Most Profitable Counties for New York State-based Certified Public AccountantsPublished 29th Apr 2015
Manhattan has always fancied itself the Crown Jewel of New York, relegating the other boroughs and cities to second class status. It’s set up quite a competition.
Well, when it comes to the profitability of Certified Public Accountants (CPAs), it’s Manhattan that takes a back seat, with CPA practices in Chemung County ranking as the most profitable of any county in the entire state of New York.
Of course Manhattan wins the race for the highest revenue in a county by a wide margin, but the cost of doing business in Manhattan clearly makes translating that revenue to the bottom line a much harder task.
Those findings are from our most recent analysis performed in conjunction with the New York Accounting Show & Conference. Using our proprietary Market Intelligence Platform, we analyzed the profitability of over 3,800 accounting offices located in New York, including corporations, partnerships, and sole proprietorships – both large and small.
As measured by EBITDA as a percentage of revenue, CPAs based in Chemung County were the most profitable, dropping approximately $0.300 cents of every dollar of sales to the bottom line. In contrast, firms in perennial Crown Jewel, Manhattan (New York County) dropped only $0.079 of every dollar of sales to their bottom line. That means that, on average, CPAs in Chemung County are more than three times more profitable than their Manhattan brethren. While Manhattan is not the least profitable county – that distinction belongs to St. Lawrence County – the huge difference between the profitability of CPAs in the two counties illustrates the wide range of results this analysis uncovered.
Many of the other most profitable firms were in counties located outside large urban areas. After Chemung County, which was identified as the county where CPA office profits were the highest, the next four most profitable counties and their EBITDA percentages were:
County Profitability Measure
Cattaraugus County $0.286
Chenango County $0.285
Washington County $0.280
Greene County $0.279
At the other end of the spectrum, in addition to Manhattan – the county where CPA practices were the third-least profitable – the other four least profitable counties were:
County Profitability Measure
St. Lawrence County $0.068
Oswego County $0.077
Livingston County $0.092
Schoharie County $0.098
Contrasting the top and bottom of the list, CPAs in Chemung County are over four times more profitable than those in St. Lawrence County. And while, you may think the results were skewed by a dearth of accounting firms in these far removed counties, in fact, the 4 total CPA offices based in Chemung County is not far below the 14 practices registered in St. Lawrence County.
This benchmark of performance offers New York’s Certified Public Accounting firms confidence they are comparing their profitability with the entire universe of CPA practices in their state because it doesn’t rely on numbers derived from a survey or sample, where errors can run rampant.
The varying degrees of profitability may, in part, reflect the extent to which CPAs have grown their practice beyond traditional financial statement and tax preparation in addition to the general cost of living in the different areas. Accountants diversifying into other services to differentiate their practice and drive new revenue streams need reliable metrics to benchmark their clients’ financial performance against comparable firms in the same city or state, or across the entire nation. Our Market Intelligence Platform used for this study allows analysis by revenues, location, number of employees, and a myriad of other metrics. This can provide useful insight for their clients, and a valuable competitive advantage for their practice.
While similar past studies have provided ripe fodder for debate, because our analysis includes every single firm with at least one employee located in New York, no longer will accountants be able to argue the veracity of the data. But, if history is any indicator, Manhattan will surely continue to push their position as the apple of the state’s eye.
Take a look at the full ranking of the most profitable CPA practices by county in New York by filling out the form below.