Benchmarking For Accounting Firms

Once you’ve answered the six questions, these are the measures we track with clients to actually move margin. Nudge each of them a little and profit usually follows.

Earn / Realisation rate

This is the clearest signal of whether pricing, scoping and review are working together. If you consistently recover less than the value of time recorded, the fee was set too low, scope crept mid-job, or the review required rework. Track realisation by service and team lead, then fix the cause: tighten scope statements, make change-orders normal, and standardise review so quality is right the first time.

Write-offs & rework

Write-offs aren’t just a number; they’re a map of where standards slip. When they cluster around a particular service (e.g., BAS, year-end), it points to missing checklists, unclear handovers, or avoidable delays that force last-minute fixes. Treat the pattern as a coaching brief: one checklist, one handover rule, and one pre-review quality gate will usually cut write-offs without adding hours.

WIP days + debtor days (lock-up)

Lock-up is the cash cost of friction — work sitting in progress and invoices sitting unpaid. If WIP days climb, jobs aren’t moving; if debtor days stretch, billing rhythm or collection discipline is off. Introduce an interim billing milestone for longer jobs, run a weekly WIP walk in peak months, and make “next step + owner + date” visible for every stuck file. When flow improves, payroll pressure eases and decisions get easier.

Turnaround time on two core services

Turnaround is where client experience and internal productivity meet. Publicly committing to sensible timeframes for two common services (for example, Company Returns and BAS) gives the team a clear target and helps you defend the price attached to that promise. Document what “ready for review” looks like, remove optional steps, and protect small blocks of deep work — turnaround drops, rework falls, and clients notice.

Personnel ratios & average staff costs

Leverage either works for you or against you. If partners and managers are spending too much time in review or admin, the ratio of fee earners to support is off or the role design needs a tune. Compare your mix and average staff costs to firms of similar size and location; then consider a pod coordinator, better templating, or moving certain tasks down a level. Design the work so the right person does the right step at the right time.

Charge-out rate compliance

A strong rate card is useless if it isn’t used. Variance between the rate card and actual billed rates usually comes from discounting at the desk, scope anxiety, or inconsistent minimums. Publish clear minimums by level, make change-orders normal rather than awkward, and report compliance by manager. When the team can confidently say “this is the work, this is the price, here’s how we’ll deliver it”, compliance follows — and so does margin.