Portrait of an Exceptional Accounting Firm

Source: Inside Public Accounting

Inside Public Accounting's “2009 Best of the Best Accounting Firms” issue lists 50 firms whose performance excels in areas such as revenue growth, net income per partner, and average partner compensation. IPA also put together a composite profile of a top-performing firm. Following are excerpts, reproduced with permission.

The best of the best…

• Are more aggressive with their billing rates. Hourly rates for partners are 10 percent higher than the average for all non-national firms.
• Have more high-risk, high-reward practice mixes and niches, such as international tax, employee placement, personal business management, and risk management.
• Choose their practice areas deliberately. For example, the best firms are less likely to have transportation, credit union, bankruptcy, telecommunications, or governmental niches.
• Have a culture of going the extra mile. Partners generate 44 more chargeable hours and work about 100 hours more than their peers. Professional staff generates an extra 53 hours of chargeable time each year.
• Fully integrate training into their culture and systems. For example, they allocate 22 percent more dollars for training per professional than the average non-national firm.
• Document goals, plans, and requirements. Ninety-two percent have a written strategic plan, compared to 71 percent of all non-national firms.
• Know what is expected of the partner group and have an evaluation system in place. Seventy-six percent have clearly defined what it takes to become a partner and 84 percent have developed a formal partner code of conduct.
• Have built-in organizational structures to maximize profitability. For example, they are highly leveraged at 7.1 professionals per partner versus 5.5 for all non-national firms.
• Exceed the norm in overall benefits.
• Have partner retirement plans that are in better shape than those of their peers.
• Have partner compensation systems that reflect individual contributions and reward desired behavior.

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From Inside Public Accounting, October 2009, “A Composite Profile of the 2009 IPA Best of the Best,” The Platt Consulting Group, www.insidepublicaccounting.com. Subscription $409 per year; back issues – nonsubscribers $50. 317-733-1920.