A new report from practice management software provider Ignition says rising business costs are driving fee increases at accounting firms, with 57% planning to raise fees across all services next year.
The 2024 U.S. Accounting and Tax Pricing Benchmark report from Ignition, which surveyed 345 owners and decision-makers in accounting firms, adds that most firms are planning to increase fees across services by 5% or 10% in 2025.
Key findings include:
- 57% plan to increase fees across all services.
- 90% plan to increase fees for individual tax returns.
- 87% plan to increase fees for business tax returns.
- 70% plan to increase fees for tax planning and advisory services.
- 85% plan to increase fees for bookkeeping and accounting services.
- 76% plan to increase fees for CFO and controller services.
However, the report noted only around 5% of firms reported increasing fees with the specific goal of growing revenue, revealing a potential gap in how firms are leveraging pricing as a strategic tool.
“Although covering operational costs is essential, this finding suggests that many firms are not fully capitalizing on the opportunity to use pricing as a proactive driver for revenue growth,” Ignition states in the report.
The report also indicates a clear shift from hourly billing to fixed-fee and value-based pricing. This trend underscores a growing focus on aligning fees with outcomes and long-term client value, rather than the time invested, Ignition says.
Key findings include:
- 54% use fixed-fee or value-based pricing for tax preparation services.
- 67% use fixed-fee or value-based pricing for tax planning and advisory services.
- 79% use fixed-fee or value-based pricing for bookkeeping and accounting services.
- 75% use fixed-fee or value-based pricing for CFO and controller services.
“By embracing fixed-fee and value-based pricing, firms are positioning themselves to cover rising costs and enhance their client relationships, offering the clarity and value that build long-term trust,” the report says.
The report also benchmarked current fees for tax, accounting, and advisory services, which varied based on firms’ annual revenue range. The greatest variance in pricing was for tax planning and advisory services in particular. For firms with revenue of as much as $250,000, about 23% said they charge less than $500 for these services, while a near-equal number (around 21%) said they charge more than $2,000.
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Tags: Accounting, Firm Management
