Impact on Performance

The survey offers good insights into the outlook for practice performance, as measured by fee revenue, across the different size categories. There is a correlation between size and growth in fee revenue; the larger SMPs are more likely to predict an increase in fee revenue. Across the four practice areas, 44-55% of the largest category of SMPs (21 or more partners and staff) forecast an increase in fee revenues. By comparison, 30-39% of sole practitioners foresee fee revenue increases.

By service, the biggest practices are much more likely to forecast growth in advisory and assurance than smaller practices. This is significant since many commentators see this practice area as offering higher added value and faster growth prospects. Perhaps this reflects smaller practices being slower to realize the potential fee growth to be had from advisory and consulting, or being too small to have the capability to respond to the increasingly sophisticated demands of their clients.

Forecasted fee increases by practice size

Source:http://www.ifac.org
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