Accounting firms can render a wide range of services to generate turnover. These services can range from general consulting to very specific and specialised tasks. Is there a secret recipe to obtaining the ideal turnover?
The time to complete different services varies, which may cause varying contribution to turnover from different services.
According to a recent University of Pretoria Survey respondents were requested to provide an estimated breakdown of the contribution to turnover from each service rendered as well as an estimated breakdown of time spent on each of these services (The contribution to turnover and time spent for all services will each total 100%).
From the figure below it can be seen that bookkeeping contributes the most to annual turnover (23.3%) and also takes the most time (24%), followed by compilation of financial statements (turnover = 22%, time = 20.8%) and taxation (turnover = 19.7%, time = 20.4%) services. It is interesting to note that both bookkeeping and taxation services take proportionally longer to complete for the same contribution to turnover than the preparation of financial statements does, but only by a small margin. In other words, an accountant spends less time to prepare financial statements, but earns more than by providing bookkeeping and taxation services. Auditing and review services contribute on average 14.5% to an accounting firm’s turnover and take 14.3% of the time spent on services. Consulting and management accounts take 7.2% of a firm’s time, and contribute the same percentage to turnover. Payroll services require 4.1% of an average practice’s time, and provide 4.6% of the turnover.
Estate services, BEE verification, business valuation, insurance and international services are seldom provided by the common accounting firm. Other services that are sometimes rendered are secretarial services, training, litigation, wealth management and software support. There is a strong correlation between the time spent and the contribution to turnover for all the services i.e. the more time spent on a service, the larger its contribution to turnover will be.