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Accounting Partner profits decreasing


Accounting Partner profits decreasing

The Proactive Accountants Network (PAN), an Australasian-wide coaching and consulting firm to the Accounting Profession has today released its annual Accountants Benchmarking Report.

In line with general economic trends the report shows a decline in revenues and profits for non-PAN members across the whole of Australia and New Zealand. This year the average of the firms included in the report is $293,058 profit per Partner (last year $322,694 profit per Partner) - versus Proactive Accountants Network (PAN) member firms at $380,655 per Partner. A 30% differential.

CEO, Rob Nixon said: “The savvy firms are doing more than historical checking and lodging services which is normally called compliance. Historical report writing offers little value to the client and, as new technology creates the commoditisation of compliance, this service will continue to face price pressure. Declining profits will continue unless Accountants add more value to what they are doing. Services that help the business owner interpret data, explain what is happening and then help to change the financial performance of the client will be the services of the future. To remain relevant and survive Accountants will have to offer more than they currently do”.

The study also reports on Accounting specific KPI’s such as directors productivity, lock-up and write-ons. Write ons are achieved when the accountant charges a value or project based fee for work completed, rather than using an hourly rate, which simply rewards a firm for taking longer than it should or for being inefficient. Both businesses and accountants benefit from a fixed rate on services and this report shows that increasingly firms are ditching the average hourly rate (AHR) model. Victorian firms have the highest example for percentage of write ons at 59% while Tasmanian accountants have Nil% as a "best result".

Highlights from the 2012 Accountants Benchmark Report include:
• How profit per Partner is down this year; the average of the firms included in the report is $293,058 per Partner (last year $322,694 profit per Partner) - versus Proactive Accountants Network (PAN) member firms at $380,655 per Partner
• The highest performer was $2.5 million in profit per Partner - versus last year's performance of $2.7 million in profit per Partner
• The highest level of revenue per director in this year's report was $5.9 million
• This year's report shows a "best result" of revenue per full-time equivalent (incl. Directors) of $405,437
• Average hourly rate averaged at $166 and a high of $721
• The lock up (WIP and debtors combined) averaged 85 days - versus PAN firms average results of 61 days, whereas the best report firm was -31 compared with PAN firms' best result of -109 days.
For further information and to view the report please visit,

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