Understanding how your firm measures up to a national benchmark is a powerful tool to grow your practice. Firms maximize their potential when they know how other firms operate.
About The Rosenberg Survey
For nearly 20 years, The Rosenberg Survey has collected data on a number of key performance indicators to help firms understand best practices, financial benchmarks, and industry trends.
Accounting Today calls The Rosenberg Survey the “industry’s barometer for CPA firm practice management.” Aside from providing statistics not covered in other surveys, the methodology ensures a concise review of today’s firms.
This year, nearly 350 firms participated, and 80 percent of them participated last year as well. This is meaningful because the year-to-year comparisons show better correspondence changes over time than firms who do not participate as often.
What We Learned
Overall, the findings tell us that it is a good time to be a CPA firm. Though a number of disruptions lie on the horizon, CPA firms can position themselves for further success.
The Top 10 findings include:
- Revenue continues to grow, but this year’s growth rate was slightly lower than last year’s (7.8 percent versus 8.1 percent).
- 26 percent of firms’ revenue growth was from mergers.
- Income-per-partner was 6 percent higher than last year–the highest increase in profitability since 2007.
- Both the average age of partners and the percentage of partners older than 50 decreased. As older partners retire and younger partners replace them, this trend will continue.
- In multi-partner firms, female equity partners increased across most firm revenue categories (except those with revenues less than $2 million).
- Firms with the smallest attest practices (the lowest 25%) outperformed those with a higher percentage by 12 percent.
- Leverage and rates drive profitability, and this year’s survey proves that to be true.
- For the first time in 10 years, income-per-partner growth (6 percent) is catching up with the growth in fees (8 percent).
- 94 firms achieved more than $500,000 in income-per-partner versus 79 last year. This is significant as we have a smaller population of firms reporting due to the amount of merger and acquisitions.
- 90 percent of the firms that do not offer financial services say it is not likely they will begin offering them in the next 12 months.
What’s Next
As encouraging as these findings are, disruptions are coming. In order to remain relevant, CPAs must position themselves as thought leaders, consultants, and advisors. Technology is rapidly developing in such a way that will automate or replace the A&A and tax services CPAs have historically performed. CPAs must establish and maintain solid relationships with their most valuable contacts to ensure growth.
See how ABLE can help your firm continue to grow and rise above the disruptions ahead, schedule a no-obligation demo.