Tax Law and News CPA Firms Show Increase in Fee Revenues Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Bryan Cytron Modified Mar 6, 2019 2 min read Most CPA firms reported modest increases in revenue in 2013, with a stable or brightening profit picture, according to a recent survey by the AICPA and Texas Society of CPAs. Every CPA firm segment – from the smallest practices with less than $200,000 in revenue to the largest with more than $10 million – saw growth in net client fees from 2012 to 2013, ranging from four to eight percent, the National Management of an Accounting Practice (MAP) Survey found. Growth rates for fees have not rebounded to the pre-recession levels in the 2008 survey, but there has been steady if uneven improvement during the past four years. The MAP Survey, the profession’s largest benchmarking poll on practice management topics, is conducted every two years. One bellwether of a firm’s profitability is a category called “net remaining for owner,” which measures revenue minus expenses before partner-related compensation is factored in. The 2014 survey results are largely in line with 2012 in this category, based on percentages of net client fees across seven different firm-size segments. But where the 2012 survey showed an uptick in owner compensation, this year’s survey suggests a pullback. One explanation: Owners are building up equity in the business to give themselves options going forward. “We’re seeing many firms take conservative steps to ensure the sustainability of their organizations,” said Mark Koziel, CPA, CGMA, the AICPA’s vice president of firm services and global alliances. “They’re plowing money back into the firm or reserving it for future use rather than doling out every penny in profit to owners and partners. Succession planning, budgeting for new hires, merger strategy and hedging against uncertainty all play a factor in this kind of decision-making.” Professional salaries—the largest category of expense for CPA firms– increased 6.9 percent from 2012 for the smallest practices, and stand at just over 16 percent of net client fees. Firms with revenues between $200,000 and $750,000 recognized smaller increases in this category, while professional salaries expense remained flat for firms with revenues of $750,000 and up. This category excludes owners. Methodology: The AICPA PCPS/TSCPA National Management of an Accounting Practice Survey is conducted every two years by the AICPA’s Private Companies Practice Section and the Texas Society of Certified Public Accountants. For 2014, representatives from almost 1,750 CPA firms were asked details about their latest fiscal year financial results. Responses were gathered from May through August this year. The poll’s main sponsor is Aon. Previous Post October 2015 Tax and Compliance Deadlines Next Post Health Insurance Mandate for Employers Written by Bryan Cytron Bryan Cytron is vice president of Cytron and Company. He helps businesses and firms tell their story, build their brand, and grow through top-notch PR, marketing, media relations and communications. This includes websites, blogs, newsletters, social media and more, with a niche in accounting and financial services. More from Bryan Cytron Comments are closed. Browse Related Articles Tax Law and News Consultant Spotlight: John Trammell Practice Management Why you should care about green cloud computing Practice Management Consultant spotlight: Steven G. Advisory Services Understanding your client’s relationship with mon… Practice Management Consultant spotlight: Jonathan Lovitt Practice Management ProConnect™ Tax spotlight: Megan Leesley, CPA Tax Law and News Boo! Extension season horror stories Tax Law and News Tax relief for victims of Hurricane Milton Practice Management Tax Season Readiness virtual conference—Nov. 13-14 Practice Management Lacerte® Tax spotlight: Tania Santos, EA