As a successful firm leader, you are constantly on the lookout for new insight to help manage your practice more efficiently and profitably.
- What are the latest trends in managing a successful accounting practice?
- How does your firm stack up against others?
- In what areas is your firm doing well?
- What areas need recalibration?
- What new opportunities should you consider in 2019?
This month’s Feature Focus examines the recently released findings from the 2018 PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey. Inside this article you will gain a clear perspective of how your firm aligns with others in several key areas. You can also learn how to put this new information to work inside your practice as you look to achieve continued success.
Bird’s eye view
This year’s survey reveals the profession is strong and well positioned for the future. A closer look shows firms are experiencing solid gains in growth and staff retention. There is also a rise in the use of fixed fees and value pricing and value billing. What’s more, firms are making wise investments that position them for the future. Three standout investments include the preparation and admission of new partners to replace retiring leaders, new technology and staff training.
Key trends to explore
Let’s delve into several trends and Key Performance Indicators (KPIs) in this year’s survey. They provide critical insight and clues to help position your firm going forward.
This is a poplar one for leaders because it demonstrates the firm’s ability to advance and prosper. One important finding from the 2018 MAP Survey reveals growth is up in firms of all sizes. In fact, the median growth rate of all participating firms was 4.2%. This is positive news in today’s increasingly competitive environment. How does this compare to your firm’s growth? Does it align with growth in the primary areas of your practice? Which sectors of your practice are experiencing the greatest growth? As you benchmark your firm, zero in on what has led to your growth.
Once you have determined how your firm stacks up, turn your attention toward positioning the practice to carry on its positive strides. Address the question, “What do we need to do to continue our firm’s growth?” A good place to start is to review your current growth strategies and consider new ones that align with market needs and conditions. One factor to take into account is the sweeping tax laws and accounting standards that are expected to contribute to growth across the profession in the coming years. Proactive firms will make great advances during this time when they tap into their trusted advisor skills to assist clients with the complexities of new regulations along with those of the dynamic marketplace. Successful firms will also look beyond these opportunities and position their practices for long term growth. This will involve building independent revenue streams based upon how the firm can bring value to its clients. Be mindful your firm’s unique value is likely not the same as other firms, so embrace these differences because they make up the firm’s competitive advantage.
To help your firm with its growth initiatives, there are a number of tools you can access for free as a PCPS member.
Pricing and billing
You have likely been involved in a number of conversations about pricing and billing protocols over the past few years. The 2018 MAP Survey sheds new light on how the profession is handling these two critical functions. One of the most significant outcomes shows firms of all sizes are increasing the use of value pricing and value billing and fixed pricing. As a result, the use of hourly pricing is declining. How do these findings compare with your firm? Has your firm made the switch away from hourly pricing?
Looking to 2019, savvy practitioners will capitalize on the opportunity to embrace value and fixed pricing. Today’s clients appreciate the insight you and your colleagues provide to them rather than the time you spend working on their engagements. Successful firms will also recognize the value of their specialized services and take proactive steps to adjust pricing as they assist clients with demands from the Tax Cuts and Jobs Act (“TCJA”), new accounting standards and the ever-changing business environment.
To help your firm with its pricing and billing strategies, there are a number of tools that PCPS members can put to work right away.
Staff retention and new leader preparation
As an effective leader, turnover has likely been on your mind for some time. This year’s survey results provide good news that staff retention is trending upward. What’s behind this positive development? Firms have made fundamental changes to keep staff in place, such as flexible schedules, work habits and more modern dress policies, to name a few. Another strategic area firms have committed to is the preparation of new leaders. A significant conclusion from this year’s survey shows a growing number of firms are making investments in the training and admission of new partners to replace retiring ones.
Looking toward 2019, staffing and the need for well-prepared new leaders will continue to challenge the profession. Dividends will come to practices that can adjust business models and adapt leadership styles for the shifting values of today’s workforce. This includes continuous improvements in flexibility and work habits. Effective leaders will also benefit from increased communication with team members and efforts to build inclusive cultures. Successful firms will reap long term benefits by investing earlier in new partner development and on-ramping to prepare emerging leaders for the dramatic shift that will take place in their roles. Key skills needed include leadership, business development, client service and communication.
There are a number of tools and resources you can tap into to help your firm with these areas. Even better, these tools are free to PCPS members.
Access the 2018 MAP Survey
PCPS members and survey participants can access the 2018 PCPS/CPA.com National Management of an Accounting Practice (MAP) Survey results at aicpa.org/mapsurvey. If you are not yet a member of PCPS and would like to become one, you can easily do so by emailing PCPS@aicpa.org or calling 1.800.CPA.FIRM. The price of membership, only $35 per CPA, is more than matched by the thousands of dollars in member benefits and discounts.
Here’s to your continued success!