KPMG leaders urged to return to profitability fundamentals

The sharper message from ENGAGE 2026 was not about the next tool or the next acronym. It was about margin pressure forcing firms back to basics: utilization, pricing discipline, scope control, and collections. For KPMG partners and managers, that is less a conference takeaway than a reminder that profitability still lives in the details of how work is sold, staffed, delivered, and paid for.

AI may be the headline, but profit is still the homework

Bill Pirolli used his 10th straight appearance with “Driving Firm Profitability” to make a point that sounded almost contrarian in an AI-heavy market: technology should be the first place leaders look when an opportunity or challenge appears, but it does not replace market discipline. His argument lands because the audience is no longer just senior partners listening for theory. Younger professionals are moving into leadership roles, and the room is increasingly full of people who have to think like operators as well as technicians.

That matters at KPMG, where the pressure on audit, tax, and advisory teams is not abstract. Leaders have to know the client mix they are carrying, the competitors they are facing, and the economics of each engagement. Transparency with staff is part of the equation too, because firms do not improve margin by hiding the numbers from the people who schedule the work, price the jobs, or absorb the overruns.

The conference context made the message harder to ignore

ENGAGE 2026 ran in Las Vegas from June 8-11 at the ARIA Resort & Casino, with a theme of “The Next Wave.” AICPA and CIMA describe it as their premier annual event and say it draws thousands of attendees, which helps explain why a session about profitability fundamentals still gets a packed room. The conference also featured keynote speakers Clara Shih, Richard Galanti, and Ryan Reynolds, a lineup that underscored how broad the event has become beyond pure technical accounting content.

The recognition piece mattered too. On June 10, the AICPA honored seven CPAs at the conference, reinforcing the idea that ENGAGE is not only about technical updates but also about leadership, visibility, and professional status. Pirolli’s own background gives the session weight: he joined The Succession Institute in 2023 and previously served as AICPA chair, so his message carries the credibility of someone who has lived both governance and firm-management pressure.

What the seven drivers really mean inside a firm

AICPA conference materials describe Pirolli’s session as covering seven drivers of profitability, including client selection and dismissal, billing and collection, building client leverage, avoiding scope creep, and more. That is not a list for a slide deck, it is a map of where margin leaks begin. In practice, it says a firm can be busy and still be badly run if the wrong clients, the wrong scope, or the wrong billing habits are allowed to persist.

For KPMG professionals, the lesson is especially relevant because the firm’s work is built around constrained time, review layers, and client expectations that can change faster than the budget. When a leader accepts a low-margin client, underprices a proposal, or lets an engagement expand without a change order, the problem often shows up later in realization, write-downs, and collections. Those are the habits that turn a strong delivery team into a profitable one, or prevent that from happening.

The four operating habits leaders can change this quarter

The most useful part of Pirolli’s framework is how immediately it can be translated into managerial action.

• Tighten client selection and do not defend every account by inertia. The most profitable firms know which clients fit their model and which ones consume too much partner time, too much manager rework, or too much exception handling for too little return.

• Rebuild pricing discipline before the next round of proposals. When the market gets harder, leaders are tempted to buy revenue with discounting, but that usually creates a second problem in delivery. Strong pricing starts with a clearer view of what the work actually costs to staff and supervise.

• Treat scope control as a daily management task, not a contract clause. Scope creep is where good intentions become margin erosion, especially in consulting and advisory work where a small extra ask can become unpaid labor if nobody resets the terms early.

• Make collections part of the client relationship, not an afterthought for finance. Billing and collection only improve when partners, managers, and client teams know which accounts are aging, which invoices are contested, and where payment timing is becoming a pattern.

Those moves are practical because they sit inside the authority of a partner or manager. They do not require a new organizational chart. They require sharper review of account profitability, more willingness to push back on weak economics, and better communication with teams about what profitable delivery actually looks like.

Why the technology numbers support the back-to-basics message

KPMG’s 2026 Annual US Technology Survey makes the same point from a different angle. U.S. firms reported average annual digital technology spend of $190 million, above the global average of $174 million, and average financial returns of $293 million in the past 12 months, compared with a global average of $265 million. On paper, that sounds like a strong technology story. The catch is that only 10% of U.S. firms described their implementations as fully scaled and continually evolving, while 56% said the cost of fixing technical debt was blocking new technology investment.

That is why the profitability message lands now. Firms are spending heavily, but many are still trapped between pilot projects and old systems that slow down the promise of new tools. The real edge belongs to leaders who can use technology to reduce friction without surrendering judgment, and who understand that the best AI strategy still depends on disciplined pricing, clean scope, and fast collections.

For KPMG, the next wave is not just about adopting new systems. It is about making sure the firm can still recognize a profitable engagement when it sees one, staff it correctly, control it tightly, and get paid without apology.