CPA Net Income Per Partner Surges 16%

(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.
  • Utilization = Chargeable hours of the firm ÷ total personnel.
  • Billing Rate = Standard fees ÷ firm chargeable hours.
  • Realization = Net fees ÷ standard fees.
  • Profit Margin = Net income ÷ net fees.
  • Net Income Per Partner (NIPP) = Leverage x utilization x billing rate x realization x profit margin.

Source: Accounting Office Management & Administration Report, February 2010. Subscribe here: subserve@ioma.com.