surveys & research

how cpa firms make money in turbulent times

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rosenberg survey uncovers the power of leverage.

by gary l. adamson
adamson advisory

the universal measure of profitability in accounting firms is average income per partner. another universal tool is the annual rosenberg national map survey. it’s a must-have for running your firm.

in the latest survey, rosenberg identifies his “elite” firms, which are the 54 that had income per partner of more than $500,000. not bad considering it is based on 2009 economic data—from the middle of the recession.

it’s interesting, if you dig into the data in the survey, you will find that these 54 aren’t just the biggest firms, although as rosenberg puts it, bigger is better in terms of profitability. in fact, 24 of them are in the $2-$10 million fee range and three are sole proprietors.

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rosenberg survey 2011: cpa firms on rebound

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at the typical cpa firm: “the bleeding has stopped.”

revenues at the typical cpa firm are up 1.7%, a slight improvement from the 1.4% increase in the year before, according to the 2011 rosenberg map survey.

still, when the impact of mergers is taken out, the growth rate was only 0.8%. the rosenberg map survey, founded 13 years ago by nationally known practice consultant marc rosenberg, reports on the results of 408 firms, most of which range from $2 million to $20 million in annual fees. nearly 100 metrics are collected and compared.

though the revenue increase is small, the authors say it’s noteworthy because — for the first time in two years — the growth rate increased from the prior year instead of decreasing. “the bleeding has stopped,” they say.

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