the causative difference? look at the amount of work delegated downward.
by 卡塔尔世界杯常规比赛时间 research
the aicpa’s 2023 national management of an accounting practice (map) survey has detected some of what distinguishes firms that stand out as top performers.
the survey defines top performers as the top 25 percent of firms based on net remaining per partner.
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what makes a cpa firm a top performer? in a nutshell, more:
- more leverage of partner expertise
- more culling of clients
- more cpas in the firm
- more equity owners in the firm
- more outsourced work
- more operations staff
the survey, conducted may-july 2023 and asking about 2022, measures medians, not averages. median net client fee is $1,088,840. net remaining per partner/owner is $225,725.
among all respondents, the median number of owners in the firm is two while top performers have three.
a far bigger differential is found in the number of cpas in a firm – a median of three versus nine for top-performing firms.
there is also a dramatic difference in median partner compensation. while the overall median is $183,855, partners at top firms are pulling down $450,600. and though the gap in net remaining per partner was equally vast – $225,725 vs. $578,278 – the difference in net remaining as a percent of net client fees was pretty close, 37.4 percent vs. 38.5 percent.
utilization medians for all firms versus top performers were pretty close for upper management positions – directors, managers and associates. but gaps widened at lower salary levels, demonstrating greater use of non-cpas to free up time for more skilled professionals.
notice the spread at lower salaries. median utilizations of the lower echelon for all respondents and top performers, are, respectively,
- new professionals (<1 year): 57.7 vs 61.1 percent
- paraprofessionals: 50.4 vs. 61.6 percent
- interns: 39.9 vs. 53.4 percent
- professional subcontractors: 50.2 vs. 60.1 percent
at all positions, hourly billing rates are significantly higher for top performers, with the least difference among the least experienced. directors with more than 11 years of experience, for example, bill a median of $240 per hour while top performers bill $300. among managers (6-7 years), the spread was $180 vs. $197.
among all respondents, paraprofessionals are billed at a median of $100 while top performers charge $113.55. the difference for interns is $85 vs. $90.
the biggest spread, in absolute numbers as well as percentages, was among equity partners and owners, billing $250 an hour overall vs. $343.66 for top performers.
the differences
the survey identifies the causative difference as a firm’s leverage ratio – the number of billable professionals divided by the number of equity partners. in other words, the amount of work delegated downward. the median leverage rate for all firms is 1.6 percent. the median rate among top performers is 5.5 percent.
in absolute numbers, top performers have a median of 10 full-time operations employees, compared with just 3.5 for all firms. the more robust staffing allows top performers to spend more time with clients and offer more value-added services.
top performers are also more likely to cull problematic or unproductive clients. while 62 percent of all firms currently cull clients, 73 percent of top performers do. going forward, 90 percent of top performers plan to do so, compared to 82 percent of all firms.
top performers also find efficiency in outsourcing. half of them do so domestically, and 52 percent use or plan to use offshore workers. that compares to 40 and 34 percent for all firms, respectively.
conclusion: it’s the leverage, stupid. investment in staff and outsourcers yields time at the top, time for the high skills that cpas perform best.