2008 MAP Survey Results: CPA firms’ most powerful benchmarking tool
Results are in for the 2008 MAP Survey, brought to you by the Texas Society and the AICPA Private Company Practice Section. CPA firms continue to do well – maintaining high levels of income and billing rates that were reported in the 2006 survey. The survey and the current state of the economy do, however, raise questions about the future landscape for CPA firms.
The following provides a look at some of the key findings in the survey nationally and in Ohio. For a complete look the results, use one of the links below.
Browse survey results by the area of most interest to you.
In Ohio, 134 firms participated in this year’s survey – 45 small, 50 medium and 39 large. Of the Ohio firms participating, 75% said they experienced growth during the last year, with largest growth coming for large firms – 38% experienced growth of 6-9%.
While the 2008 and 2006 growth numbers are remarkably consistent, they are more robust than those found in the 2004 Survey. Firms were still experiencing tremendous growth between 2004 and 2006 in the wake of the Sarbanes-Oxley Act and the new regulations and requirements associated with it. Firms in 2008 appear to be enjoying continued demand for their services.
The figures cited above reflect the overall averages, but not all firms follow the same trends. Among the smallest firms in 2008 – those with the gross fees of less than $150,000 – 16% of firms had either no change or even decreased. However, a large number of firms (13%) experienced growth of 50% or more.
In examining how Ohio firms allocate their dollars, it’s not surprising to find that most go to professional salaries (excluding owners), accounting for about 24% of income (or net client fees). In considering all salaries (excluding owners), roughly 33% of firms’ income was spent on salaries. The next highest single expense – office rent and other occupancy costs – represented 5.2% of total income.
This number represents the amount that partners can take out of the firm. It is not net income per owner, since it may include outlays for benefits, retirement or other items that would vary in each firm. Nevertheless, it does provide a view of what is available to partners once other expenses have been paid.
Across all firms, the net remaining per owner averaged $195,695 in Ohio. The net remaining per owner for the larger firms in Ohio was the largest – with $264,129.
As finding and retaining quality staff remains a major concern for all firms, the question then becomes – what are firms paying their staff? Among all firms, the average compensation for directors was $91,999, up 18% from $77,641 in 2006. In Ohio, the average director’s compensation was $82,333.
More salary averages include:
- Managers national average was $71,986; Ohio average was $65,671
- Senior associates national average was $55,249; Ohio average was $46,384
- Associates national average was $42,213; Ohio average was $38,260
- New hires national average was $31,042; Ohio average was $33,103
Firms of all sizes and across the country have been struggling for several years to find and retain qualified staff members. The 2008 Survey numbers bear out that fact. An average of 31.3% reported having lost professionals in fiscal 2007. That’s actually good news, though, because it is a steep drop from the 45.6% of firms that had lost professionals in 2006. On the average, Ohio firms fared better – with only 25% losing staff last year. The large firms did, however, take the brunt of that hit, with 64% losing staff last year.
Policies for time off vary. Nationally and in Ohio, firms provide 52% paid sick time. Paid vacation time nationally averaged 64% and jumped slightly to 71% for firms in Ohio. This is another area where policies clearly vary depending on firm size. With only 44% smaller firms in Ohio providing paid vacation time, the survey found that medium and large firms provide 86% and 82% respectively. This could present an opportunity for smaller firms to recruit and retain quality staff by offering benefits that compete with the larger firms.
The PCPS Top Talent Study revealed that the highest-quality professionals are interested in firms that will help them advance in their careers and offer them an attractive traditional benefit package. Following that line of priorities, the 2008 MAP survey found that the five most common benefits offered by all firms were:
- Payment for continuing education courses
- Professional dues payment
- Professional license fees reimbursement
- Health insurance
- Retirement plans
The MAP survey is a unique tool designed to offer practitioners unparalleled insights into how well smaller firms are doing and how they run their businesses. It is both a benchmarking tool and market research for smaller CPA firms. In the November issue of Practice Management, we will take a look at client services.
LAST UPDATED 10/23/2008