How does your state rate? For the nationwide year-to-year trends, see the earlier CPA Trendlines report, “Bookkeeping Rates Show Broad Advances.” New data from Intuit’s biennial bookkeeping rates survey is showing huge disparities from region to region and city to suburb. The highest rates, for instance, can be found for “general business consulting” in the East Coast and Atlantic states, at $138 per hour.
Preliminary results show downward pressure on rates and fees as much as 12% in some areas. CPA Trendlines is working with Intuit to track the trends. “This is the first time we’ve seen downward pressure since 2005 when we started this survey,” says Bill Teague at Intuit. “We see the pressures on all hourly rates and even some fixed fees.” In some cases, Teague says, the average rate is lower even if the mode – the price point used by the majority of respondents – remains the same. Early results for hourly bookkeeping show the mode holding at $50, but the average dropping from $64 two years ago to $56. Results from prior-year surveys are available for viewing: here for [...]
It depends… Top billing rates average $319 for partners at firms grossing over $10 million a year, according to the latest AICPA/PCPS MAP survey, down to $115 per hour for partners at firms grossing les than $200,000 a year. The same spread holds through all sizes for firms and all ranks of employee. But does size equal quality? The lockstep pattern of pricing based on rank and size suggests the profession still has a long way to go bury the billable hour and embrace intelligent pricing strategies. The same study shows net remaining per owner in 2010 averaged $273,140, up from $245,103 in 2008. On the other hand, fees per partner advanced, from $659,375 in 2008 to $798,951 in 2010, [...]
The one mistake too many CPA firms are making. Michelle Golden, marketing consultant and author of the new and essential “Social Media Strategies for Professionals and Their Firms,” explains the one simple mistake that many firms make when entering a niche or building out a specialty practice. They are leaving loads of money on the table, she says.
After several years of intense pricing pressure, 83% of CPA firm decision-makers say they plan to increase book rates next year. And the best firms are planning the most aggressive price hikes. About 70% of all firms plan to raise book rates 1% to 5%, according to the latest edition of IOMA Partner’s report (subscribe here). Another 13% are planning rate increases of more than 5%. Only 16% say they won’t raise prices next year. About half have already increased book rates this year, with 44% holding the line and 7% actually cutting rates. “Is it reason to celebrate? Maybe,” writes editor Jess Scheer. “But we suggest holding off on popping the champagne just yet.” Realization rates remain dismal. Yet [...]
(What recession?) The surprising thing about AOMAR’s CPA Firm Practice Management Survey 2010 is that there were so few surprises. The study turned up very few significant changes between 2009 and 2010. Of course, it’s possible that the major metrics could lag a year and show up in next year’s survey. Or, it could mean that firms have been more resilient than many would care to boast about. One good sign you can’t ignore: Net income per partner increased by over 16 percent. (What recession?) 2010 2009 Leverage 6.6 6.8 Utilization 1,164 1,108 Billing Rate $135 $132 Realization 91.3% 92.1% Profit Margin 36.5% 34.8% Net Income Per Partner $330,723 $283,364 Leverage = Total personnel ÷ total number of equity owners. [...]
Like many CPAs across the nation, firms in Toledo, Ohio, are reporting continued collection problems. And now, on top of that, many small firms are getting competition from larger firms moving down-market at cut-rate prices “Business has been good, but everything is getting stretched out,” said Chuck Mira, a partner in Mira + Kolena in Toledo, Ohio. “Cash is backed up through the system. “We would like to see national banks open up credit lines.” J. Clarke Price, president of the Ohio Society of CPAs, said, “I have heard around the state that 30-day clients went to 60 days or even 90. “Collection is more of an issue, and some clients are saying, ‘You’ve got to work with me on [...]
Why you can’t afford that difficult client — and what to do about it. by Rick Telberg At Large Invoices that are paid late or not at all, phone calls on Christmas day to calculate year-end numbers, unrealistic demands and even fraud… Most every accountant has their own story of clients who are more than just difficult. Let’s face it. We love our clients. That’s why most accountants are in the business. But some clients are just, honestly, nightmares. Accountants have a name for them. They are the clients from hell. Difficult clients are a problem to firms of all sizes. To be sure, small firms can be most vulnerable to one or two difficult clients. Larger firms generally have [...]
Billing rates at CPA firms remain high, evidence that the marketplace continues to be strong for CPA firm services. Despite the economic change and uncertainty that has affected U.S. businesses this year, the value of CPA CPA firmsâ€™ services is holding steady, according to the latest issue of Accounting Office Management & Adminstration Report (subscribe here, 12 issues $469/year).