Every two years, the VSCPA participates in the National Management of an Accounting Practice (MAP) Survey, conducted by the American Institute of CPAs (AICPA) and CPA.com. This survey, the profession’s largest benchmarking study on practice management topics, gathers information on the practice management approaches and financial results of firms across the size spectrum.
Responses were gathered from May–July of 2016 and reflect 2015 financial results, including responses from 51 Virginia firms, roughly evenly split between small (under $500,000 in net client fees) and middle ($500,000 – $1.5 million) revenue brands. Sixty percent of Virginia respondents are well-established firms, having been in business for 21 or more years. Ninety-six percent of those Virginia firms indicated VSCPA membership, while 88 percent said they were members of the AICPA.
Nationally, firms across every revenue band reported solid gains in revenue and profitability, and Virginia respondents were no exception. Virginia respondents reported an average of $659,964 in total net client fees, with firms in the middle bracket bringing in an average of $800,000. In fiscal 2014, Virginia firms averaged $477,060 in net client fees.
Virginia respondents skewed heavily toward tax providers, with tax services accounting for 63 percent of income and audit and attest fees making up 14 percent. That’s consistent with results across the South region, particularly for smaller firms.
Virginia firms billed at the following rates in 2015:
- Owners/equity partners: 1,251 hours at $225/hour
- Senior managers (8–10 years experience): 1,404 hours at $180/hour
- Managers (6–7 years): 1,425 hours at $144/hour
- Senior associates (4–5 years experience): 1,542 hours at $118/hour
- Associates (1–3 years experience): 1,393 hours at $108/hour
- Paraprofessionals: 1,074 hours at $75/hour
Professional salaries, excluding partner/owner compensation, made up 23.4 percent of Virginia firms’ expenses as a percentage of total income with paraprofessional salaries accounting for 4.1 percent and other salaries accounting for 4.9 percent. Office rent and other occupancy costs accounted for 5.4 percent, while payroll taxes (including partner/owner) made up 3.7 percent.
Total technology costs made up 3.8 percent of expenses, divided up as follows:
- Computer software: 2.7 percent
- Computer hardware: 0.4 percent
- Outsourced information technology services: 0.2 percent
- Other computer and technology expenses: 0.5 percent
Virginia equity partners and owners made an average of $180,008 in 2015, and their employees were compensated at the following rates:
- Senior managers: $87,306
- Managers: $82,452
- Senior associates: $57,628
- Associates: $55,000
- Paraprofessionals: $43,029
- Firm administrators: $50,313
- Clerical employees: $41,527
New hires made an average of $50,000 if they had met the 150-hour education requirement and $49,000 if they had not.
Fifty-seven percent of Virginia firms provide health insurance for employees, with 64 percent of middle-income firms offering the benefit, compared to 31 percent of small firms. Preferred provider organizations (PPO) were the most popular choice for health insurance, followed by health savings accounts (33 percent), traditional plans (23 percent) and health maintenance organizations (17 percent).
Forty-two percent of firms contributed 81–100 percent of health insurance costs, while 23 percent contributed 41–60 percent.
The most popular employee benefits are professional licenses (73 percent), professional dues (70 percent), retirement plan (68 percent), life insurance (38 percent), dental insurance (35 percent) and CPA Exam fees (32 percent).
Eighty-four percent of Virginia respondents actively maintain a website, while 66 percent provide remote access to the firm’s network/server. Fifty-six percent use cloud-based remote backup services, while 53 percent use cloud-based software and 22 percent use cloud-based servers.
Nearly half of Virginia firms (48 percent) do not promote the use of social media. Forty-five percent use social media for business development and 26 percent use it to recruit staff.
Just 14 percent of Virginia firms had a written and approved succession plan, down 5 percent from the 2014 survey. Six percent have a practice continuation agreement with another firm.