make things more interesting — on May 9, the House Ways and Means Committee released a draft bill that would reinstate 100% bonus depreciation retroactive to Jan. 20, 2025. (The bill was passed last week by the House as part of the One Big Beautiful Bill and is now with the Senate.)

The result? Accountants now have to think in two timelines:

  • What the current rules say;
  • What Congress might say a few months from now.

It’s a tricky season to navigate — but also one where proactive advice carries real weight.

Typical scenarios where timing matters

Placed-in-service missteps don’t always show up on a tax return — but they quietly erode what could’ve been better results. Some common examples:

  • End-of-year closings where the property isn’t listed or rent-ready until January.
  • Short-term rentals delayed by renovation punch lists or permitting hang-ups.
  • Commercial buildings waiting on tenant improvements before becoming operational.

Each of these cases may involve a difference of just a few days — but that’s enough to miss a year’s bonus depreciation percentage.

Planning moves for the second half of the year

As Q3 and Q4 approach, here are a few moves worth making:

  • Confirm the service-readiness timeline with clients acquiring property in the second half of the year.
  • Educate on what “in service” really means — closing isn’t enough.
  • Create a checklist for documentation: utilities on, photos of rent-ready condition, listings or lease activity.
  • Track bonus depreciation eligibility relative to current and potential legislative shifts.

For properties acquired late in the year, encourage clients to fast-track final steps. The tax impact of being placed in service by December 31 versus January 2 is larger than most realize.

If the window closes, there’s still value

Even if a property misses bonus depreciation, cost segregation still creates long-term savings — especially for high-income earners.

Partial-year depreciation still applies, and in some cases, Form 3115 can allow for catch-up depreciation in future years. The strategy may shift, but the opportunity doesn’t disappear.

Placed-in-service dates don’t usually show up on investor spreadsheets. But they’re one of the most controllable levers in maximizing tax savings. For CPAs and advisors, helping clients navigate that timing correctly can deliver outsized results.

Because at the end of the day, smart tax planning isn’t just about what you buy — it’s about when you put it to work.

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