INSIDE Public Accounting (IPA) has announced its 17th annual report on the nation's largest accounting firms. IPA describes the report as one of the most accurate, comprehensive and detailed of its kind. This annual report is the longest-running analysis of accounting firms' operations and management, and is considered by many to be the gold standard in accounting firm benchmarking.
IPA's 2007 top 100 firms on average grew net fees by 15.04 percent for fiscal year 06-07, a dizzying three-year run of more than 15 percent growth each year that has not been seen in the history of the IPA Top 100. Seventy-four of the IPA Top 100 firms report double-digit growth and 23 of those firms report growth over 20 percent.
The cut-off point to be included in the elite list also is growing quickly: Revenue at the 100th-largest firm in the 2007 IPA Top 100 was $25.5 million, compared to $19.9 million for the 100th-largest firm just two years ago (2005).
"The fundamentals for the profession are strong - client demand for services is at an all-time high, and value for CPA services is being recognized now more than ever," says Michael Platt, consultant and publisher of IPA. "Whether these changes represent a seismic shift in the basic infrastructure of the profession or just a cyclical 'good run' still remains to be seen."
What's the definition of "the good life?" To be an IPA Top 100 firm in the West. Seven of the top 10 fastest-growing IPA Top 100 firms are located in California and Colorado, with growth rates above 30 percent. Net Income for these firms is way up - an average of 38 percent - more than twice the growth rate of their peers in the IPA Top 100, with average partner compensation in these seven firms 45 percent higher than their peers on the list.
Partners reap the rewards of ownership
During the past seven years, IPA Top 100 Partner Charge Hours have dropped almost 8 percent, from an average of 1,187 per year in the beginning of the decade to 1,094 in 2006-2007. During that same period, IPA Top 100 average partner compensation has risen more than 50 percent, from $305,000 in 2001 to $461,272 in 2006-2007. Net fees per charge hour (realized average billing rate) have risen over 35 percent in those same seven years, with an average $161.31 per hour for IPA 100 firms this year.
You can view the Top 100 Firms list.
INSIDE Public Accounting, formerly Bowman's Accounting Report, founded in 1987, is published by The Platt Consulting Group. It reports and analyzes the news, trends, strategies and politics that affect the nation's public accounting firms, providing them with the information and resources they need to compete and operate more profitably. Call (317) 733-1920 or e-mail firstname.lastname@example.org for complete copies of the IPA Top 100 Firm issue (20-pages), reprint information, subscriptions, and pricing.