CPA Firms Cope with Flat and Lower Revenues

Eighty percent of CPA firms reported either a decline in revenue, no growth, or modest growth between May 2008 and June 2010, according to a new survey by the American Institute of CPAs and the Texas Society of CPAs.

The survey of more than 2,900 CPA firms found that firms are making partners more accountable for revenue and the bottom line, making many firms “leaner and meaner,” and helping the firms eke out profits despite the economic downturn.

“Flat is the new up,” said AICPA vice president of small firm interests James C. Metzler. “CPA firms really sharpened their pencils and carefully managed their expenses, so while revenues were flat, CPA firms still came out ahead on profits.”

CPA firms participating in the survey provided information on their billing rates, expenses, revenue, realization, service offerings, staffing, marketing and benefits. The report delineates the data by region and firm size to allow CPAs to evaluate their management decisions and financial results, such as revenue per partner, revenue per employee, and other key measurements, against comparable firms.

The National Management of Accounting Practice survey is conducted every two years by the AICPA’s Private Companies Practice Section and the Texas Society of CPAs, and is sponsored by Aon Insurance Services. The Private Companies Practice Section is a community of AICPA firms committed to making CPAs and their firms more successful through education and advocacy. It draws on the strength of more than 6,900 local and regional CPA firms and includes more than 83,000 CPAs from across the U.S.

Forty-four state CPA societies and the Association for Accounting Administration also helped ensure a strong response to the survey, allowing each state society to obtain a report of state and local results. In the last national biennial MAP survey, conducted in 2008, more than 2,700 firms had participated.

“The next challenge for CPA firms will be how to maintain or increase that profitability,” noted Metzler. “Firms have managed expenses so closely the past two years that bottom line growth will have to come from new lines of service such as cloud computing and higher-value consulting and advice.”

PCPS firms may download the 2010 National MAP Survey results report for free as a member benefit via the PCPS web site. AICPA members may purchase the report for $200, while the general public may purchase it for $300.

For more information, visit www.aicpa.org/pcps.

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