What if the difference between building a million-dollar asset and simply having a job came down to tracking just five numbers?
In this episode of Who’s Really the Boss?, Marcus and Rachel Dillon share the exact metrics that helped them grow DBA from $400,000 to nearly $6 million in revenue. These are the same KPIs they presented to over 200 accounting professionals at Intuit Connect and their Gather conference, backed by real benchmark data from firms ranging from $500,000 to well over $5 million in revenue.
Most accounting firm owners can rattle off their revenue figure without hesitation. It’s the go-to metric when someone asks about the size of your practice. But as the Dillons explain, revenue alone won’t tell you whether you’re building something valuable or just running faster on a hamster wheel.
While you could track dozens of KPIs (Dillon Business Advisors tracks over 20), five metrics form the essential dashboard for any accounting firm owner serious about building value. These numbers measure your business and determine whether you’ll have options when it’s time to step away.
The Five Essential KPIs That Form Your Firm’s Dashboard
Think about the dashboard in your car. As Marcus explains, you could scroll through dozens of gauges showing everything imaginable, but the instruments front and center are the ones critical to getting where you’re going safely. The same principle applies to running an accounting firm.
These five metrics create what Marcus calls a “level playing field” for understanding firm health and value. Let’s break down each one and see how firms in Collective by DBA benchmark data perform.
Gross Revenue (Trailing 12 Months)
This is your speedometer. It’s big, central, and impossible to ignore. The collective average sits at just under $2 million, representing a 10% increase from Spring of 2024.
But Marcus recommends tracking the trailing 12 months, not calendar year. Why? Because that trailing 12 months removes seasonality and shows what investors actually evaluate. “Think about how much has happened at DBA in the last 11 months,” he notes. “We’ve done two acquisitions. We’ve continued to grow Collective. We’ve added different people. It would be very deceiving to only focus on that last calendar year.”
That 10% growth could come from price increases, culling the client list, or organic growth. Revenue alone doesn’t tell you which, but it confirms movement.
Monthly Recurring Revenue (MRR) as a Percentage of Gross
The Collective average now sits at 47% MRR, up 2% from Spring. DBA operates at 70% MRR.
“It’s very unlikely that 70% of our business or revenue is not going to show back up next month,” Marcus explains. “That just helps us run a more stable business. It helps cover payroll, rent, technology subscriptions, and all those other expenses.”
A panel at Intuit Connect featuring firm owners who had completed acquisitions delivered a sobering insight. Matthew May from Sorren; Chris Williams, founder of System Six; and Becky Munson, Partner at EisnerAmper confirmed acquirers will buy firms without MRR, but they won’t pay as much for them.
“Would you rather get a better valuation? Would you rather run a better business by moving them over to monthly recurring? Or would you rather somebody else do that after you sell the firm?” Marcus asks.
Revenue Per FTE
This efficiency metric shows how much revenue each full-time equivalent team member generates. The Collective average is $194,000 per FTE, up 1% from Spring. That means your typical $2 million firm operates with about ten people.
“It’s not so much about finding ways to cut people out of your business,” Rachel says, emphasizing an important point. “It’s more about not having to find that next person when you bring on two more clients or three more clients.”
The goal is moving toward $200,000, then $250,000, and eventually $300,000 as technology enables greater efficiency. But context matters. A firm heavy on bookkeeping won’t look the same as one staffed with tax attorneys billing $500 per hour.
Earnings Before Owner Compensation (EBOC)
This is where profitability gets real. EBOC equals your net profit plus owner salaries and benefits. It creates a true comparison between firms regardless of how owners structure their compensation.
The Collective average sits at 40%, down 1% from spring. For potential buyers, Marcus notes the attractive range is between 35% and 50%.
Why not use EBITDA?
“EBITDA typically has a value in there for the owner’s role,” Marcus explains. “And if you have a succession event, they will look at EBITDA and beat you up based on the amount you pay yourself.” With a $2 million firm at 40% EBOC generating $800,000, an acquirer might value the owner’s role at $250,000 and calculate EBITDA at $550,000 for valuation purposes.
Even if you plan to give your firm away, “you want to give something other people want. You don’t want the receiver to say thanks, but no thanks,” Rachel points out.
Owner Production Hours
The final metric addresses what many firm owners care about most: their time. The Collective average is 1,152 production hours annually out of a standard 2,080, and that number dropped 12% from Spring.
“That’s not skewed by tax season,” Marcus clarifies. “This is all being pulled trailing 12 months.”
Owners successfully delegated over 10% of their production work while other metrics improved. As Marcus notes, “I know most owners would welcome that decrease in EBOC to work 10% to 12% less year over year.”
How KPIs Influence Each Other
Understanding these metrics is just the beginning. The real insight comes from recognizing how they push and pull against one another.
The Collective data reveals healthy, balanced growth: Revenue up 10%. MRR up 2%. Revenue per FTE up 1%. Owner hours down 12%. EBOC down just 1%.
But Marcus warns about the dangers of optimizing one metric at the expense of others. “What does revenue growth at all costs look like? It’s accepting anything that comes in the door. Probably your owner hours go up, or your costs go up because you have to employ people to do this work that may not be the best work.”
Similarly, you could improve revenue per FTE through mass layoffs. “My revenue per FTE would shoot up because I just have less FTEs,” Marcus explains. “Sure, my EBOC will increase, but my quality of life will probably go down.”
The key is finding balance. Revenue growth while owner hours decrease or hold steady, maintaining EBOC without burning out the team, and MRR creeping upward for predictable cash flow.
A Real-World Example of Pulling the Levers
The Dillons advocate for backward mapping. Start with where you want to go, identify the lever most likely to get you there, estimate costs and risks, then pressure-test results.
DBA tested several levers over the years: price increases, automation, hiring an operations manager, evaluating their client list, monthly recurring packages, and specialized hiring at the director level.
The Price Increase Lever at DBA
In 2024, DBA tackled pricing that had slipped on legacy clients. With an average monthly client at $2,100, they still had several below $1,000, which was unprofitable given their team structure.
They targeted a 14% increase, higher than typical because they’d delayed too long.
“We knew some people were on the bubble, “Marcus says, sharing his thought process. “We knew this would either move them to churn or invest and go deeper with our team.”
The messaging was crucial. “Don’t make the price increase about yourself,” Marcus advises. “No client wants to hear that. You have to have a better value perspective than your costs are increasing.”
Rachel adds that peer networks prove invaluable here. “You can talk yourself out of doing price increases. But in a peer group, you see what other people charge and what other people plan to do for their price increases. You think, ‘Well, I’m doing the same work as they are. Why am I still charging so little?’”
At the Gather event, when asked about planned increases for 2026, most firms indicated 10%, with some going up to 20-25%.
The Results
DBA lost $12,000 in monthly recurring revenue from churned clients but gained a net 4% in total billings while serving fewer clients. Revenue went up. EBOC went up. MRR percentage went up. Revenue per FTE improved. Owner hours decreased.
“You could improve all five of those metrics more than likely by price increases alone,” Marcus concludes.
Rachel emphasizes this wasn’t about pricing out clients. “The goal was to continue to serve them at a price that made sense for the business.” For truly problematic clients, she recommends direct action. “Just have the conversation and help them find a new provider. Don’t keep serving them because they’re paying you.”
Your Next Steps
The Dillons follow an Improvement Season framework:
- April 16 – August 15: Assess progress and implement changes
- September – October: Pressure test during higher volume
- November – December: Reevaluate and adjust
- January: Launch with refined plan
Some changes show results quickly. For example, price increases make a mark within a quarter. Others, like absorbing a director-level hire, might take a full year.
Marcus emphasizes involving your team. “Do it with your leadership team. Do it with somebody beyond yourself. And then invite others to improve that KPI and celebrate it with others. The cool thing about having a team is to be on a mission together.”
Rachel adds two key questions for listeners:
- Which KPI do you need to move to increase your firm value?
- What KPI are you not tracking yet, but you should be?
Whether you plan to sell, pass on, or simply run a better business, these five metrics determine your options. “You will have a succession event in your lifetime because you’re just not going to live forever,” Marcus says. “You’re either going to sell, give it away, or shut it down.”
The choice is yours. But it starts with measuring what matters.
Listen to the full episode for the complete conversation, including more details on implementing these strategies in your firm.
Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.