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ADP Allinial Global CPAmerica International CPA.com NACVA NetSuite notes and methodology Glimpses of the future SPONSORED BY: o a certain extent, our annual included in the Top 100 Firms list are Top 100 Firms and Regional NOT the same as those published in last Leaders report is a historical year’s report. They are a re-ranking of exercise — it ranks the leading the current year’s cohort of T100 Firms Tpractices based on their performance based on the latest information and in- in the previous year (in this case, 2016). clude firms that were not part of the list But it also points the way forward, last year. They are only for comparison and not just in terms of giving firms a purposes, and do not replace the rank- set of benchmarks to work against in ings published last year. the year ahead. For us at Accounting Unless otherwise noted, revenue Today, the way firms respond to the is net revenue. survey offers valuable Also, unless noted, clues to emerging trends. CONTENTS revenues, offices and staff Twenty years ago, when are for the U.S. only. firms started to ask how Top 100 Overview 4 The Total Employ- to account in their fee Firms to Watch 6 ees category is comprised splits for their growing of partners, professionals revenue from manage- Top 100 Databank 8 and all other personnel, ment advisory services, Firm Strategies 10 including owners. it was an early indicator Where two firms Top Tax Firms 12 of the rise of consulting. reported equal revenue, (And 10 years later, when Top 100 Rankings 16 the firm with the higher respondents started to percentage of revenue in- Niche Services 22 ask what MAS meant, we crease received the high- knew that consulting was Client Categories 24 er ranking. One State St. Plaza, 27th Fl., New York, NY 10004 E-mail: [email protected] truly well-established.) Regional Leaders 25 As noted above, http://www.accountingtoday.com Similarly, a rising “MAS” still stands for Editor-in-Chief Daniel Hood Firm Highlights 35 Managing Editor Danielle Lee number of questions a “management advisory Senior Editors Roger Russell, Sean McCabe Technology Editor Ranica Arrowsmith decade ago about how to services” — or consult- Art Director Neesha Haughton report full-time-equivalents heralded a ing, as everyone calls it now. ADVERTISING AND BUSINESS SERVICES change in how firms staff themselves. As always, this report would not be Senior Vice President and Group Publisher Rob Whitaker The current questions we’re get- possible without the work of our edi- Publisher Jack Lynch (212) 803-8803 ting are about how to report equity vs. torial staff — managing editor Danielle Advertising Directors Erin Scanlon, Alexandria Alati Ad Sales Coordinator Susan Korcynski non-equity partners, indicating that Lee, online editor-in-chief Mike Cohn, Material in Accounting Today may not be repro- more and more firms are introducing senior editors Roger Russell and Sean duced without express written permission. For more information about reprints and licensing content, this kind of two-tiered partnership McCabe, and technology editor Ranica please visit www.SourceMediaReprints.com or con- tact PARS International Corp. (212) 221-9595. structure. Don’t be surprised to see a Arrowsmith. Without their hard work, Publishers Copy Protection Clause: Advertisers and change in how we present those in the insights and threatening phone calls, agencies assume liability for all content (including text, representation and illustrations) of advertis- years to come. we wouldn’t be able to present you with ments and responsibility for claims arising there from For now, though, here are a few this — the 2017 Class of the Top 100 made against the publisher. Copyright © 2017 Accounting Today and Source- notes on how to read this year’s report: Firms and Regional Leaders. Enjoy! Media, Inc. All rights reserved. The previous year’s rankings — Dan Hood, Editor-in-Chief SOURCEMEDIA INC. 3 overview Growth, with moderation BY DANIEL HOOD ast year in this space, we predicted in fact, no firm jumped more than 10 spots, and, particularly, in specific client areas. the possibility of the Top 100 Firms and only one — PYA — is new to the list, While the types of niches and clients that operating at a slightly higher rate against the four that joined last year. were growing the most didn’t change going forward — and it looks like much from last year’s report, the percent- Lthat might well be the case, though at a age of T100 Firms who were active in them DON’T IGNORE THE GROWTH slightly moderated pace. None of this moderation should obscure did. (See Niches & Clients, on page 22-24.) Overall growth for the T100 was 8.80 the fact that firms are continuing to grow, Looking beyond the statistics for in- percent, off a little from last year, but still and to find solutions to issues that have dividual firms, it’s worth noting that more above the previous rate of roughly 8 per- plagued them in previous years. strong practices are springing up all over cent. Most of the other metrics in our the country (or at least they’re coming Databank (see page 8) show a similar to our attention more often). result — a moderation from last year, A new plateau? The threshold for membership in but still elevated somewhat from the Revenue growth of the Top 100 Firms, in percent* the Top 100 jumped to $37.7 million, four or so years before that. $1.5 million over last year’s figure, and That sort of respectable-but-mo- yet our “Firms to Watch” list (see page derate approach characterizes much of 30 6) hit new records for membership, the list this year, though there was one with at least five firms well within stri- 25 segment of the T100 that broke that king distance of next year’s Top 100. trend: The 34 firms with revenues bet- 20 ween $100 million and $1 billion, after AROUND THE COUNTRY lagging a little last year, delivered above- 15 That burgeoning of strong firms is par- trend growth in a number of catego- 10 ticularly evident in the Regional Lea- ries this year. Their revenues grew by ders lists, most of which expanded sig- over 10 percent, and they added both 5 nificantly this year, with four, five and professionals and total staff at higher even six new members, revealing deep 0 levels than last year — while the seven 94 96 98 00 02 04 06 08 12 14 16 benches of talent across the U.S. (See 10 firms with revenues above a billion, -5 “Regional Leaders” on page 25.) and the 59 below $100 million, grew While there was plenty of M&A * Compiled from individual firm results as reported in all categories at rates that were just at year’s end; includes some estimates in the regions, there were, as noted below those reported last year (though above, fewer of the headline-grabbing still respectable). mega-mergers that inflate growth rates That sort of moderation reigned in Take staffing and succession plan- and shake up the local landscape. That a number of areas. For instance, while ning: While these are by far the most pres- helped moderate individual firm growth 37 firms reported revenue growth above sing issue for the chief executives of the rates, which fluctuated in a narrower band 10 percent this year, versus 40 firms last Top 100 and the Regional Leaders (see than last year. year, only five reported revenue growth “Strategies,” on page 10), they seem to be The message of this year’s report, above 20 percent, versus 10 last year. And getting a handle on it, with the number of then, is of growth with moderation — a while firms reported 130 mergers this year, firms reporting flat or declining partner comfortable state, but one that requires against 125 last year, there were fewer of counts down to 20, versus 32 last year. And constant effort to maintain. AT the big-bang mergers that had made head- while total employee figures may not have lines in the past. One of the few to change grown as much as in 2015, firms still found If you think your firm should be one of our the Top 100 was the combination of Ca- enough warm bodies to increase staff by Top 100 Firms or Regional Leaders, send lifornia’s Gallina with CliftonLarsonAllen over 9 percent. an e-mail to [email protected], That dearth of major mergers meant Similarly, it can’t be denied that more and we will add you to our survey contact there were fewer big jumps in the Top 100; firms are finding success in niche offerings database for 2018. 4 The firm of the future starts here A nationwide accounting association made up of 75 member firms built on four key goals: to bring prestige to firms both domestically and internationally to strengthen relationships among member firms to continuously improve to make more money Connect with your firm’s future today! www.cpamerica.org • 104 N. Main Street, Gainesville, FL 32601 • (352) 727-4070 overview BEYOND THE TOP 100: FIRMS TO WATCH A record number of firms made this year’s “Firms to Watch” list, with a dozen or more firms within striking distance of next year’s list. (Note that the roster includes only firms with positive growth rates; firms in the revenue range with negative growth rates are excluded.) Firm Headquarters Managing partner Year-end ($ mn.) % chg. Offices Partners Employees PB Mares Newport News, Va. Alan Witt Dec 37.48 6.36 9 37 219 Brady, Martz & Associates Grand Forks, N.D.