$1M profit per partner

Most CPA’s make nothing close to $1M profit per partner. Most are in the $200K – $400K range. I personally think that is waaayyyy to low. For the risk you take, for how smart you are and the value you add I think you’re worth >$1M profit per partner. But you have to believe it…

Increase profits by working less

Increase profits by working less! There is not an Accounting firm on the planet that I have met in 22 years coaching firms that does not want to increase profits by working less.. Many of the firms we have worked with over the years are achieving more than $1M profit per partner whilst delivering 500…

Pricing Accounting Services

The problem with pricing by the hour is that the assumption is that the price per hour is correct (often calculated by a salary multiple) and the time to do the task was correct. The assumption is that time multiplied by the rate equals the correct price. In my view, nothing could be further from…

Revenue Profit & Cash in an Accounting firm – video # 13 – People to Partner ratio

To increase profits per partner you have 4 key strategies only: 1) Reduce costs whilst maintaining revenue 2) Increase revenue whilst maintaining low costs 3) Reduce the partner headcount whilst maintaining revenue and low costs 4) Maintain partner headcount whilst growing revenue and lowering costs Many “high profit percentage firms” have low leverage of people…

A project is not the annual fee with a client. Annual accounting is a project. A business plan is a project. A finance proposal is a project. A tax return is a project.

What is your average project value? It’s simple to work out. All you need to do is divide the number of invoices sent into your revenue for the year. If you have multiple invoices for one project then that should be classed as one invoice.

Your average project value multiplied by the number of projects per client per year will equal your revenue per client.

It’s a great way to look at your client base. If you have a very small average project value (but lots of clients) you will have a large administration function just for invoicing. The objective should be to increase the average project value whilst increasing the number of projects that each client buys from you each year.

If your business clients are not spending at least $20,000 with you annually and buying at least 4 projects from you (therefore average project value is around $5,000) then I think you are under-servicing your client base.

I have written an extensive report on Accounting firm performance. You can download the full report here.

Enjoy video # 11.