10x Opportunity
The Accounting Profession Today
In 1964 there was a research study and subsequent book written on the state of the accounting profession in Australia. There were 2,150 accountants surveyed, with data collated on everything about how they ran their businesses, how they charged, how much they paid people and how much profit they made.
I have used the data (in today’s dollars) and benchmarked the 1964 figures with just under 1,000 accounting firms in 2007. What I found was astonishing. I was specifically looking to see how the profession has progressed. I wanted to know if profit per partner had increased and by how much. The good news is that the profession has progressed.
On the lower quartile profit per partner had improved by 19%. At the upper quartile of results the profit per partner had improved by just 40%. Not even 1 percentage point above CPI over 43 years!
That is not progression. That is not thriving. That is just existing. Over that same time frame the industry has gotten smarter, introduced technology, become more efficient and produced a better product. With all of these advancements you would think that profit per partner would be rising much faster than 1 percentage point above CPI. It has not.
After 15 years working on the accounting profession I put the main reasons for this lack of progression down to 3 areas:
- The business model
- Time based billing
- Services offered
I was fortunate to survey 1,077 clients from 129 accounting firms. It was a face to face survey. The business clients were simply asked: “What do you like about this firm, what don’t you like and what would you like to see improved or added with the service and services they provide to you”?
At every single meeting (8 at a time in the meeting) the word ‘proactive’ came up. They said things like ‘we want them (you) to be more proactive with us’ – ‘we know they know more than we get’ – ‘we want more help and we’re prepared to pay for it’.
A friend of ours here at 10X, Colin Dunn, also did a survey with 1,500 business people ...
