Benchmarking is Key in Successful Practice Management 

by Victor Amaya, CPA 

Since ClearPath Accountants was founded six years ago, we have been dedicated to providing the highest level of proactive advisory services. One component of our services involves helping clients benchmark themselves against peers in their industry to identify where their business is performing well and what areas need more focus. Benchmarking is a critical aspect of business development and we feel that it is important for the success of our firm to go through this same process. We are constantly showing our clients how to beat or meet the benchmarks that their peers have set, so why wouldn’t we do the same for ourselves? Our firm’s primary benchmarking tool is the AICPA PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey.

Why We Participate in the MAP Survey

Our firm regularly participates in the MAP survey, which occurs every other year. The MAP survey is a comprehensive way to collect data about all aspects of practice management, from staffing and benefits to in-depth financials. After completing the survey, we are able to compare our results by firm size, by region or nationwide. I pay particular attention to the regional reports as they are the most applicable for specific financial data, however I do look at all reports in order to get a clear picture of how our firm is performing across the profession.

My role within our firm includes firm administration responsibilities, so I typically gather and enter our survey data myself. Some parts of the survey require a little math, as it will sometimes ask for numbers in a different way than we have recorded in our books. However, the time investment to complete the survey should not deter firms from participating because I feel that the value we get from the results far outweighs the extra effort. If we are able to ensure the firm is on track for success and proactively address any problem areas to avoid getting overwhelmed with the management of our practice, then we can truly focus our attention on providing quality advisory services for our clients.

How We Plan to Use Our Results

After completing the survey, we analyze the results to see where our firm has discrepancies in performance compared to our peers. Sometimes, we know where these differences originate. For example, our firm generally spends more on technology than other firms our size but we are committed to investing in this area of our practice, so this difference doesn’t concern us. However if we see an unexpected discrepancy, we work to figure out the rationale for the difference and create an action plan to fix it.

This year, we are really looking at our revenue per employee and partner compensation. Last year was different for our firm in that we were fully staffed all year, so I’m interested to see these numbers. We are mainly looking at two things in this area: how much of our compensation ends up at the partner level and if our billing rates are in line compared across the profession. We are hoping to get a clear sense of the profitability of the firm and if we are on pace for success.
 
Benchmarking is an essential part of effectively managing your firm. I would encourage other firms to take the time to participate in the MAP survey. It is a valuable tool that can help ensure that you are making the right decisions for your firm and putting yourself on the right track for success in the future.

ClearPath Accountants, LLC is a small firm with offices in Denver, CO and Fort Collins, CO. Victor Amaya, CPA is a partner. Sign up here before July 15 to participate in the 2016 MAP Survey.



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