By Jennifer L. Cryder, CPA, PICPA CEO

The economy is top-of-mind for businesses and individuals, so it is paramount that CPAs remain focused on the many different measures and forecasts so they can best serve their clients, companies, or organizations. To that end, the PICPA continues to provide updates during this turbulent summer so you are ready and able to provide sound advice when asked.

Inflation has been a pressing concern for months now. What started as a phenomenon seemingly arising as a ripple-effect of COVID-19 on the supply-chain has metastasized into a grim threat to the economy. The PICPA knew that concerns over inflation were rising, and in the summer 2022 Pennsylvania CPA Journal we tackled the issue in the feature “Inflation: What’s Behind It and What’s to Come” written by Nicholas Boyer of RKL LLP. In the article, Boyer discusses how CPAs, in both public accounting and industry, are well-positioned to collect, measure, and interpret the financial data needed to navigate a potentially long inflationary period.  

As inflation rises, the government’s primary weapon to combat it is through increases in interest rates by the Federal Reserve Bank. Some thought the Fed moved too slow in raising rates; others thought its recent increases were too much, too fast. To help you understand where the federal government stands, we offered a special, free, town hall for PICPA members on June 24 with Patrick Harker, president of the Federal Reserve Bank of Philadelphia. At this virtual town hall on economic conditions, Harker provided insight into economic forecasts, the causes for our current inflationary environment, and the Feds response. If you missed this invaluable town hall, PICPA members can watch a replay available on PICPA’s website. 

Despite assurances that the experts at the federal level are rooting through their toolbox to try and hammer the economy back into shape, fears of an upcoming recession are real and persistent. But fear is something you experience when you are unprepared. We have another town hall coming up to get you prepared so fear can be replaced by a reasoned plan of action. On July 28, the PICPA will host a town hall with Gene Marks, president of The Marks Group PC, on planning for a recession. Marks will discuss several important factors for your preparedness, including how to navigate a business through uncertain times and how potential actions by legislators could direct your financial choices. Most importantly, he will discuss how to remain profitable under the cloud of a recession. If you are a PICPA member, you do not want to miss this free town hall. If you are not a PICPA member, join today then register for the program as a free member benefit.

Finally, in these uncertain economic times, it is critical that you know what our leaders are doing that may affect your business and your clients, particularly on the state level. For example, just a few days before this blog posted Pennsylvania Gov. Tom Wolf and state lawmakers agreed to a new fiscal year budget that included a reduction in the corporate net income (CNI) tax rate by 1% to 8.99% beginning in January 2023, with 0.5% annual reductions thereafter until the rate reaches 4.99% in 2031. The reduction represents the first reduction in the state’s CNI tax rate in more than two decades – a significant legislative and political accomplishment. The PICPA has a robust advocacy presence in Harrisburg, where we keep a careful watch on proposed legislation, push for economic policies that will help Pennsylvanians thrive, and regularly meet with legislators and regulators to share concerns and educate them on the impacts of proposed remedies. You can get a weekly digest of our efforts and other happenings in the state capital by going to PICPA’s Legislative Update webpage and subscribing to the email so the latest updates come right to your inbox.

The PICPA knows that times of economic uncertainty cause anxiety and confusion. And that state of mind is not good for providing sound financial advice. Just know we at the PICPA are here for our members to provide them with the latest updates so they can succeed in helping others make sound financial decisions, and in turn growing their own businesses and reputations.

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