2024 Firm Revenue Report

Introduction

If you run a bookkeeping or accounting firm, chances are you’re not just doing it as a hobby or a passion project, but to make money. You want to make enough money for your services so you and your staff can live comfortably. Reaching this point takes getting certain things right, like offering high-value, high-margin services, and setting the right pricing strategy. In this report, we focus on the former.

Surveying 261 firm owners, we uncover important data and insights that will hopefully help you make 2024 a more profitable year. You’ll learn about:

• The services that drove revenue and profit for 261 firms
• You’ll see exactly how much revenue firms made in 2023, and
• You’ll get additional insights and context directly from firm owners like you.

Let’s dive in.

PS: All figures are in US$. A few respondents submitted data in CA$ but we converted them to US$ using Google exchange rate as of today (03-13-2024). 

Accounting and Bookkeeping Firm Revenue Breakdown

Using data from survey respondents, we can break down firm revenue in 2023 by firm size, working style, and firm age.

Firm size:

• Solo firms made an average of $62,327.
• Firms with 2 to 5 employees made an average revenue of $292,292.
• Firms with 6 to 10 employees made an average revenue of $741,166.
• Firms with 11 to 20 employees made an average revenue of $1,093,330.
• Firms with 20+ employees made an average revenue of $2,871,429.

Working style:

• Fully remote firms made an average of $214,165.
• Hybrid firms made an average of $562,704.
• On-site firms made an average of $612,108.

Firm age:

• 0 to 1-year-old firms made an average revenue of $77,297.
  • Average client count of 54 with the minimum being 1 and the maximum being 1,057.
• 2 to 5-year-old firms made an average revenue of $473,050.
  • Average client count of 103 with the minimum being 2 and the maximum being 1,000.
• 6 to 10-year-old firms made an average revenue of $640,870.
  • Average client count of 249 with the minimum being 5 and the maximum being 1,875.
• 11 to 15-year-old firms made an average revenue of $375,920.
  • Average client count of 307 with the minimum being 4 and the maximum being 2250.
• 15+-year-old firms made an average revenue of $626,079.
  • Average client count of 384 with the minimum being 7 and the maximum being 2000.

Who weighed in

To help us get a clearer picture of the circumstances around our survey respondents, we asked questions about their firm age, employee size, working style, and location.

Firm age

2 to 5-year-old firms make up the largest percentage of survey respondents, followed closely by 15+-year-old firms. Newer firms (0 to 1 year) comprise the smallest percentage of total respondents.

Number of employees

Smaller firms with 2 to 5 employees comprise the largest percentage of survey respondents, followed by solo firms.

Working style

There’s an even split between fully remote firms and hybrid firms among respondents.

Location

Most respondents are based in the United States, followed by Canada.

Others:

• Scandinavia
• New Zealand
• Puerto Rico
• India
• Italy
• Uganda
• Nigeria
• Bulgaria
• South Africa
• Bermuda

Number of clients served in 2023

On average, respondents served 225 clients in 2023.

The lowest number of clients served by firms in 2023 was 2 and the highest was 2000.

2023 Revenue

Revenue brackets

In 2023,

31.8% of firms made between $101,000 to $300,000 in revenue while 29.1% made between $10,000 – $100,000.

Only 0.4% made $5,000,000+ while 8% made between $1,001,000 to $2,000,000.

Actual revenue

The average total revenue earned by firms in 2023 was $623,296 with the lowest revenue being $1000 and the highest revenue being $10,000,000.

Services that drove the highest revenue

In 2023, bookkeeping services drove the highest revenue for firms, especially QuickBooks cleanup (as you’ll later see in the additional comments section). Tax returns came up as the second highest revenue-driving service according to 33.3% of respondents.

Others:

• Tax Resolution
• Logistics
• Clean up project

Services that drove the highest profit margins

Services that drive high revenue don’t necessarily bring in the highest profits. In this section, we wanted to unpack what services gave firms the highest amount of profit in 2023. Bookkeeping again came up as number one with a 31.8% vote, followed by tax returns (30.7%) and advisory (12.3%). Payroll and audits drove the least amount of profit according to our survey respondents.

Others:

• Tax Resolution
• Daily Money Management
• Training

Additional Comments for Context

We asked respondents if they had additional comments to provide context to the answers they gave in the survey. These were their feedback:

Insights:

• QuickBooks clean-up gave firms the highest profits.
• Some are running their firm as a side business, working part-time.
• You don’t necessarily need a large team to make revenue and/or profit as a firm owner.

Key takeaways: Accounting and bookkeeping firm revenue analysis

• The average number of clients served by accounting and bookkeeping firms in 2023 was 225. The lowest number of clients being 2 and the highest, 2000. This is irrespective of the fact that some respondents indicated that they worked part-time in 2023. It’s safe to assume that the demand for accounting and bookkeeping services isn’t dwindling anytime soon. With the accounting industry being reported to have been worth $652.32 billion in 2023 and growing to $676.73 billion in 2024 at a compound annual growth rate (CAGR) of 3.7%, firms can expect to make revenue and profit with the right strategy.

• 31.8% of accounting and bookkeeping firms made between $101,000 to $300,000 in revenue while 29.1% made between $10,000 – $100,000. Does this mean that the 7-figure firm narrative being pushed by some is a myth, a lie, or a privilege reserved for a choice few? Our conclusion from this report is that, realistically, this figure represents what most firms earn. However, a lot of factors come into play such as the firm age, how strategic the firm is with marketing and sales, firm size, and pricing strategy, among others. With 0.4% indicating that they made $5,000,000+ while 8% made between $1,001,000 to $2,000,000, it shows that there are firms out there living the 7-figure dream life.

• The average total revenue earned by accounting and bookkeeping firms in 2023 was $623,296 with the lowest revenue being $1000 and the highest revenue being $10,000,000. Bookkeeping services drove the highest revenue for firms, especially QuickBooks cleanup while tax returns came up as the second highest revenue-driving service according to 33.3% of respondents. It’s interesting to see that QuickBooks cleanup work came up a lot as profitable considering how messy and complicated it can be. Veronica Wasek, explaining the pricing strategy for QuickBooks clean-up work wrote “With clean-ups, you often don’t know exactly what you’re getting into or exactly how much work will be involved, and these unknowns can make pricing the cleanup pretty complicated.”

• Unsurprisingly, advisory came third as one service that drove the highest profits for firms in 2023. A lot of mid-size firms that make 7 figures often attribute their success to advisory services. Accounting Advisory Services encompass services that you provide to clients that assist them to make informed financial decisions and reach their organizational goals. These include cash flow forecasting advising, offering insights into tax planning, and everything in between. These services are often high-margin but require a certain Skillset and a great marketing and sales process. In our playbook on How To Build A 7 Figure Firm Through Advisory Services, Brandon Hall of Hall CPA breaks down his process for taking his CPA firm to high 7 figures through high-margin advisory services. It’s definitely worth a read.

• Payroll and audits drove the least amount of profit according to our survey respondents. We recommend that when considering the services your firm should offer, it’s important to speak to your peers to see what’s working and what’s not working for them. Your own experience isn’t always the best answer. You can learn from other people’s experiences.