Page 68 - JoFA_2022

FIRM PRACTICE MANAGEMENT

Revenue, profitability, and performance

Net client fees (revenue) 2021 median all respondents 2021 median top performers
Total net client fees $876,614 $3,334,824
Net client fees earned — prior fiscal year $867,000 $3,241,808
Net client fees per partner/owner $556,654 $1,247,930
Net client fees per FTE professional $164,000 $ 214,244
% change in net client fees from prior year 4.17% 6.52%

Net remaining per partner/owner (profit) 2021 median all respondents 2021 median top performers
Net remaining per partner/owner $207,604 $490,082
Net remaining for partners/owners as % of net 38.9% 41.4%
client fees

Ratios and expenses 2021 median all respondents 2021 median top performers
Firm realization % 97.0% 93.5%
Utilization % — firmwide 62.3% 64.6%

Number of years in business

2021 median all firms 2021 median top performers
Less than one year 1% -
1 to 5 years 9% 4%
6 to 10 years 8% 5%
11 to 20 years 18% 13%
21 or more years 63% 78%

nine CPAs and three equity owners, it is still three have more than double the total firm operations
times bigger than the median of three CPAs and staff with a median of 7.6 FTEs, compared with
one equity owner for all firms. Top performers also 3.5 for all firms.
The larger staff size reduces the difference in
revenue between top performers and all firms when
measured by net client fees per FTE professional
AICPA RESOURCE (as shown in the table “Revenue, Profitability, and
Performance”).
Article As for longevity, while 63% of all firms have

“Ways to Keep Your Talented CPAs,” JofA, April 8, 2019 been in business 21 or more years, that number
rises to 78% among top performers. In contrast,

IN BRIEF ■ Top performers are less dependent less on rent than the typical firm.
than the typical firm on individual tax ■ Top performers have a higher
■ Top-performing firms were defined as services. percentage of staff working remotely
the top 25% for per partner net income ■ Top performers spend a higher and are more likely to be hiring.
among MAP Survey respondents. percentage of income on salaries and

16 | Journal of Accountancy February 2022