Sneak Peek: Results of 2012 Rosenberg MAP Survey

CPA firms once again held their own as the sluggish economy continues.  But the year was  nothing to write home about.  Those statements best describe 2011 for U.S. accounting firms, as reported in the 14^th annual Rosenberg MAP Survey.

Revenue rose 3.8% in 2011, an improvement from the 1.7% increase last year. Revenues were up for firms in all size ranges, though firms with annual fees in excess of $20 million experienced a higher growth rate (6.5%) than smaller firms.

Click here to purchase your copy of the 2012 Rosenberg Survey.

Profits, as measured by income per partner, averaged $366,000 compared to $360,000 for the prior year.   The improved growth rate coupled with continued vigilance in controlling expenses account for this modest improvement in profits.

Firms are projecting 4.0% growth for 2012 as we are seeing more signs that firms are reinvesting in the future.  Mergers are expected to continue hot and heavy this year and for the foreseeable future.

Noteworthy findings from our survey:

• 2011 was the first year since the onset of the recession that firmwide charge hours increased from the prior year.
• For the first time in the profession’s history, more firms used the compensation committee than formulas to allocate income.  Up until last year, though comp committees were the favored choice of firms with 8 or more partners, on an overall basis, more firms used formulas simply because there are more smaller firms than larger firms. 
• The percentage of partners over age 50 spiked up from 61% last year to 64% this year.  Sounds like there were a lot of 50^th birthday parties for partners!
• Our “Bigger is Better” analysis continues to show a direct correlation between higher revenues and higher profitability.  In past studies, this correlation weakened a bit when firms were in the $6-10M mark for annual fees.  We term this “hitting the wall.”  Simply put, there is a point in firms’ growth where they find that they need to stop managing their practice the same way they did when they were half the size.  A stronger commitment to management is needed.  The 2011 results have begun to show that this “wall” may be extending to slightly beyond the $10M mark.
• A slight but noteworthy increase in the percentage of female partners – 15.0% in 2011, up from 14.2% in the prior year.

Copies of The 14^th Annual Rosenberg Survey may be purchased at www.rosenbergsurvey.com