We Do Not Know Which Products Make Money
in Accounting & Advisory Firms

The short answer

In accounting firms the compliance work that partners treat as the reliable base is the activity whose contribution is reduced by the advisory hours that never convert at full realisation. The version of this question that applies to accounting firms is not the generic one. Compliance fee compression and inability to shift hours to advisory without reducing statutory output — so an answer that ignores 82% realisation rate will be confidently wrong. The analysis has to start from 71% billable utilisation and 34% advisory win rate rather than from revenue.

Time recording systems tie overhead allocation to chargeable hours logged against each engagement, so compliance lines that generate most of the 43.2m revenue absorb a larger share of non-client costs even when advisory work consumes disproportionate partner and manager time that never converts to billed hours.

Only hours that can be matched directly to a client invoice are treated as traceable; the remaining pool of unallocated time, including non-billable development and low win-rate advisory pursuits, stays visible as a single overhead figure rather than being spread across every service line.

When the numbers are viewed this way the compliance book at 91 percent retention is shown to rest on the smaller set of advisory engagements that reach the 34 percent win rate, while at least one long-running statutory service continues to run below the 82 percent realisation rate without anyone having stopped it.

How to tell this is actually your problem

These three together are the signature. One on its own usually points somewhere else.

✓ The monthly pack reports only the firm-wide 82 percent realisation rate and 71 percent utilisation with no split by compliance versus advisory
✓ The service list has stayed unchanged for years even though new advisory proposals are prepared every quarter
✓ One partner states that advisory improves overall margin while another states that compliance cross-subsidises advisory when both review the same WIP schedule

The move that usually makes it worse. Allocating every hour recorded by the 210 fte staff to individual engagements produces a single gross margin for each line that rests on the assumption that all time is equally valuable.

Who this is for — and who it is not

It is for you if you run or finance an accounting firm and product profitability is quoted as a company-wide gross margin. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.

It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.

What this looks like when the analysis is actually run

Below is an excerpt from a real run of this analysis on an accounting firm. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.

The subject is Pennmark Advisory, a sample company profile used for testing rather than a customer — 43.2m total revenue with 210 fte staff.

This is one move out of a full analysis. Read a complete report — every page, no email required.

What the engine does with this question

This question routes to Matrix Strategy, one of 29 engagements the platform runs. For accounting firms it works through 82% realisation rate, 71% billable utilisation, 34% advisory win rate and 91% compliance client retention, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.

You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.

Questions people ask about this

Do I need activity-based costing?

Almost never for the decision at hand. Traceable costs plus an unallocated pool gets you the ranking, and the ranking is what you act on. Full ABC is a project that frequently outlives the decision that prompted it.

What about products that support others?

Say so explicitly and price the support. A loss-making line that genuinely pulls profitable revenue is a marketing cost with a name, which is a fine thing to be — as long as somebody decided it.

How often should this be redone?

Annually, and after any significant mix change. The ranking is more stable than the numbers, so the exercise gets cheaper each time.

Is this different in accounting & advisory firms than in other industries?

Materially, yes. Compliance fee compression and inability to shift hours to advisory without reducing statutory output — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are 82% realisation rate, 71% billable utilisation, 34% advisory win rate, and an answer built on industry-general benchmarks will usually point at the wrong one first.

What data do I need before this analysis is worth running for an accounting firm?

Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on 82% realisation rate and 71% billable utilisation. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.

When is Percision the wrong tool?

Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Does Percision replace a lawyer, tax advisor, auditor, or AI implementation team?

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.