Sink or swim: Why bigger isn't always better for accounting firms
When you think about growing your accounting firm, what comes to mind? For many, growing is about increasing the size of the team. But in reality, bigger is not always better.
According to the 2022 Practice Excellence Report, when accounting firms reach a certain size, they experience significant dips in two key areas of business proficiency:
Strategy: business strategy, strategy adoption, technology strategy and innovation strategy
Management: change management, talent management, organization management and client management
What’s size got to do with it?
The Practice Excellence Report data breaks accounting firms down into six sizes:
Solo: 1 staff member
Small: 2-3 staff
Small boutique: 6-10 staff
Large boutique: 11-25 staff
Regional: 26-50 staff
Medium: 51-99 staff
When a firm progresses through each size, they face additional challenges that they must contend with. Generally, firms are able to maintain or increase their Practice Excellence scores across each of the four key areas.
But when a firm tips over into the medium category, they take a hit.
Accounting firms become less proficient in Practice Excellence when they reach 51+ employees
The biggest challenges accounting firms face when growing
A potential explanation for the decline in Practice Excellence for medium-sized firms is the unique challenges they may have faced as a result of the pandemic.
Implementing organizational change and overcoming barriers to innovation, such as what’s required to transition to remote work
G2.com
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