Dynamic Firm Benchmarking: the New MAP Survey Platform in Action
Have you ever performed an in-depth comparison of your firm’s standing against other firms of the same size? The 2014 PCPS/TSCPA National Management of an Accounting Practice Survey provides some new and valuable ways to assess where your firm stands and plot your future course. If you participated in the survey this year but haven’t really delved into the results, which became available in November, you definitely want to check them out. Thanks to a new online platform, it’s much easier to take a peek at how firms like yours operate. And even if you didn’t participate, the survey offers some valuable information that will help your firm plan.
Take the case of a single owner firm like mine. We have a boutique corporate tax practice. In addition to myself, our permanent staff includes one CPA and one CPA candidate, but we add an administrative person and per diem help in busy season. When I’m planning for the future, I often wonder what a top performance single-owner firm looks like, but it’s tough to find more than anecdotal information.
While the MAP survey data has always been a great resource for practitioners, a new platform this year makes it much easier to microslice the results, filtering them various ways and focusing on your peer group. In addition, the survey offers access to objective data on how the top performers are running their firms, serving clients, spending money or handling staffing—in your own size segment and others.
With the new MAP survey website, you can answer your most important questions with a couple of clicks. You can see if some firms are doing better in critical areas such as realization or leverage. If you’re thinking about growing your firm, you can check out the results and approaches of practices larger than your own.
In this year’s survey, for example, I learned that while the 811 single-owner firms included in the MAP survey generate median revenue of $330,000 and median profit of $143,000, the top 60 single-owner firms generate median revenue of $1.5 million and median profits of just under $500,000. It’s true that only one in more than a dozen single-owner firms hit the big numbers, but having a sense of what’s possible makes a huge difference when you’re thinking about how big you can be.
Finding the Roadmap for Success
It’s great to know what’s possible for your firm, but charting the route that will take you there is even better. Say, for example, that you want to double the size of your firm. The next and obvious question is “how,” and the new MAP survey offers some answers. You can scroll up through size segments, seeing what services a firm might add as it expands. You can follow how a firm’s technology use and choices alter as it grows, whether billing rates change and at what points a firm might add staff, say, or improve realization. You can track the necessary steps to move to the next level. In short, the new MAP survey helps PCPS members map a clear route to wherever they want to go.
One final high-level point: The MAP survey has provided wonderful richness and granularity for years, and it goes even further this year. For example, while in the past we’ve gotten average values broken down into categories based on size and region, now we get that same data but with 25th percentile, 50th percentile (median) and 75th percentile values reported. Detailed reporting should make your benchmarking opportunities that much more valuable.
And another example: While in the past, the MAP results have included useful tabulations of the ways firms use technology, this year’s survey ramps things up. You can get very detailed tabulations of highly filtered data about, for example, which tax software program and research library products firms like yours use, whether you really need a blog or a portal at your size, and more.
In short, the results blew me away. They will help me recognize changes I need to make and how to differentiate myself from the rest of the pack. I’ve been looking for data like this for a decade.
Stephen L. Nelson, CPA. Stephen is a sole practitioner in Redmond, Washington, and the author of QuickBooks for Dummies and Quicken for Dummies, among other books.
Person reviewing data image via Shutterstock