State of the Australian Accounting Profession
Survey results of key performance indicators in Australian accounting firms over the last 12 months show:
- The average firm is a two partner practice with $2,000,000 fees i.e. $1,000,000 per partner.
- The average partner works 42 hours per week and makes a profit of $340,000 pa.
- Over the last two years the average fee per client has fallen 18%.
- Tax planning fees account for 6.9% of total fees, or $69,000 per partner per pa.
- Business advisory services account for 12% of total fees, or $120,000 per partner per pa.
The falling average fee per client is due to digital disruption, cloud accounting and client fee resistance. This trend will only continue and is expected to actually speed up in coming years.
Although tax planning fees account for 6.9% of the average practices fees there are big variations amongst individual practices. Some compliance based practices literally have nil tax planning revenue and for other more proactive value adding practices it accounts for 35% of fees revenue.
Over the last 12 months the accounting industries business advisory services revenue has actually fallen compared to the previous year. To date the only firms benefiting from business advisory services are industry commentators and industry providers selling their business advisory training services to the practices themselves. Although many business clients desire that their accountant would provide them with business advisory services, the problem for the profession is that too many clients are not prepared to actually pay their accountant for it. The second issue is that the many accountants do not have the skills, expertise or aptitude to be able to provide these services.