Rosenberg Associates Blog
Marc Rosenberg, CPAIf you asked the president of a Fortune 500 company or the owner of a small business to define profitability, a quick and easy response would follow. Not so with CPA firms. One would think that the undisputed champions of measuring financial data – CPAs – would be capable of defining their own firms’ profitability. …
Question from a reader: We reference your survey a lot when we discuss becoming a high-performance firm. We are a $10M firm with 9 partners. The firm has done little to market our audit services, generally using the audit department as a loss-leader, never promoting it or looking to grow it aggressively. We’ve never even…
This was the 17th year of The Rosenberg Survey. Nearly 400 CPA firms participated from coast to coast, from both large and small population markets. Each year we analyze the results to identify key indicators that help us better understand CPA industry trends. Here are the top 10 findings from the 2015 survey (reporting on…
I was recently asked: “Have profit margins, as measured by equity partner profits as a percent of revenue, been declining at firms over the last 10 years or so? Albert Einstein said “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes…
I’ve been spending a lot of time with firms recently on profitability, a topic that’s easy to get partners’ attention. The following profitability best practices have a major impact on the bottom line. Management and leadership. This is the first item on the list because it makes everything else possible. Adopt a corporate governance structure…
Sixteen years ago I discovered that public MAP surveys available in the CPA firm market weren’t very helpful in benchmarking CPA firms. So I created my own. It was one of the best decisions I ever made. CPA firms sometimes operate in a cocoon My favorite benchmarking story (true!) goes something like this: I ask…
To say that e-mail usage is ubiquitous would be an understatement. Partners routinely tell me that they send and receive/read hundreds of client emails a month. Email has got to make anyone’s short list of great productivity enhancers of the past 20 years (think how it could be even better without spam, but that’s a…
A reader whose firm traditionally measures admin expense as a percentage of revenue recently queried whether we could share any industry benchmarks along these lines. There are 3 metrics used for measuring admin expense: (a) Admin personnel as a percent of total headcount, (b) Overhead expenses as a percentage of revenue and (c) Overhead expenses…
Our recently published, 16th annual Rosenberg Survey reports an industry-wide growth in revenues of 6.7%, but a more modest 3.2% increase in income per partner (IPP), CPA firms’ oft-used barometer for firm profitability. At first glance, one might reasonably conclude that firms have been unable to fully translate revenue growth to the bottom line. But…
A pet peeve is a particular or recurring source of irritation. One of mine is CPA firms’ near total lack of interest in formally educating their staff on how their firm works: how it gets clients, how success is measured and how firms make profits. When the employees of any organization understand how they fit…
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