INSIDE Public Accounting's 17th annual National Benchmarking Report has been released, covering management, operational and financial performance for FYE 2006/2007. The purpose of the IPA National Benchmarking Report is to assist firms in measuring their performance against their peers, to establish a benchmark against which to compare future statistics and to help identify areas where firms may be able to take action to improve their individual performance.
An analysis of 225 CPA firms across the U.S. confirms another banner year for the profession. "Double digit growth graced the profession for the third year in a row," says Michael Platt, principal with the Platt Consulting Group which publishes the Report. "The cylinders are firing on all fronts in many firms – top line revenue is up, bottom line revenue is up, and partner compensation is way up," Platt confirms. "We also found that staff pay increases are lagging behind, and partner retirement obligations continue to grow," adds Platt. "These are definitely areas that we are watching as leading indicators with strong financial implications for firms that don't address the issues."
Key findings of the report:
- For the third straight year, the average CPA firm in our survey forged ahead with strong double-digit net fee growth – an average of 14.7% across all non-national firms.
- CPA firms in 2006-2007 enjoyed a healthy growth in net income, with non-national firms up 14.3% over 2005-2006
- Net fees per partner saw another 7.5% jump from last year, with non-national firms reporting an average of $1,269,331 managed per partner.
- Partner compensation continues to rise steadily:
- Average compensation, all partners $389,237 (up 10.2% over last year)
- Average compensation, equity partners $444,259 (up 11.0% over last year)
- Average compensation, new partners $186,215 (up 7.5% over last year)
- Staff pay increased at half the rate of partner compensation increases
- The percent of net fees obligated to partner retirement payments continued its upward climb this year to another record – an average of 3.3% for all non-national firms, up almost 25% from last year.
- Average hours worked per partner also dropped, to 2,344 compared to 2,404 last year – a decrease of 2.5%.
If you are interested in obtaining a copy of the Executive Summary of the Report, please contact INSIDE Public Accounting at (317) 733-1920, or you can order the entire 130+ page report at http://www.plattgroupllc.com/benchmark.html
About the IPA National Benchmarking Report
The 2007 IPA Benchmarking Report (based on fiscal year 2006-07 data) contains information representing more than 16,200 partners and 187,000 total staff. The accounting firms that participated in this year's study represent an aggregate of $39.5 billion in net fees.
The Report includes over 130 pages of information and over 50 pages of detailed information such as, Fees and Income, Billing Rates, Partner Level Workloads, Mergers, Salaries, Expenses and much more. The report also includes a detailed analysis of the trends for 2006-2007, the Top 100 accounting firms in the Nation, the Best Managed Firms in the Nation and much more.