Best Numbers To Track CPA Firm Performance

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Best Numbers To Track CPA Firm Performance

Inspired by this article, let me tell you which data points CPA leaders should be monitoring to check how well their firms are doing. It’s an important exercise. It’s not just a tick box, but it can boost your value proposition as you try to secure new funding, attract the brightest people, or even position yourself for mergers and acquisitions.

From the start, I’ll say that I am viewing this data through an offshoring lens because offshoring can be a vital part of your strategy for enhancing your value proposition. You can control costs and ensure you have the people you need to deliver great work.

Here are just a few of the most powerful data points that CPA firm leaders should focus on when they want to train talent, promote leaders, add services, and complete transactions that they want to close.

  1. Average fee by service line. You should know the average price for each service you provide. We’ve all heard that you can only manage what you can measure, and knowing what you earn down to every line gives you valuable information on where you can squeeze productivity to earn more revenue.

  1.   Profit margin by service line.  Similarly, knowing your margins per line tells you immediately where you can get better. You will know the number you are comfortable with and through continuous improvement, you can even set goals to attain profit margins you never thought possible.

  1.   Achieved hourly rate. In the same vein, knowing your achieved hourly rate tells you if you can do more. Time management and workflow management software are great at breaking down these numbers so you know if you are maximizing your precious hours. Accsurant offers excellent workflow management tools by the way.

  1.   Revenue concentration. Where do you make most of your money? Which clients contribute the most to your bottom line? You should value all your clients, but they are not all equal. Some contribute to your earnings in small ways, but others keep the lights on.

  1.   Realization. This number tracks efficiency performance and can be used to assess whether your fees are pegged right. When calculating ROI, this is a great number to rely on.

Understanding these numbers is crucial to running a tighter ship and making the most of your team’s finite energy and hours. If you know these numbers like the back of your hand, you can use them powerfully in discussions with potential recruits and possible future funders or partners. 

If the numbers are not where you need them to be, one of the best ways to address this quickly is to look at offshoring to help you save costs while still doing great work.

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Yann Beaullan-Thong

Yann Beaullan-Thong

Yann is Accsurant’s president. With 20 years experience and six different technology startups behind him, Yann has a proven track record in developing innovative solutions based on his technology and financial acumen.