Revenue per Employee in an Automated World

Earlier this week we learned about the audit automation firm AuditBoard and it’s $3B exit. Made me think about automation, AI and it’s effect on CPA firms. Turns out, I’m not the only one wondering.

Embracing connected, cloud-based accounting technology can be a game-changer for accounting and CPA firms, with a potential 39% increase in revenue per employee! According to the Rightworks 2024 Accounting Firm Technology Survey, accounting firms leveraging advanced technology significantly outpace their less tech-savvy peers.

The survey, gathering insights from nearly 500 leaders in CPA, accounting, tax, and bookkeeping, reveals that technology adoption boosts revenue across firms of all sizes. Firms positioned higher on the Modern Firm® Maturity Continuum—Contender, Collaborator, and Leader—see more substantial gains (in some cases significantly) than those on the lower end – the Followers & Initiators.

Some Interesting Observations:

Contenders enjoy at least 29% more revenue per employee than Initiators and Followers.

Collaborators and Leaders realize up to 39% higher revenue per employee than those at the lower end of the continuum.

Despite clear benefits, many firms hesitate to adopt new technologies due to perceived barriers. Common blockers include:

Lack of technology expertise (44%)

Cost concerns (43%)

Internal resistance (28%)

So what sets the Leaders Apart? Leaders harness standardized, cloud-based tech stacks and AI-driven insights to proactively serve clients, driving efficiencies and increasing service levels. Their approach exemplifies the power of technology in transforming business operations.

The message here is clear and somewhat unsurprising: embracing advanced, collaborative technologies can be integral in maximizing revenue per employee. In an era of fewer and fewer accountants, this should be music to the ears of many accounting & CPA firm leaders.

#Accounting #Technology #cpacareers #cpa #AI