The AICPA recently released the results of its biennial PCPS/CPA.com National MAP Survey, which serves as a snapshot of practice management for fiscal year 2017. These five major themes emerged:
Practice managers also are seeing the value of more robust technological offerings and continue to invest heavily in the areas of data management and cybersecurity, specifically purchasing cyber liability insurance.
The 2018 benchmarking report – the largest of its kind in the country – offers a review of responding firms’ KPIS and financials for a comprehensive look at the industry. This year’s survey was redesigned, making it easier for firms to participate and resulting in increased survey responses.
Ohio firms also are growing, but at a rate of 3.7%, a bit below the national median. But, per the survey report, “firm growth is up in practices across all revenue bands … The greatest growth from the prior year was reported in firms with fees from $10+ million at a rate of 6.6%.”
When it comes to value billing, “firms that leverage that status to deepen their relationships with clients and move beyond compliance and into advisory will be well positioned to value their services at their worth, not at simply the number of hours incurred.”
Indeed, Joe Woodard of Woodard Events said accountants should focus less on hours worked and more on the value they're delivering.
“People who bill by the hour still end up value pricing because they have to write down the invoices when the customer doesn’t agree with the price,” Woodard said in a recent episode of Accounting Today’s podcast. “Except they don’t get the inverse – the client never calls and says, ‘Wow that really was more valuable to me than your hour total, so let’s add more to that.’ It’s always penalizing, never rewarding.”
In addition to billing, recruitment and retention remain top challenges for firms. Large firms increased their billing rates substantially for first-year professionals in 2017, per the report, a sign they are competing for new graduates by offering higher salaries. Flexible environments that are conducive to collaboration and inclusion are key as firms continue to navigate multiple generations in the workplace.
Firm leaders also should focus on strengthening their organization’s culture and improving communication with team members. Other recommendations, based on the survey results, include using workflow tools, preparing young professionals for partnership, initiating and continuing marketing and business development initiatives, and leveraging staff to better manage client relationships.
In 2016, the survey revealed that firms were showing solid gains in revenue and profitability, diversifying services, incorporating a greater mix of billing protocols and exploring diverse strategies for growth.
To see the full executive summary and download results, visit aicpa.org/mapsurvey.