How benchmarking transformed a client and a practice

Implementing industry: Building & construction

Original service level: Annual compliance – $3,000/year

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Background

Two years ago, a mid-sized accounting firm was providing basic compliance work for a building industry client. The business was turning over $12 million a year, but despite the size, profitability was low.

Two working directors were taking home only $300,000 combined in profit. The accountant knew something was wrong, but without complex comparative data, the conversation around “how to improve” wasn’t getting traction.

Benchmarking reveals the gap

The accountant introduced the Top 20% Business Benchmarking System. The first benchmarking review showed:

• Subcontractor costs were 70% of revenue, far above the Top 20% benchmark of 40% for similar building firms.
• Profit margins were well below industry leaders.

Cash flow was tight despite high revenue. By presenting the findings in clear, line-by-line comparisons, the client could see exactly where they were bleeding money, and how much profit was being left on the table.

The advisory process

The client moved to quarterly benchmarking reviews, each one followed by specific action plans:

• Renegotiating subcontractor rates and contracts.
• Bringing some work in-house to reduce reliance on high-cost subcontractors.
• Tightening project management to reduce cost overruns
• Improving scheduling and resource allocation to boost productivity

The results

After 12 months:

• Profit increased from $300,000 to $756,000.
• Subcontractor costs dropped significantly, closing much of the gap to the Top 20% benchmark.
• Directors had more confidence in pricing and project control

After 24 months:

• Profit reached close to $2 million
• The business had fully restructured its cost base, creating a much more sustainable and profitable model
• The directors had shifted from “working in the business” to focusing on strategic growth

The win for the accountant

Benchmarking turned a $3,000/year compliance client into a $48,000/year advisory client. The accountant now charges $4,000 per month for ongoing benchmarking and strategic support — and the client sees it as a bargain because of the clear return on investment.

Key lessons

1. Benchmarking creates urgency — the client saw the numbers and wanted to act immediately.
2. Regular reviews keep the momentum — quarterly check-ins ensured continuous improvement.

Advisory fees are easy to justify when you can show a direct link between your advice and their profit growth.

Bottom line

This case demonstrates the transformative power of benchmarking, enhancing both the client’s business and the accountant’s revenue stream. One benchmarking conversation turned into a $48,000/year advisory relationship and delivered an extra $1.7 million in annual profit to the client.

Find out how our benchmarking software can transform your client’s business and enhance your revenue stream. Book a demo here now.