The CPA industry posted revenue growth of 7 percent for 2004 and income per partner rose to $268,000, up 9 percent from 2003, according to the seventh annual Rosenberg Associates MAP Survey of nearly 250 CPA firms.
The survey focuses on midsized firms, with the majority of the 249 participating firms generating annual net fees between $2 million and $5 million.
Continuing a trend from recent years, the survey found a large gap in the performance levels among firms from top to bottom. More than a quarter of firms experienced revenue growth of more than 10 percent, while a third of firms saw growth below 4 percent.
And while only 4 percent of firms in the survey reported "meaningful revenues" from Section 404 work, the survey theorizes that the larger national firms swamped with Sarbanes-Oxley work are letting go of smaller companies' business.
After years of erosion, the survey found that billable hours of professional staff were up by 22 hours, to 1,528 hours this year. The figure was as high as 1,622 in 1999.
"There are two major reasons for this increase," said the survey's founder, Marc Rosenberg, in a statement. "First, the number couldn't go much lower. Second, the increased amount of work, coupled with the shortage of staff, gave firms and their staff little choice but to improve their productivity."
Other results from the survey included:
- Only 6 percent of firms expect to outsource a significant amount of tax returns in 2006.
- About 10 percent of firms reported "meaningful" levels of income from financial advisory services.
- The average buy-out multiple paid to retiring partners was 80 percent of fees.
- The average price paid to purchase small practices held steady at 100 percent of fees.
- Nearly half of the partners at firms are over the age of 50.
The complete Rosenberg MAP Survey can be purchased for $250. More information is available at www.rosenbergassoc.com.
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