January 2003

State Firms Earn and Pay Staff More Than Average Practice
Survey Offers Benchmarks for CPAs Against Peers from Around the State, Region and Nation

New York state CPA firms have larger staffs and earn twice the revenue of other practices around the nation on average, according to a recent national benchmarking survey.

About 2,500 firms nationwide—67 from New York state—responded to the Internet-based National Management of Accounting Practice (MAP) survey, conducted by the American Institute of CPAs in conjunction with the Texas Society of CPAs to provide firms with data to benchmark policies and performance.

New York state firms fiscally outpaced the national average in revenue, earning $3.2 million in their last fiscal year, compared to $1.5 million earned by practices in the nation as a whole. Large, multi-owner firms concentrated in New York City and Long Island helped to raise the state average overall in many fiscal benchmarks, such as staff compensation and revenue, though most of the respondents were single-owner firms.

A press release issued by the AICPA and TCPS partnership pointed out a number of areas for comparison between New York and the nation at large. State firms have a slightly higher ratio of CPAs on staff; according to the data, the average firm size for all respondents was 12 employees, eight of whom are CPAs, while firms in New York have an average of 18 employees, with 13 CPAs.

“The survey showed that downsizing was not an issue for firms (nationally) this year,” according to a statement released by the AICPA. “Ninety-eight percent of all respondent firms either grew or remained the same size in the past year while 13 percent increased by 20% or more.” Only 94 percent of New York’s firms, however, grew or remained the same, while the remaining 6 percent decreased in size.

For New York firms, like all respondents, the three largest sources of income were tax services, write-up/data processing, and auditing and attestation. The largest expense for the firms surveyed was non-owner professional salaries, totaling, on average, $386,580, or 25.5% of total income. Firms in New York spend $869,000, or 26% of total income, on professional salaries on average.

Participating New York firms bill slightly higher than their peers around the country.

The average hourly billing rate of an active owner is $153, while a CPA earning about $50,000 would have a billing rate of $83 an hour. In New York, the average billing rate for active owners is slightly higher, at $157 an hour, while CPAs earning about $40,000 a year have a billing rate of $96 an hour.

For More Information

All participating firms received a detailed customized report that ranked their firm based on location, size of firm, compensation and level of profitability, in addition to other factors. For more information on this year’s survey, including a list of all 2002 participating states, or to find out how to access overall national results, visit www.pcps.org. For complete information on New York State’s survey results, visit the NYSSCPA website at www.nysscpa.org.