Key performance indicators (KPIs) are essential for CPA firms that want to boost visibility across their operations and drive lasting profitability. By tracking targeted metrics, firms can uncover bottlenecks, optimize client relationships, and ensure every hour and dollar delivers impact.

Must-Track KPIs for Modern CPA Firms

• Monthly Recurring Revenue (MRR): Monitors the stability and growth of your firm’s ongoing service revenue. Maximizing MRR cushions seasonal swings and lays the groundwork for long-term sustainability.

• Client Profitability Analysis: Reveals which clients contribute most profit and which might be underpriced or resource-intensive, enabling smarter decision-making on pricing, scope, and retention efforts.

• Utilization and Realization Rates: Utilization measures the percentage of staff time billed to clients, highlighting productivity and capacity. Realization tracks how much recorded billable time is actually billed and collected—pinpointing leakage in your workflow or pricing model.

• Client Retention Rate: Measures the percentage of invoices outstanding beyond 30, 60, or 90 days, signaling cash flow risks and the health of your collections process.

• Project Delivery Timelines: Tracks the efficiency and reliability of your firm’s client service; delays can signal workflow or staffing issues that need addressing.

• Net Profit Margin: Reveals the portion of revenue you keep after all costs—CPA firm benchmarks point to a target minimum of 25%, with leading firms hitting 30%+ margins.

• New Client Growth and Acquisition Cost: Measures how well marketing and business development efforts convert to real clients and the investment required for each new engagement.

Building Visibility Through Reporting

Establishing consistent, firm-wide reporting standards ensures these KPIs are not only tracked, but also acted on. Leveraging practice management tools with actionable dashboards enables leaders to visualize real-time performance, compare against industry benchmarks, and adapt quickly.

The Payoff: Better Decisions, Stronger Profits

Firms focused on these core KPIs experience higher productivity, quicker collections, sharper pricing, and improved client satisfaction. The end result: a high-visibility, data-driven firm that’s well equipped for sustainable growth and profitability.