« Four Critical Budgeting Steps Your Not-for-Profit May be Forgetting | Main | The Public Interest: Client Confidentiality Versus Disclosure of an Illegal Act »

5 Reasons Your Firm Needs Benchmarking Data


BenchmarkingRunning a CPA firm offers many satisfactions and more than a few challenges. It also involves asking yourself a lot of difficult questions - Are we on the right path to meet our short- and long-term goals? Are we competitive in our marketplace? Are we positioned to find the staff we need? When it comes to decision making—whether on day-to-day issues or long-term strategic planning—it’s a lot easier to find answers for those questions when you know how firms like your own are handling similar concerns. The PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey offers the solutions you need, and its benefits are available to US and Canadian Public Accounting firms of all sizes. I encourage you to participate today. The CPA profession’s premier benchmarking study, it provides key metrics broken down by firm size and region that will help you understand where you stand in relation to your peers. Here are five ways your firm will benefit from the survey’s benchmarking data.  

Find out how other firms are performing. You may know you’re doing well, but there’s no way of estimating, for example, how your growth in overall revenues compares with those of other firms of the same size. Similarly, you may have improved your utilization and realization rates over time—or be trying to—but would you do anything differently if you could see how your rates stack up against those of other practices? Once you see the comparison side-by-side, you may decide to set new goals for any number of key performance indicators. On the other hand, the data may confirm that you’re on the right course, which can give you confidence in the way your firm is operating. 

Compare your firm’s profitability to peer firm averages. The MAP survey breaks down net client fees per owner for firms of all sizes, and offers details on net remaining per owner and owner compensation. The 2014 survey results indicated that firms were focusing on sustainability by setting aside cash for the future rather than taking it out of the practice. The 2016 results will offer new insights into what direction the data has been heading, and give you a big-picture view of what compensation trends may indicate about firms’ current practice management decisions.

Understand your realization and productivity compared to other firms. What are the average billing rates for firms in your region providing similar services? The 2014 survey found little change in billing rates from the previous study, in 2012. In a strengthening economy, that could mean there are opportunities to remind clients about the value that your firm provides and perhaps increase your fees. The survey also examines changes in hourly vs. value billing, so you can monitor trends and consider which options are best for you. 

Understand what staffing needs are to take the firm to the next level. Talent is a precious commodity in a CPA firm. Use the survey to compare your compensation rates against those at every position level and by firm size. You can also find out which benefits are the most popular and how other firms are handling the millennial generation’s desire for greater flexibility. If you’re concerned about turnover, the survey will tell you whether you’re facing a higher or lower rate than other firms like yours.

Get up to speed on technology trends. Ever wonder if you’re behind the curve in embracing new technologies? Whether you’re considering a client portal, using Skype to communicate with clients or staff, or offering remote online access, the survey can tell you if you’re on the cutting edge or at the back of the pack.

Whether you want to drive your firm to the next level or identify new approaches and efficiencies that can improve current profitability, the benchmarking data in the MAP Survey can help you achieve your goals. If you’ve never participated in the survey, you have until July 15 to sign-up. All users have until July 31 to complete data entry. Depending on firm size, it can take one to three hours to complete, but the information and benchmarking will provide benefits long after you click “Submit”. Find out what insights it can offer to your firm.  

Mark Koziel, Vice President- Firm Services & Global Alliances, American Institute of CPAs.

Benchmarking photo courtesy of Shutterstock

Comments

Comments are moderated. Please review our Comment Policy before posting.
comments powered by Disqus

Subscribe

Subscribe in a reader

Enter your Email:
Preview