Assume that you are a certified public accountant and own your own accounting firm. Discuss what performance measurement you would have on your balanced scorecard. Explain why each measurement was chosen.
- Increase profitability - this measure would be important for any firm, particularly for an accounting firm where competition is tough. Accounting firms need to find ways through specific initiatives on the BSC that maximize profitability. For example, an initiative would be to cut extraneous expenses by 2% per year for the next 5 years to increase net income, or an initiative would be to allocate more to advertising to gain more customers, with a target of 5% customer growth each year.
- Build brand equity - This would be the second crucial area. An accounting firm owner does whatever they can to bring the customer back. You want the customers to keep coming back, and by building brand equity, you're giving them a reason to come to you instead of going to ...
The solution discusses each area that would be included on a balanced scorecard for an accounting firm.