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FIRM PRACTICE MANAGEMENT

‘Top-performing firms The top five sources of revenue are shown in
the table “Service Fees as a Percentage of Total
clearly leverage staff to Revenue.” The full results are available to survey
participants and PCPS members at the AICPA
website.
maximize profit while The evidence that individual tax work makes up
a smaller percentage of top performers’ business is
expanding client services that for firms that charge fees per tax form, those
fees represent a much larger percentage of total
revenue for all firms (30.6%) vs. top performers
beyond traditional (23.8%). In what may be a surprise to some, top

performers that bill hourly see those fees account
compliance work.’ for 75% of their revenue, higher than the median
of 70% reported by all firms that bill hourly. The
pattern is reversed with value pricing, as value pric-
ing accounts for a median 22% of all revenue for all
Carl Peterson, CPA, CGMA, vice president–Small Firm Interests for firms that do value billing, as opposed to 18.5% for
AICPA & CIMA top-performing firms.

OTHER MEASURES OF NOTE
Top-performing firms provide higher compensa- While top performers are not as progressive as all
tion at all levels, though the difference is much larger firms on some aspects of billing, they do boast a
for owners and equity partners than for other posi- higher median percentage of staff working remote-
tions (as shown in the table “Average Compensation ly (50% vs. 30%). Top performers also are more
per Position”). likely to be adding staff, with more than three-
quarters of those firms saying that they would hire
TYPES OF SERVICES more employees in 2021, compared with more than
The MAP survey found that the types of services 50% of all firms. As a group, more than 80% of all
performed were not dramatically different between firms have purchased cyber liability insurance. The
top performers and all firms, at least when measur- percentage tops 90% for top performers.
ing fees for each service as a percentage of net client As for COVID-19-specific services, such as
fees (for firms offering the service). By that metric, but not limited to advising on Paycheck Protec-
top-performing firms are less reliant on individual tax tion Program (PPP) calculations and forgiveness,
services than all firms, with individual tax planning the median fees earned by all firms was $20,000,
and compliance accounting for a median 23.8% of compared with $50,000 for top performers.
total net client fees at top performers offering those
services, compared with 30.6% for all respondents. Top To comment on this article or to suggest an idea
performers produce a slightly higher percentage of their for another article, contact Jeff Drew at
revenue from audit and business taxes than all firms. Jeff.Drew@aicpa-cima.com or 919-402-4056. ■

Service fees as a percentage of total revenue

Service fees as a % of net client fees (for firms 2021 median all respondents 2021 median top performers
offering the service)
Tax — individual compliance and planning for 30.6% 23.8%
compliance service fees
Tax — business compliance and planning service 24.0% 25.4%
fees
Audit and attest service fees 14.8% 16.1%
Client accounting advisory service fees 12.0% 11.3%
Review, compilation, and preparation service fees 8.0% 6.9%

18 | Journal of Accountancy February 2022