CPA firms continue to experience strong growth, with 76 percent reporting an increase in firm size last year, according to benchmark data in the 2006 National Management of an Accounting Practice Survey.Despite that growth, the recently-released survey also confirmed that succession planning remains a stumbling block for many firms facing the imminent retirement of the Baby Boomer generation. The survey found that only 24 percent of firms have a succession plan and only 7 percent of firms have partner-in-training programs.
Of the 2,000 CPA firms that responded to the survey, one-quarter experienced growth between 10 percent and 19 percent in the last year. Just less than 18 percent fell in the 6-to-9 percent growth
Range, while less than 10 percent of firms decreased in size. That's a stronger showing than in the 2004 survey,
Among 2006’s top performers, the growth rate was most pronounced among firms with $1 million to $1.99 million in revenues -- in which 40 percent grew between 10 percent and 19 percent. The smallest firms in that group also did well, with 20 percent of those with revenues under $150,000 experiencing growth between 10 percent and 19 percent.
The survey also found that compared to 2004, average partner compensation jumped 16 percent, to $185,892, and that the average billing rate for partners was up 5 percent, to $168.
Merger activity also decreased. In 2004, 15 percent of firms said that they had grown by merger, while in 2006, that figure dropped to less than 8 percent.
The National MAP Survey, conducted since 2002, is a joint survey run by the Private Companies Practice Section of the American Institute of CPAs and the Texas Society of CPAs.
More details, and additional benchmarking data, are available in a free 10-page analysis available at www.aicpa.org/pcps. PCPS firms can download the entire results as a member benefit, while non-PCPS firms can purchase a copy of the national report.
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