Three Benchmarking Techniques That Lead To Greater Results

As CPAs, we love numbers. We can measure, quantify, analyze, rank, correlate, compare and chart numbers better than any other group or profession. We look at numbers, deal in ratios and can help clients figure out where they stand. Looking inward, we look forward to benchmarking our firms to see how we stack up against our peers. But how can benchmarking historical data lead to improved results for the future?
 
There are three basic ways to benchmark your firm. All three are tools to help identify your situation, and all three can lead your firm to behavioral changes that will improve your performance for the future.
 
Comparing Your Numbers To Peers – Knowing how we stack up economically and operationally against our peers has been one of the truisms of American business life forever. Ranking ourselves against others permeates our culture, starting early in our educational system through our first job, and carries on for decades in our careers. Corporate culture is no different.
 
Comparing Your Numbers to the Best of the Best – If you want to emulate a group, why not see how you stack up against the best in the country? How far does your firm need to stretch to achieve the success of the elite of the industry? What can you learn from what they do? Comparing your firm to the best of the best offers you the ability to understand the key metrics that make them shine, and build your firm around those key operational areas.
 
Comparing Your Numbers Against Your Own Progress – True growth from year to year can best be measured against yourself. Remember third grade when your parents used to make a pencil mark in the doorway to mark your height each year? It didn’t really matter what the average height of other third-graders was, or that you weren’t as tall as the biggest kid in class. The satisfaction came from seeing the bar being raised – literally – each and every time you stood and got measured.