THE BARATELLI INSTITUTE · Mentoring at Scale
FOR CPA & ACCOUNTING FIRM PARTNERS

Run the practice tool on yourself first.

Realization, utilization, lockup days, effective rate, profit per equity partner. Engagement-level profitability with overhead allocation. The metrics every Top 200 firm tracks monthly. Most solo and small-firm CPAs have never seen them on a single page about their own practice.

8
Practice metrics
PPEP
Profit per equity partner
Lockup
DSO + WIP days
$/hr
Effective rate
YOUR PRACTICE
1
Practice profile
2
Realization & utilization
3
Cost structure
4
Engagements
5
Practice scorecard
STAGE 1 OF 5

Tell me about your firm

Six inputs. The defaults are typical for a $1.5M revenue regional CPA practice with 8 staff.

Total client billings recognized in the period. Excludes reimbursable expenses.
$
Owner-partners with capital and a P&L share. Solo firms enter 1.
Managers, seniors, staff, bookkeepers — anyone whose time is billable.
Receptionist, billing, IT, marketing, paraprofessionals not billing time.
STAGE 2 OF 5

Realization & utilization

The two ratios that determine whether you have a healthy practice or a stressed one.

Your published rate book, blended across partners + staff. The "card rate" before write-downs.
$
Realized fees ÷ (standard rate × hours worked). Top-quartile small firms run 92-96%; median is 84-88%; struggling firms below 80%.
%
For partners and chargeable staff combined. Most healthy firms target 1,500-1,800 hours per chargeable FTE.
Billable hours ÷ available hours (typically ~2,080/yr for FT staff). 70-75% is solid; over 80% means burnout risk; under 60% means underutilization.
%
A/R balance ÷ daily revenue. CPA firms benchmark 45-60 days for top quartile, 70+ days for laggards. Influenced by retainer policy and collection discipline.
Unbilled WIP balance ÷ daily revenue. The "shadow inventory" of professional services. Top quartile under 30 days; laggards over 60.
Lockup = DSO + WIP days. The single most-ignored metric in CPA practice. Every day of lockup is a day of cash you've earned and not banked. A firm at 100 days lockup with $1.5M revenue is carrying ~$410K in trapped working capital. Cut lockup by 20 days and you free $80K of cash — without selling another hour.
STAGE 3 OF 5

Where the money goes

Total costs. The leftover — after partner draw — is profit per equity partner. PPEP is the headline metric every CPA owner should track.

Salaries + payroll taxes + benefits for billable staff. Typically 50-70% of staff revenue contribution.
$
Non-billable admin headcount fully loaded.
$
Annual office costs. Hybrid firms run 40-60% of pre-2020 levels.
$
Tax software (CCH/Drake/UltraTax/Lacerte/etc.), practice management, audit tools, hardware refresh, IT support.
$
CPA license + state board + AICPA + state society + E&O insurance + peer review.
$
Website, conferences, networking, paid search, referral program, mandatory CPE.
$
Office supplies, professional services (own CPA, lawyer, banker), travel, miscellaneous.
$
"Reasonable comp" partner draw before profit-share. K-1 firms enter the W-2 portion only.
$
STAGE 4 OF 5

Top engagements

Enter your 8-15 largest engagements (or representative ones). Stage 5 ranks them by profitability with allocated overhead — the analysis most firms have never run.

How overhead is allocated. Total practice overhead (everything in Stage 3 except direct staff cost and partner draw) is allocated to engagements proportional to direct labor hours. This matches how Big 4 and AmLaw firms do engagement P&L. Partners receive their direct billable hours back as labor; the residual partner draw is allocated to engagements pro rata as a "partner overhead" line.
STAGE 5 OF 5 · YOUR PRACTICE SCORECARD

Practice scorecard

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$—

The eight practice metrics

Lockup visualized

Days of revenue trapped between work performed and cash collected.

Benchmarks

Your numbers against typical Rosenberg-Survey-style data for sub-$5M firms. Top quartile / median / bottom quartile / your firm.

Engagement profitability ranking

After allocated overhead and direct labor, ranked from most to least profitable.

Recommendations

PAIRS WITH
CPA in a Box · CFO & Controller's Guide · Solo CPA Launch Playbook
The CPA in a Box bundle covers practice operations end-to-end — engagement letters, pricing models, offshore staffing, technology stack, marketing playbooks, and the full Year-1 P&L for a launching practice. Subscribe to the library →
CPA IN A BOX

The full practice operating playbook — by email.

Engagement letter library, pricing model spreadsheet, offshore-team playbook, marketing templates, AI agent templates, year-1 P&L. Eight bound deliverables.

Benchmarks shown are illustrative typical-range values for sub-$5M-revenue CPA firms based on industry surveys (Rosenberg, AICPA PCPS, Accounting Today, IPA). Your actual benchmark targets vary by region, practice mix, partner count, and growth stage — these are conceptual references, not your firm's specific peer data. This tool computes engagement profitability using a single overhead-allocation method (proportional-to-hours); other methods (revenue-weighted, partner-time-weighted, fee-realization-adjusted) can produce materially different rankings. This is not professional advice. Engage a practice-management consultant, a peer-firm benchmarking service, or a fellow practitioner before making major practice changes based on this output.
WANT THE METHODOLOGY BEHIND THIS TOOL?
This calculator is one chapter of CFO & Controller's Reference Guide.
The tool gives you the answer. The guide gives you the argument — the case law, the worked examples, the negotiation playbook, the cross-check tables, the exception cases. Read the chapter and you can defend your number to a board, a buyer, an examiner, or a counterparty.
The methodology behind this calculator is in Ch 33 (CPA firm operating economics) of the reference guide.
See the Guide → Browse all 22 guides
PROFESSIONAL DISCLAIMER · PLEASE READ

Educational and informational purposes only. This calculator and any output it produces are intended solely for general educational and decision-support purposes. They do not constitute investment, tax, legal, accounting, appraisal, lending, insurance, or any other professional advice, and they do not create a fiduciary, attorney-client, accountant-client, or advisor-client relationship of any kind.

Estimates based on your inputs. All results are estimates derived from the data and assumptions you provide. Tax law, accounting standards, regulations, market conditions, and the specific facts of your situation can materially change the answer. The Baratelli Institute, its affiliates, and any co-branding professional make no warranty of accuracy, completeness, currency, or fitness for any particular purpose, and disclaim all liability for decisions made in reliance on the output.

Consult your own qualified professionals. Before acting on anything calculated here, consult your own attorney, CPA, financial advisor, appraiser, lender, or other qualified professional licensed in your jurisdiction who has reviewed your specific facts and applicable current law. The Baratelli Institute is a publisher of practitioner reference material. It is not a registered investment adviser, broker-dealer, law firm, accounting firm, appraisal firm, or lender.

Co-branded versions: If a professional advisor's name and contact information appear on this tool, that advisor has elected to make the tool available to clients as a courtesy. Inclusion of an advisor's name does not constitute the advisor's endorsement of any specific result, nor does it transfer professional responsibility for the underlying methodology to that advisor. The disclaimer above applies regardless of co-branding.