Survey: Client Accounting Services Increasingly Significant Source of Revenue for CPA Firms

By:
Chris Gaetano
Published Date:
Dec 7, 2016
MoneyBag

CPA firms are increasingly relying on client accounting services like CFO support as a major revenue driver, now making up nearly 10 percent of the profession's overall revenues, according to the Journal of Accountancy. This is a dramatic increase since 2014, which was the last time the survey was taken. Top-tier firms, defined as those with $10 million or more in revenues, more than doubled the amount they took in client accounting services during this time, making up 9 percent of client revenue, versus 3.9 percent two years ago.

Client accounting services are even more attractive for smaller firms, with revenue percentages being almost inversely proportional to firm size. For instance, these services make up 8.5 percent of revenue for firms the next tier down, those making between $5-10 million, 10 percent for the next tier after that, those between $1.5 million and $5 million, and on and on until, for firms that have less than $200,000 in annual revenues, 20 percent is comprised of client accounting services. 

The Journal of Accountancy said that automation of simple processes has contributed to this growth: Many of these jobs are time-consuming and costly, but with more of them now done through automated processes, offering them to clients has finally become cost-effective. 

The findings of the survey, which was conducted by the AICPA, came from responses from 1,537 CPA firms across the country, who were asked details about their latest fiscal-year financial results. 

Click here to see more of the latest news from the NYSSCPA.