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Staff cost ratios in accounting firms

What is the rule of thumb when it comes to staff costs as a percentage of turnover in accounting firms? For both accounting staff and admin staff. I think for very small firms this may differ greatly but in a firm with general accounting fees of between £1m and £2m.


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03rd Mar 2012 14:20

in the "good old days"....

... it was "a third, a third, a third" as in 33% for the employee, 33% for overheads and 33% for the firm or the partners.

But that isn't often the case any more. Whatever you end up with us clouded by partne/slaried partner issues and the position and role of "non chargeable" staff. And where does employers NIC sit?

But I always reckoned that professional staff costs (including NIC and benefits) should be about 40%. Much less and you only got the rubbish; much more and you didn't make any money

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03rd Mar 2012 10:34

About 40% is ideal
In today's technology driven Environment I would say 40% staff, 20% overheads and 40% profit would be a good ratio to have - but there are so many factors that influence this, such as size of client base, quality of clients, involvement of partners in reviewing and managing work etc.

Whatever happens, I would not want it to be above 50% for all staff, excluding equity partners/shareholders

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