Only just received the 2015 copy of the "Good, Bad Ugly" report on the Australian Accounting profession prepared by Business Fitness.  Makes for interesting reading.There are a couple of points that are worth repeating:

  • revenue per partner has decreased by 8.9%;

  • average client fees have reduced by over 18% in the past two years;

  • for firms using timesheets, productivity is falling;

  • lower marketing spend over the past three years; and

  • 6% increase in firms using outsourcing (reasonable number, but not very many firms are doing it).

There is one very telling comment made in the introduction to the statistics in the report (my highlights):

When analysing the 14 years’ worthof data relating to high-performingfirms, we can conclusively say thatproductivity based on chargeablehours has no correlation toprofitability.

Having just returned from the Verasage get-together in Boston, it has become even more apparent that the old models of firm management are not only redundant, they are dangerous.  Much of the discussion at the symposium related to the way successful firms focus on relationships - both internal and external.  This has to do with building, maintaining and honoring decent relationships.  Not relationships where everything is about flogging the crap out of your people and billing the hell out of your clients.  Relationships which are based on trust, accountability and common goals.

Having seen the damage done by the Almighty Billable Hour and looking at the impact this approach has on the cultures of firms, it amazes me that so many firms still use this model.

There is change already here in our industry and, as the GBU report reveals, this change is having an all-pervasive impact on our profession.  Either adapt or die.

Matthew Tol

Matthew is a founder of mta optima in Ballarat, Australia.

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http://www.mtaoptima.com.au
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