Excerpted from the 2021 INSIDE Public Accounting (IPA) National Firm Administration Benchmarking Report. Now Available.
Eighty-six percent of firms reported an increase in revenue this past year. The most prevalent reasons were organic growth (85% of responses) and economic conditions (20%).
Of those reporting a decrease in revenue, it is no surprise that COVID-19 was cited most frequently – by 5 of every 6 firms.
Client fees are set by the partner in charge in 80% of firms. This is highest in the Northeast (93%) and lowest in the Great Plains (68%).
Recurring revenue has been the lifeblood of the profession for many years. On average, all non-Big 4 firms expect 80.8% of their revenue to be recurring. This is lowest in the $50- to $75- million firms at 72.8% and highest in firms under $5 million at 90.6%.
The largest firms (over $75 million) expect 9 cents of every dollar to be lost annually due to client attrition. In firms under $5 million, the expected loss is 2.9 cents of every dollar.
One in 6 firms above $75 million accepts crypto-currency as payment for client receivables.
Acceptance of credit card payments has dropped to 75% of firms in the Northeast – 94% of firms in the Great Plains and Great Lakes accept credit cards.
Generally, firms are bullish on the future, with all non-Big 4 firms projecting annual growth of 7.2% on average for 2021.