Accounting firms experienced a median growth rate of 9.1% in net revenue in fiscal year 2022, according to a new survey, over double the 4.2% growth rate of fiscal year 2020.
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Average revenue, or net client fees, also grew over the same period, from $876,614 in fiscal year 2020 to $1,088,840 in fiscal year 2022. Average compensation for various types of positions within the CPA profession grew between 5% and 14% in fiscal year 2022, compared to fiscal year 2020.
Accounting firms have been raising salaries to try to fill the many job openings, but they're still not matching the starting salaries offered in some other professions. While the average base salary for new entrants to the profession increased $5,000 to $50,000 in fiscal year 2022, that amount still lags behind comparable pay in other fields such as engineering.
The survey also asked about value pricing and subscription-based services at accounting firms, as opposed to the more traditional hourly billing model. The use of value pricing by firms, such as subscription-based services, continues to rise in the profession. Hourly billing as a share of revenue declined from 70% to 65% since fiscal year 2020, even as median hourly billing rates grew 16%, from $137 in fiscal year 2020 to $159 in FY 2022.
Firms are making changes to try to attract more staff and attract new clients.
"Our data shows accounting practices taking steps to improve entry-level pay and firm culture, with some firms, for example, reducing chargeable billing hours for their staffs," said Lisa Simpson, AICPA vice president of firm services, in a statement Wednesday. "We're also seeing strong revenue growth in service areas beyond traditional tax and audit areas, such as client advisory services and business valuation. A sharper focus on business model transformation continues to make the profession more attractive as a career."
The survey polled 1,117 firms. Here are some of the main statistics in the report:
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