Profitability, Accountability & Efficiency

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The Keys to Profitability, Accountability & Efficiency Changing How the Work Gets Done

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Keys to Profitability Profession wide issues Firm staffing & operation Individual accountability & efficiency  

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PCPS Top IssuesPartner accountability/unity Bringing in new clients Retention of current clients Fee Pressure/Pricing of services Developing a succession plan  Source: AICPA 2011

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Challenges of the ProfessionDemographics Technology Value & Relevance  

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AICPA Demographics  Source: AICPA 2009

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AICPA Demographics  

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Current Demographics  CPAsNon-CPAsMenWomenWomenMen

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Firm of the Future  CPAsNon CPAs

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TechnologyOwnership Strategic partners Process driven Unintended consequences  

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“And we missed it.” Samuel J. Palmisano, Chairman of the Board, IBM  

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Relevance & ValueReliable information Financial statements Quality Value Better Decisions Current information Positive outcomes Cost savings  

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National Survey2010 Career Development Survey INSIDE Public Accounting Over 1800 responses Well being & work research  

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Average Profit Margins  © INSIDE Public Accounting 2011 Used with permission

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Pricing and MarginsPricing trends Have not kept up with expenses Realization issues (Real %?) More fixed fees Client expectations not always managed  

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Firm Staffing & OperationsPersonnel Costs Passive management Realization/efficiency Utilization Processes & procedures  

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Salary & Benefit CostsAverage personnel costs as a percentage of net revenues 2007 44.7%* 2008 45.4% * 2009 46.8% * 2010 46.4 %* 2011 45.1%* Many firms now 50%+  * © INSIDE Public Accounting 2011 Used with permission

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Salary Trends  © INSIDE Public Accounting 2011 Used with permission

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Average Pay per Professional  © INSIDE Public Accounting 2011 Used with permission

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5 Year Trends  © INSIDE Public Accounting 2011 Used with permission

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False Reporting  Over 60%!

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Salary StrategyReverse upward delegation Unintended consequences Don’t allow people to work below their level Higher level personnel must leverage Utilization levels need to increase  

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What tasks are you doing that you shouldn’t be doing?Scanning Admin duties Setting up files Making copies Inputting 1099s Typing letters Write up work Payroll reportsChasing client info Data entry Data imports Filing PDF docs Ordering supplies Deliveries Filing Bank reconciliations  

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Firm of the Future  CPAs CoreNon-CPAs Non-Core

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Passive Management & Client ServiceAfter the fact monitoring Charge time/Budgets Accountability/Profitability Credit & A/R Inefficient processes & systems Reactive client service  

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Active ManagementContinuous budgeting and reporting Partner & staff accountability plans Manage Margins Leverage Scheduling/utilization  

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Client ExpectationsManage client expectations about fees Better engagement letters Bilateral Time sensitive Stop quoting fee ranges  

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Last Updated: 8th March 2018

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