How accountants choose to set prices and bill their services is an important part of their business operations, and the subject shouldn’t be taken lightly. There are several separate forms of pricing that accountancy firms need to be aware of, and all have their own relative strengths and weaknesses.
It’s crucial, therefore, that each firm has picked the pricing strategy that best conforms to the specific needs of their business — and that they adjust their pricing methods accordingly if this is not the case. This article will examine accounting prices and pricing strategies for accounting firms, as well as how they can be adapted or changed. Read on to learn more.
Types of accountant prices
There are four main types of accountant prices which are standard throughout the industry as a whole: fixed fee, contingent, value-based, or monthly retainer. Let’s examine each of these in more detail:
Fixed Fee:
A fixed-fee charge is described as a flat rate charge agreed upon in advance by the accountant and client upon the signing of a contract, either paid before or after the completion of the work. This way, the price of the accounting services does not change depending on the amount of work or the time it takes to complete, and does not include any additional expenses or fees accrued during the processing.
Contingent:
Contingency fees are based on taking a percentage of funds for a particular outcome, which can be helpful if the client has a specific objective in mind with their reporting. For instance, they might charge purely for reporting on R&D tax credits, access to capital or debt finance, to name but a few.
Value-based
Value-based pricing is all based around either the performance of the accountants, or the results the client has received. The better these are, the more money the firm is entitled to extract. The worse the performance, the less money they can acquire. This keeps services to a high standard, but doesn’t account for any extraneous circumstances that might conspire to render their efforts less effective.
Retainer
Monthly retainers are typically used by accountancy firms who have a strong, long-term relationship with a client. It involves spreading out the costs of accountancy services over a monthly or weekly period, as part of a package deal to maintain a consistent service throughout the year.
How to adapt your pricing
So, if you’re looking to change your accounting pricing, you’ll first have to consider what services your firm offers, and what kind of clients you are catering to. Furthermore, what are your and their main objectives? And what are your values as a firm? Is it delivering results? Openness and transparency?
By determining this, and by analyzing the business models of your clients, you’ll be able to decide which pricing model is best for you; one that can aid your firm in boosting profitability while sustaining long-term revenue and positive relationships.
Join the INAA for help with accountancy pricing
INAA,’s mission is to make life easier for accountancy professionals: including helping them navigate the often-tricky aspects of accountant prices
We boast members in 50 countries, spanning five continents, and are always looking for new members to help us steer the conversation on the future of accounting. If the INAA sounds like it could help you then join us today.