Busy Season Is Here
Firms are so buried they often lose focus on profitability by client. Our team consults with hundreds of CPA firms ranging from the top 25 to emerging practices. We created our proprietary Market Value Accelerator, that reviews and analyzes the financial and operational details of a firm.
One common mistake we see is firms writing down fees. They do it to service a client that has become a poor fit or they undervalue and underprice their work. This is particularly a major concern today because of the tight labor market.
A Recent Example of a Firm We Worked With
A $12 million dollar practice had about $2 million in write-offs. Some realization write-downs will always occur, but this firm should have been at least $13 million. Their adjustments decreased their value by almost 10%, taking away $1 million plus in profits that could have been distrubuted to partners and staff.
Ask Yourself These Questions This Year
- How much is your firm writing down?
- Which clients are you working on that you shouldn’t be?
- How can you add more to your bottom line?
What steps are you taking to make this happen?