What Is ARPE & Why It Matters for CPA Firms
If you run a CPA firm, you already know that growth doesn’t come from just adding more clients.
Real growth comes from getting the most value out of the team you already have.
That’s where ARPE—Average Revenue Per Employee— becomes one of the most important numbers in your firm.
It’s a simple metric:
ARPE = Total Revenue ÷ Total Full-Time Employees
But the story it tells is everything.
Why ARPE Matters More Than Ever
Think of ARPE as a window into your firm’s health.
When ARPE is high, it usually means:
✓ Your team is productive
✓ Your workflows are efficient
✓ You’re delivering higher-value services
✓ You have healthy margins
✓ Your firm is scalable
When ARPE drops, it’s often a sign that:
✘ Costs are rising
✘ Work is getting stuck
✘ Staff are burning out
✘ Your capacity is maxed out
✘ Growth is slowing or stagnant
And that’s exactly what the industry’s biggest surveys keep confirming.
According to the AICPA PCPS CPA Firm Top Issues Survey (2023) and the AICPA Trends Report, firms across the country are facing the same pressures:
✓ Rising labor costs (payroll is now the biggest expense for almost every firm)
✓ Persistent staff shortages (fewer accounting graduates, higher turnover)
✓ Team burnout (too many deadlines, not enough hands)
✓ Capacity constraints (firms want to grow, but can’t take on more work)
All of these chip away at ARPE—either by reducing productivity or driving up cost per employee.
Where Offshoring Fits Into the ARPE Story
This is where offshoring becomes more than just a cost-saving idea.
When done properly—using dedicated, full-time, trained offshore professionals—offshoring helps a firm in two crucial ways:
1. It reduces the denominator (cost burden per employee).
If your average U.S. accountant costs $70,000–$90,000 plus benefits, and an equally skilled offshore accountant costs 60–70% less, your cost per productive team member drops immediately.
Lower cost → higher margin → higher ARPE.
2. It increases the numerator (revenue generated per team).
Because your U.S. staff suddenly have more capacity for:
✓ Tax planning
✓ Advisory services
✓ Client strategy
✓ Complex reviews
✓ CFO-level work
And your offshore team handles:
✓ Bookkeeping
✓ Preparatory work
✓ Reconciliations
✓ Tax prep
✓ Documentation
✓ Workflow-heavy tasks
You’re able to generate more revenue with essentially the same U.S. headcount.
More revenue → higher ARPE.
The Human Side of ARPE
Here’s the part most firms don’t think about:
ARPE is not a “numbers metric.” It’s a “team metric.”
When ARPE rises, it usually means:
Your team is working at the right level
✓ No one is drowning in low-value tasks
✓ Client work moves faster
✓ You’re not hiring out of desperation
✓ People feel aligned, not overwhelmed
✓ Your growth is intentional, not chaotic
It’s a sign of a firm that’s healthy inside and outside.
ARPE Is a Growth Strategy, Not Just a KPI
If you look at the fastest-growing modern CPA firms—whether in the Karbon Practice Excellence report, Hinge High-Growth Study, or AICPA data—they share a few common traits:
✓ They protect their team’s time
✓ They invest in technology and processes
✓ They shift low-level work offshore
✓ They double down on advisory and client-facing roles
✓ They scale without bloating payroll
The result?
Higher ARPE.
Higher margins.
Higher client satisfaction.
Lower burnout.
It’s not luck.
It’s a model.
Where Most Firms Go Wrong
Many firms try to improve ARPE by:
✘ Hiring another in-house accountant
✘ Raising prices abruptly
✘ Asking existing staff to “work a little harder”
✘ Cutting tools or software to save money
✘ Hoping next year will be less crazy
None of these solve the underlying issue: capacity and cost control.
ARPE improves only when your firm’s structure improves.
The Bottom Line
ARPE is one of those deceptively simple KPIs that quietly tells you:
“Is your firm efficient?
Is your team being used the right way?
Is your revenue model scalable?”
And in a market where:
✓ talent is scarce
✓ salaries are increasing
✓ deadlines are endless
✓ margins are shrinking
offshoring isn’t just an operational decision —
it’s a strategic growth lever that directly strengthens your ARPE, your margins, and your firm’s future.
Better capacity → better revenue → better ARPE → better firm.
Simple math.
Real impact.
