A Look at CPA Firm Performance Trends

Source: The Marc Rosenberg Blog

The following includes excerpts, reproduced with permission, from a blog entry by Marc Rosenberg.

CPA firms once again held their own as the sluggish economy continues. But the year was nothing to write home about. Those statements best describe 2011 for U.S. accounting firms, as reported in the 14th annual Rosenberg MAP Survey.

Revenue rose 3.8 percent in 2011, an improvement from the 1.7 percent increase last year. Revenues were up for firms in all size ranges, though firms with annual fees in excess of $20 million experienced a higher growth rate (6.5 percent) than smaller firms.

Profits, as measured by income per partner, averaged $366,000, compared to $360,000 for the prior year.

Firms are projecting 4.0 percent growth for 2012, as we are seeing more signs that firms are reinvesting in the future. Mergers are expected to continue hot and heavy this year and for the foreseeable future.

Noteworthy findings from our survey:

• 2011 was the first year since the onset of the recession that firmwide charge hours increased from the prior year.
• For the first time in the profession's history, more firms used the compensation committee than formulas to allocate income. Up until last year, though comp committees were the favored choice of firms with eight or more partners, on an overall basis, more firms used formulas simply because there are more smaller firms than larger firms.
• The percentage of partners over age 50 spiked from 61 percent last year to 64 percent this year.
• Our "Bigger is Better" analysis continues to show a direct correlation between higher revenues and higher profitability.
• There was a slight but noteworthy increase in the percentage of female partners -- 15 percent in 2011, up from 14.2 percent in the prior year.

For the complete post, read "Sneak Peek: Results of 2012 Rosenberg MAP Survey."

From The Marc Rosenberg Blog, October 9, 2012, http://blog.rosenbergassoc.com/.