How Realization Negatively Impacts CPA Firms.

IN BRIEF Despite claims to the contrary, the billable hour is still the most common billing method, and realization the most common profitability metric used by CPA firms. In this case, the realization rate for this specific client engagement would be 85% ($850/$1,000) - which happens to be the average firm realization percentage for large firms, according to the AICPA 2018 National MAP Survey. Gross profit - as presented above, the standard hourly rate accounting firms utilize is essentially fictitious revenue driver representing goal that firms seek to charge for each hour of service, while employee cost a driver that is real and can be easily determined. [Extracted from the article]
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