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Running an accounting firm that’s profitable while keeping working hours manageable isn’t just a dream—it’s a reality for many firms within the Renew community. By applying laser-focus strategies to their business model, these firms are achieving the elusive goal of working less while earning more.
The latest Renew Bite Size Benchmark Report highlights key metrics where these strategies have made a noticeable impact. Here’s a breakdown of the areas where firms are seeing the most significant improvements, based on proven approaches used across the board.
1. Increasing Average Revenue Per Client
Most accounting firms aim to grow client revenue. Renew firms achieve this not by taking on more of the wrong sort of clients, but by building their business model around a manageable number of what we refer to as TARGET CLIENTS. Renew firms, on average, have seen their average revenue per client grow by 28.9% compared to the previous year. This uptick is largely thanks to more focused client selection and a shift toward subscription-based models, where firms are making the invisible visible by leading with advisory and pricing at a premium.
By eliminating clients in what we term the ‘Insanity Zone’—typically standalone 1040 clients who generate less than $1,000 annually—firms are not only improving profitability but also reclaiming valuable partner and team time. This strategy of reducing low-revenue clients is a hallmark of what we call the 40-Hour Firm model. By cutting down the volume and focusing on year-round service packages, firms are seeing real results, and it’s helping to balance workloads across the year.
2. Subscription Revenue as a Proportion of Total Income
Transitioning to a subscription (or monthly recurring revenue) model isn’t just a trend—it’s a necessity if you want to thrive in today’s changing landscape. Renew firms on average now generate nearly 40% of their revenue from subscription agreements, up from 31% last year and 21% the year before. Some firms have 100% of their clients on a subscription agreement; it’s just the way they do business.
This shift to subscription services is allowing firms to build deeper, more advisory-focused relationships with their clients, all while moving away from transactional, deadline-driven work that often leads to burnout during tax season. The beauty of the year-round approach is that the tax compliance is simply a wrap-up of everything that’s been done through the year, so significant time is taken out of the tax return preparation because the information is in great shape.
3. Boosting Revenue Per Professional
How well your team performs directly correlates with profitability. Our firms continue to embrace the Renew Talent Stack (for example, offshore vs. offshore, local office vs. distributed, where can you get more leverage from technology?) and on average, have experienced an average of 10% growth in revenue per professional. Firms are now averaging $221K per professional across the board, with several now exceeding the $250K target. A key secret? We’ll let Blake Meester, one of our Resident Firm Advisors, explain:
“We have a saying "Standardize internally, customize externally." This means we develop standardized products and services that can be tailored to feel personalized for each client. We began this process with our tax advisory offering. We simplified it by creating a single, consistent approach."
“The key for us was to remove complexity. We asked ourselves, "How can we make this as simple as possible?" We standardized 95% of the process and provided permission and training on how to document the nuanced, remaining 5%.”
(Blake runs a 14-person firm in Chico, California. He is one of 9 Renew Resident Firm Advisors, providing real-life insights and strategies employed by successful accountants who are actively implementing these practices).
Intrigued? We'll share more with you next week. If you'd like to learn more or discuss how we can support you before then, don't hesitate to reach out!
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