The results of the most recent AICPA survey indicated that many CPA firms experienced record profit growth and revenue over the past year. Accounting Today presented a summary of the results from the CPA industry’s largest benchmarking poll.
In good news for CPAs, the cost of employees continues to rise as a percentage of the company’s profits. This reflects the growing competition for talent. The survey also identified a strong preference for accountants who graduated with 150 credit hours, the minimum requirement for CPA licensure.
The AICPA conducts its survey every two years and examines seven defined CPA firm segments. These range from small firms with less than $200 K in annual revenue to large ones that make $10 million or more. Representatives from 1,537 CPA firms were surveyed for details about their financial results in the latest fiscal year.
Key findings include:
- The median growth rate for net client fees increased between 2014 and 2016 in every segment except for the $5-10 million revenue category.
- Revenue growth rates rose the most in firms with less than $200,000 revenue.
- These firms saw 10.5% median growth
- Firms in the $500 to $750 K range had growth rates with a median of 4.9%
The AICPA’s executive VP for firm services, Mark Koziel, was quoted as saying “the business of public accounting is strong.”
This survey also found that practice innovation is increasing. While firms overwhelmingly continue hourly billing, they are experimenting more with fixed or value pricing. Small to midsized practices were most likely to experiment in this manner.