Wednesday, October 22, 2014

Are the 'Defining Dozen' the Right Metrics for Your Firm?

The American Institute of CPAs (AICPA) posted a list last year of the 12 metrics CPA firms should track in order to better define how well a firm is capitalizing on existing relationships and setting the stage to expand into new ones. The aim of these metrics is to provide qualitative feedback and help firms manage their reach with clients.

The AICPA identified the following key metrics:
  • Lifetime value of a client (sum of all revenues generated from the firm's service offerings over the lifetime of the client)
  • Cost of client acquisition
  • Client retention rate
  • Average number of services per client
  • Average number of top-client "touches" per month
  • Average client response time
  • Number of cross-selling opportunities versus such opportunities won
  • Request for proposal (RFP) win percentage, other proposal win percentage and pipeline win percentage/conversion
  • Average number of professional development hours per firm member (monthly and annually)
  • Utilization rate and realization rate (by service offering)
  • Staff-to-partner ratio
  • Revenue growth per year (actual vs. expected)
Does your firm track these metrics or similar ones? Are some of these more useful for firms of specific sizes or practice areas?

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