The taboo around discussing and comparing accounting salaries is slowly fading. New salary transparency legislation is being passed in states like New York and California. Thousands of accountants are using salary comparison websites to view and share salary data openly. Having more transparency around pay is a boon to employees and job seekers alike. But can pay transparency also benefit employers? The answer is a resounding yes.

When a firm is following a data-driven approach to compensation — for instance, by comparing its salaries to industry benchmarks for each position — it can help set reasonable compensation expectations for employees. For example, some of my previous employers committed to benchmarking our compensation to the 75th percentile, communicated it to employees, and showed the calculations they used to arrive at their conclusion. From that point forward, anyone who was unhappy about their compensation could no longer claim they were “underpaid.” Instead, they had to approach their pay argument from a more quantitative perspective. 

To justify being paid beyond the 75th percentile, a team member would have to show why their contributions to the business were well beyond the 75th percentile — and how their efforts were reflected in the company’s performance. In this scenario, it’s important for the 75th percentile to be based on data relevant to the employee. For example, according to our firm’s data, a tax manager at the 75th percentile across the U.S. in 2024 has a base salary of approximately $150,000. But in the case of an employee working in-office in New York City, that same 75th percentile would be a $183,000 base salary to account for a higher cost of living.

Any increase in salary beyond the benchmark would need to be accompanied by a commensurate increase in company performance beyond that benchmark. As a result, the firm becomes more results driven and employees become better aligned with the company’s goals. 

Improving engagement through psychological security

Being transparent when setting compensation is a great way to align employee incentives with company performance. Further, it provides a great amount of psychological safety. There aren’t many professionals who are more numbers-driven than we accountants. It’s natural to wonder if you are optimizing your earnings by staying at your current firm or jumping ship. I’ll get to that in a minute. Just know that thinking about your comp takes up a lot more mental energy than you might think. Replaying your last compensation discussion over and over in your head can be stressful and counterproductive. It’s easy to spend an inordinate amount of time thinking about your next steps for getting a promotion or perusing through open jobs online to see if your current compensation is at the “market” rate.

You can put your mind at ease when you are confident that your firm is taking care of you and is making its best efforts to ensure your compensation is in line with market rates. When the psychological burden of pay equality is lifted, you can focus better and do your best work. That’s great for you and great for the firm.

Avoiding inequities and the dreaded loyalty tax

When employers don’t take a data-driven approach to compensation discussions, however, pay inequity continues in two important ways:

1. Employers end up being reactive rather than proactive. If an employee comes forward with a competing offer, they try to match it; if someone negotiates harder, they capitulate. And they end up with a number of employees with the same job titles providing similar value, with comparable experience, but who are paid vastly differently. And these pay disparities inevitably come to light, which reduces the team’s morale, productivity and loyalty to the firm. They may also find themselves guilty of perpetuating a gender pay gap or succumbing to unconscious biases.

2. Employers inadvertently create a “loyalty tax.” They are flexible on salaries to attract talent to the firm but are not offering the same salary bands to internally promoted employees. So, they end up creating a vicious cycle in which employees feel they must change jobs every few years in order to be paid competitively. That’s a drain on all parties involved as the firm loses institutional knowledge and must bear the costs of constantly recruiting, hiring and training new talent. Meanwhile employees feel they must leave a firm — no matter how happy they are there —- if they want to be compensated competitively. This can be avoided when firms are transparent about their compensation policies and adhere to them. 

So, where’s the line?

If you’re an employer, I’m not proposing you leave a spreadsheet in the company breakroom containing everyone’s salary information. Some companies opt for a radical level of transparency, but that’s not necessary to reap the benefits I’ve discussed above. Just having a system you stand by can change compensation discussions from emotional to objective. This makes everyone more productive on your team and reduces hard feelings.

One way to do this is to share the way you benchmark salaries openly, and at what percentile you are looking to peg salaries. Even if you aren’t meeting an aggressive benchmark like the 75th or 90th percentile, you can communicate clearly to employees that the firm is choosing a given benchmark because it makes up the salary gap by offering a generous vacation policy, reduced workload or maybe reduced summer hours.

As my mom always told me growing up, honesty is the best policy.

Tech-forward accounting firms — including those listed in this year’s Best Firms for Technology — have devoted a lot of time and resources toward improving the client experience, particularly when it concerns onboarding. 

Whether evaluating potential clients, accepting new ones, or working with existing ones, managing them all was a clear pain point for many firms, leading them to concentrate on improving the efficiency and efficacy of their processes at every stage. Some, like Top 25 firm Cherry Bekaert, focused their efforts on the start of the process when evaluating and accepting new clients, according to assurance partner Jonathan Kraftchick.

“One major advancement was the implementation of a custom-built solution that reduced the average time for our client acceptance process by more than half. Additionally, we automated our engagement letter process for assurance and are in the process of extending this feature to the rest of the firm. This platform is significantly reducing the time from initiation to final signature,” he said. 

Satori Studio – stock.adobe.com

EisnerAmper, another Top 25 Firm, also focused on the engagement letter process, having moved it to a SaaS-based system that chief technology officer Sanjay Desai said automates the creation, routing, approval, delivery and tracking of engagement letters for faster, smoother and more consistent processes. This, he said, has served to both reduce manual effort and improve client relationships. 

“The platform also plays a key role in risk management, using standardized templates and workflows to ensure compliance with firm policies and regulatory requirements. In addition, we’ve introduced a centralized SaaS-based client portal that enhances collaboration and visibility across all engagements. The new portal also includes improved data collection functionality creating a more efficient, connected and transparent experience for clients,” he said. 

Beyond client intake, some firms also reported developing new solutions they could offer to clients to improve value. Iowa-based Community CPA and Associates, for example, developed a new payroll portal that lets clients upload hours, enter new employees, update employee info, retrieve payroll documents and delegate access. 

Meanwhile, Top 50 firm LBMC developed and implemented its own practice management application to provide real-time client engagement KPI dashboards, which CEO Jim Meade said should “significantly improve engagement realization as well as enhance the client experience.”  

Finally, firms did not ignore the matter of actually getting paid by the client. Many reported improved billing and collection processes driven by new technology investments, such as Illinois-based Mowery & Schoenfeld. 

“As with any firm, billing and revenue collection is key to our cash flow and success,” said Chris Madden, director of information technology. “We have invested in and implemented a new technology solution to assist with collections with a goal of improving this process.”

Security improvements

Many tech-forward firms also focused heavily on cybersecurity as both the number and scale of threats continues to increase. For some, like California-based Navolio & Tallman, these efforts have largely been about process. The firm recently changed how it vetted new cloud-based tools. 

“We look closely at security, usability, and how well each tool fits with our goals,” said IT partner Stephanie Ringrose. “Reviewing vendor SOC 2 reports and similar documentation is a key part of that process, helping us ensure that everything we adopt meets our standards for data protection and compliance. This approach has already helped us roll out some great new technology for our family office team, and we’re continuing to build out a flexible, modern tech stack that really supports their specialized needs.”

Others, like Top 50 firm UHY, took a more technical approach, utilizing a number of new tools over the past year, including some driven by AI, which chief information officer Russell Gibson said has become a differentiating feature with clients. 

“Recognizing the increasing sophistication of cyber threats — especially those leveraging AI — we’ve adopted AI-driven cybersecurity technologies to identify and mitigate threats more swiftly and efficiently. These tools have been critical in safeguarding our firm and our clients from evolving cyberattacks, including ransomware and sophisticated phishing campaigns. Our proactive stance on cybersecurity and AI-driven solutions has positively influenced how we acquire new clients. Demonstrating our commitment to advanced technology and rigorous security protocols has differentiated our firm in a competitive marketplace, assuring potential clients of our ability to securely handle their sensitive information,” he said. 

And, of course, AI

Firms also made major investments in AI that have since paid off. They have used it to automate routine processes, provide insights and strengthen core services. For instance, Allen Smith, chief information officer at Top 25 firm Baker Tilly, has heavily integrated AI tools into both tax and workflow over the past year. 

“Overall, the biggest way that technology has changed our firm this year is by leveraging and adopting emerging technologies,” he said. “For our assurance practice, that means incorporating AI tools into our methodology and workflow; and in tax, new technologies and AI are changing the skill sets of our tax professionals. By embedding AI chat capabilities in tax research platforms, it drives tax professionals to their answers quickly and through a more comfortable conversational approach. Skills are transforming from having to know the answer to being the best at finding the answer.”

UHY’s Gibson said his firm has used AI to bolster both its audit and risk management capacities. 

“By implementing AI-driven data analytics and automated reporting tools, we’ve streamlined audit processes, significantly reducing manual tasks and enhancing our ability to deliver deeper, real-time insights to clients. AI has also improved accuracy in risk assessment and predictive analysis, allowing us to proactively address potential issues before they arise,” he said. 

Mike Kempke, chief information officer at Top 10 firm Grant Thornton, pointed to his firm’s heavy AI investments in both client service and internal administrative areas. Given how many clients are using AI, he believes it’s imperative for firms to keep up. 

“At Grant Thornton we see AI as the way to enable growth and add more people to meet the increasing demands of our clients,” he said. “The adoption of AI is not optional; it is crucial for remaining competitive and ensuring the firm’s continued success.” 

From Apple Inc. to General Motors Co., corporate America is bracing for tens of billions of dollars in damages from Trump’s trade war — and that’s before most affected goods have landed.

Among U.S. companies that have disclosed financial projections so far, GM sees a $5 billion hit this year, while Apple expects $900 million in higher costs in the current quarter. Nvidia is taking a $5.5 billion charge to account for new export controls.

President Donald Trump’s administration imposed across-the-board tariffs on most imports and targeted some countries and industries for additional levies. Duties are as high as 145% on many Chinese imports, and Beijing retaliated with import taxes of 125% on American goods. Foreign-made steel and aluminum also face a 25% US tariff.

The preemptive warnings from these and other blue chips may vastly underestimate the overall hit to bottom lines. Many companies have yet to provide guidance, with some taking a wait-and-see approach. Others have foreshadowed the pain by widening expense ranges, pulling their full-year outlooks or warning price hikes will erode consumer demand. 

Meta Platforms Inc., for instance, lifted its capital spending projection for the year by as much as $7 billion, blaming the change in part on higher-than-expected costs for globally sourced equipment. 

“There’s just a lot of uncertainty around this given the ongoing trade discussions,” Susan Li, chief financial officer of the owner of Facebook and Instagram, said on a call with analysts. 

The word “uncertainty” has become a go-to descriptor for many executives during quarterly financial results calls. The u-word has cropped up more than 6,000 times so far in those corporate calls this season — the most since the early days of the pandemic in mid-2020.

Dozens of companies have yet to report their latest earnings and answer analyst questions about the blow from tariffs, including Nvidia, Oracle Corp., Home Depot Inc. and Walmart Inc. Some industries, such as online advertising, will likely be impacted later in the year, and only if businesses cut their budgets to offset ongoing elevated costs or lower consumer demand.

Corporate managers are responding in a multitude of ways, including making attempts to shift production out of China and front load material orders ahead of anticipated price hikes. 

Microsoft Corp. said sales of its Windows software and other products rose faster than expected as customers stocked up on inventory. Amazon.com Inc. accelerated some inventory purchases in the first quarter ahead of anticipated tariffs. Combined with unrelated costs associated with customer returns, the move lowered its profitability during the first quarter by roughly $1 billion.

“Obviously, none of us knows exactly where tariffs will settle or when,” Andy Jassy, Amazon’s chief executive officer, told analysts on a conference call.

Import models

GM, which imports vehicles from South Korea, Canada and Mexico, is among the biggest losers so far in Corporate America. The Detroit-based company and other carmakers are among the hardest hit, with a 25% duty on most imported vehicles. Separate duties on imported parts also are taking a toll on vehicles built at US auto plants.

Rival Ford Motor Co., which domestically produces 80% of the cars it sells in the US, said May 5 that it sees the duties reducing earnings before interest and taxes by about $1.5 billion this year. And motorcycle maker Harley-Davidson Inc. estimates tariffs could cost it as much as $175 million this year.

It’s not just American carmakers. Japan’s Toyota Motor Corp. said Thursday that US tariffs will cut its operating income by $1.3 billion in just the first two months since April 2, which Trump called his trade “Liberation Day.“

Other manufacturers are similarly feeling the pinch on profits from tariffs. Procter & Gamble Co. estimated current and proposed levies could add $1 billion to $1.5 billion to its annual costs. The consumer goods giant plans to counter that in part by raising prices on its products.

“It’s not immaterial,” P&G CFO Andre Schulten said on an April 24 earnings call with analysts.

Stanley Black & Decker Inc., which makes power tools and lawn mowers, estimated a gross tariff impact of $1.7 billion on an annualized basis. Even with supply-chain tweaks and price increases to lessen the blow, the company still expects a roughly 15% haircut to its earnings this year. That’s assuming that sticker shock doesn’t curb demand beyond the point at which the company can contain the damage through cost cuts.

“Price increases will be necessary in the U.S. market due to the current tariffs, and we have implemented a substantial increase in April,” Stanley CEO Donald Allan told analysts on an April 30 conference call. He added the company has “notified our customers that further price action is likely required if existing tariffs stay at current levels.”

Industrial impact

Aerospace and defense giant RTX Corp. said April 22 it’s bracing for an $850 million blow to operating profits, even with mitigation efforts. Honeywell International Inc., GE HealthCare Technologies Inc. and GE Aerospace each project a 2025 hit from tariffs on the order of $500 million before accounting for supply-chain changes and price increases.

Boeing Co. expects tariffs to increase its manufacturing costs by less than $500 million annually, including a 10% duty assessed on large components of its 787 Dreamliner that are made in Japan and Italy. The fallout could worsen if the European Union joins China in imposing reciprocal tariffs that make Boeing’s planes prohibitively expensive for local buyers.

3M Co. told investors April 22 that tariffs would cost it as much as $850 million a year — but only if it took no steps to blunt the impact. The diversified industrial product manufacturer said planned countermeasures will cut its earnings exposure this year to less than half that amount.

Danaher Corp., which makes life sciences and diagnostics equipment, told analysts on a April 22 call that a projected $350 million tariff hit will likely come down as it takes steps to offset the damage, such as adding surcharges and relocating manufacturing. And chemicals giant Dupont de Nemours Inc. is taking measures to reduce estimated tariff costs of $500 million down to $60 million, or about 10 cents a share. 

“Our teams have been carefully analyzing ongoing global supply-chain dynamics, engaging with our customer and supplier base, and actively working on a number of tariff mitigation actions, including production shifts, sourcing alternatives, surcharges, and product exemptions,” CEO Lori Koch told analysts on a May 2 earnings call.

Passing along costs

GE Vernova Inc., the energy business that GE spun off last year, expects tariffs to add as much as $400 million in costs this year. The company plans to counteract that impact by leaning on inflation-protection provisions and change-of-law clauses in contracts to pass on some of the cost of tariffs to customers, while also cutting expenses and reorganizing its supply chain to lessen its dependence on China.

Medical instrument specialist Thermo Fisher Scientific Inc. and Johnson & Johnson each said they expect to lose $400 million to tariffs in 2025. Another drugmaker, Merck & Co., said tariffs will cost it $200 million this year.

Even food companies are getting dinged by the import duties. Hershey Co. said it sees $15 million to $20 million of tariff-driven costs in the second quarter. But as cocoa inventories wane, the chocolate- and candy-maker said it expects duties to drive up costs by as much as $100 million in both the third and fourth quarter before accounting for offsetting actions.