{"id":118144,"date":"2023-10-12t01:00:18","date_gmt":"2023-10-12t05:00:18","guid":{"rendered":"\/\/www.g005e.com\/?p=118144"},"modified":"2024-08-27t17:00:59","modified_gmt":"2024-08-27t21:00:59","slug":"rosenberg-map-partner-incomes-surge-11-4","status":"publish","type":"post","link":"\/\/www.g005e.com\/2023\/10\/12\/rosenberg-map-partner-incomes-surge-11-4\/","title":{"rendered":"rosenberg map: partner incomes surge 11.4%"},"content":{"rendered":"

on revenue gains of 11.8%<\/strong><\/p>\n

\"\"<\/p>\n

by charles hylan<\/strong>
\nrosenberg map survey\u00a0<\/a><\/em><\/p>\n

it\u2019s been another amazing year for the accounting profession! but \u2013 it comes at a price. as we look at the firms in our survey with revenue greater than $2 million, income per partner was up 11.8%, and revenue was up 11.4%.<\/p>\n

more in surveys & research:<\/strong>\u00a0firms rev up expansion plans<\/a>\u00a0|\u00a0overcoming the five hurdles to advisory services<\/a>\u00a0|\u00a0research: accounting pros cautiously optimistic about generative ai<\/a>\u00a0|\u00a0why compliance still matters. but it\u2019s not enough.<\/a>\u00a0|\u00a0\u00a0new businesses mean new business<\/a>\u00a0|\u00a0how to transform your team into trusted advisors<\/a><\/p>\n

\"goprocpa.com\"exclusively for pro members.\u00a0<\/strong>log in here<\/a>\u00a0or\u00a02022世界杯足球排名 today<\/a>.<\/p><\/blockquote>\n

this is the second year in which profits grew faster than revenue.<\/p>\n

this new revenue and additional profits are occurring amidst a severe staffing shortage, resulting in people being stretched to their limits.<\/p>\n

so, how do we keep this going at less of a \u201cprice tag?\u201d<\/p>\n

doing nothing is not an option, and hope is not a strategy.<\/p>\n

our profession is experiencing unprecedented pressure from the economy, staffing shortages, technology, and competition.<\/p>\n

\"\"the list below is nothing new. however, these activities are ramping up in a major way, so we are starting to track new metrics.<\/p>\n

outsourcing\/offshoring\/onshoring<\/strong>: these initiatives continue to grow, and from our experience, they yield tremendous results, including easing some of the staffing issues. that\u2019s not to say that everything is running smoothly, and firms aren\u2019t having to climb over significant learning roadblocks. this is the first year in many where we gathered data in this area. clearly, many firms are engaging in outsourcing\/offshoring\/onshoring initiatives and best of all, the vast majority plan to continue or increase their activities. as we look at firms with over $10m in revenue, more than 50% engage in outsourcing activity and nearly 70% plan to do more next year. of those not outsourcing, 50% plan to start next year.<\/p>\n

client culling<\/strong>: in the face of staffing shortages, firms got serious about trimming their non-ideal clients. additionally, firms are paying closer attention to their client acceptance policies. given the amount of organic growth in the profession and the staffing shortage, it makes sense to cull clients that don\u2019t fit the firm\u2019s ideal to ease the workload and make room for more attractive engagements. looking at firms >$10m, 51% are actively culling clients, while 45% of firms between $2m and $10m are unloading clients.<\/p>\n

technology<\/strong>: firms investing in technology are certainly reaping the benefits. gaining efficiencies through technology is great, but firms are using it to provide advisory services, digitizing all areas of workflow, and virtual collaboration. pay close attention to what our colleague roman kepczyk says in the consultants\u2019 comments. specifically, \u201cthe introduction of generative ai (chatgpt); which most accountants were not even aware of until after busy season created the most significant \u201cbuzz\u201d i\u2019ve seen in my career. while easy to address ai early on as \u201chype,\u201d the speed at which usage has evolved and at which accounting vendors were jumping on board to integrate ai capabilities has been stunning.\u201d<\/p>\n

non-accounting hires<\/strong>: there aren\u2019t enough cpas, soon-to-be cpas, and accounting grads to handle the existing (and growing) workload. as firms move towards more advisory services, they are realizing a lot of the work doesn\u2019t have to be completed by an accounting grad. this has increased the number of firms hiring staff from diverse\u00a0backgrounds. the more our profession embraces this practice and creates training and processes to support non-accounting hires, the more we can ease the staffing burden.<\/p>\n

advisory services<\/strong>: firms investing in advisory services, private equity investing into firms in hopes of growing advisory services, and the overall arguments of why our profession should continue growing advisory services continue to pick up momentum. even looking at the name of our survey, we\u2019ve realized there may be a need for a change from simply \u201cnational survey of cpa firm statistics\u201d to something broader. nearly 10% of our participants have more than 50% of their revenue driven by non-compliance-related activities.<\/p>\n

finally, as our profession evolves, so must our metrics. here are just two examples:<\/p>\n

net firm billing rate<\/strong>: the net firm billing rate is derived by dividing net fees <\/em>by total firm charge hours<\/em>. however, this metric is becoming less relevant as more firms hire people who bring in and\/or manage revenue without charge hours. for example, a firm has a wealth management arm that employs an advisor who doesn\u2019t track charge hours, while a firm with the same revenue doesn\u2019t have a similar position. the first firm will have a higher net firm bill rate simply because of the math. in this example, the net firm billing rate will yield limited insight for firm leadership. as you digest this year\u2019s survey, please be careful when looking at any metric that involves chargeable hours.<\/p>\n

net fees per person<\/strong>: net fees per person are on the other side of the spectrum. this metric is tremendously insightful for firm leadership. as the profession\u2019s revenue mix changes over the years and firms deploy team members differently, net fees per person are one way to track leverage and ultimately drive profitability. as a result of the staffing shortage, firms are doing everything they can to maximize the \u201chighest and best use\u201d of each of their people, causing the lines to blur between professional and administrative staff. tracking net fees per fte has always been valuable; as our profession evolves, it will become even more important.<\/p>\n

while these are some trying times in our profession, i believe there are exciting opportunities ahead for firms.<\/p>\n

elite firm analysis<\/strong><\/span><\/h3>\n

for the survey, elite firms were defined as firms with income per partner over\u00a0$750,000. this year, 22% of firms hit the $750,000 mark.<\/p>\n

below are key observations regarding the differences between elite firms and mainstream firms:<\/p>\n