Get Your Pricing Right: Actionable Insights from the Ignition’s 2024 Accounting Benchmark Report

Are you struggling to set the right prices for your accounting services??

Do you worry you’re either overcharging and driving clients away, or undercharging and not valuing your work enough??

If you're figuring out your pricing strategy for 2025, know that you're not alone.

Many owners of accounting firms face this challenge, especially in a competitive industry like ours.?

But don’t worry! The 2024 US Accounting and Tax Pricing Benchmark report from Ignition is here to guide you.?

It’s full of current pricing benchmarks, billing trends, and practical advice to help refine your strategy for 2025.

Understanding the Benchmark Report

Ignition’s 2024 US Accounting and Tax Pricing Benchmark surveyed 345 US accounting firms to gather insights on pricing models and fees for common tax, accounting, and advisory services.?

This report is your go-to for understanding what others are charging and planning to charge, helping you make informed decisions to adjust your pricing.

Planning for Fee Increases

Now, let’s talk about pricing adjustments. Did you know that 57% of firms are planning to raise their fees in 2025? This is crucial because your fees should truly reflect the value you offer.?

Most firms are considering a price increase of about 5% to 10% across all services. This trend is largely driven by rising business expenses.

In fact, nearly 58% of firms cited increasing costs as the primary reason for these planned fee hikes. These costs include everything from rent and software subscriptions to ensuring we compensate our dedicated team members fairly. Keeping up with inflation and the overall cost of doing business is essential.

Here's the thing—adjusting your prices isn't just about staying afloat. It's about confidently stating, "Yes, we're worth this."?

When we set our fees to reflect the true value of our services, we not only stabilize our business but also reinforce the quality and dedication we bring to our clients every single day.

This benchmark report is invaluable—it empowers accounting firms to set prices confidently that showcase their expertise and impact.?

As Ryan Lazanis, CPA and CEO of Future Firm Inc., says, "Too many firms are overworked and underpaid. With better pricing, they could earn more for the same work and manage fewer clients to reach their financial goals."

Shifting to Fixed and Value-Based Pricing in Accounting

The latest benchmark report shows a significant move among accounting firms toward fixed and value-based pricing models. This shift stems from the need for clearer and more predictable billing, which clients prefer as it helps them budget more effectively.

Here’s a quick breakdown:

• 35% of firms have adopted a fixed-fee model for tax preparation, with another 30% varying fees based on case complexity.
• About 40% of firms collect fees after completing the work, while 26% take a deposit upfront.

For tax planning and advisory services:

• 38% price based on the value delivered, recognizing the strategic impact of their services.
• 29% use fixed fees, and 21% still rely on hourly billing.

Why this shift? Fixed pricing eliminates the uncertainty of hourly rates, clearly stating costs upfront which enhances trust and client satisfaction. Value-based pricing aligns fees with the real value provided, encouraging firms to focus on impactful solutions that boost a client's business success.

These models not only make pricing straightforward and predictable for clients, but also demonstrate that your firm prioritizes outcomes over hours spent. This approach can strengthen client relationships and stabilize your revenue.

If you're considering these strategies, understand your service delivery costs well and communicate the value clearly. This ensures your pricing reflects both your services' cost and their worth, benefiting both your firm and your clients.

Decoding Pricing Trends in Tax Preparation Services

In the accounting world, the fees charged for a basic individual tax return can tell us a lot about a firm's size and the types of clients they serve. Typically, around half of all accounting firms price these services between $400 and $799. This range is indicative of the standard market rate for straightforward tax preparation.

However, pricing can vary widely depending on the firm’s scale and the complexity of the services they provide. Smaller firms, often serving individual taxpayers with relatively simple financial situations, might set their fees below $400 to attract clientele who are looking for basic tax help at a lower cost.

On the other end of the spectrum, larger firms with more resources and expertise may cater to clients with more complex financial needs. These clients might include businesses or individuals with diverse income sources, investments, or international financial interactions, which require more detailed and specialized tax planning and filing. For such comprehensive services, larger firms could charge upwards of $1,500.

Understanding these pricing dynamics is crucial for accounting firms aiming to position themselves effectively in the market.

By aligning their pricing with the complexity of the services they offer and the client demographics they target, firms can better meet client expectations and enhance their market competitiveness.

Refining Your Pricing Strategy: Key Actions and Next Steps

1. Adopt or Expand Fixed-Fee and Value-Based Pricing: If you haven’t yet, consider moving to these pricing models. They clarify billing for clients and could streamline your operations.
2. Review Your Pricing Annually: Adjust your fees to reflect your growing expertise, inflation, and market conditions.
3. Consider Your Firm’s Revenue Tier: Align pricing strategies with your firm’s revenue and market position. Larger firms can often command higher fees based on their expertise.
4. Implement Tiered Pricing Models: Creating service tiers (e.g., gold, silver, bronze) can cater to diverse client needs and budgets, potentially boosting revenue.
5. Focus on Strategic Growth: Use pricing as a tool to drive business growth and enhance profitability.
6. Communicate Changes Effectively: If you're planning to adjust prices, it’s essential to have open discussions with your clients. Clearly explain the value they continue to gain and how these changes align with broader market trends. Transparency in pricing fosters trust and helps manage client expectations, reducing the likelihood of churn.

These insights highlight the dynamic nature of pricing in our industry and the importance of continually assessing and adapting strategies to meet market demands and boost profitability.?

This approach encourages us to reconsider how we price and deliver our services, ensuring we remain competitive and aligned with client needs.

To dive deeper into strategic pricing and ensure your firm remains ahead, check out our comprehensive offerings and detailed insights. Visit our resources page or contact us to discuss how we can help tailor your pricing strategy for success.

Ignition's 2024 US Accounting and Tax Pricing Benchmark report reveals crucial insights to help your firm stay competitive and profitable.

Inside this report you'll discover:

• Up-to-date pricing benchmarks and billing trends
• How your firm’s pricing stacks up
• Key data to refine your pricing strategy
• How firms are adapting to client expectations

Access the report here: ignitionapp.info/UAC_benchmark_report

About Roger Knecht

Roger Knecht is president of Universal Accounting Center, a post-secondary school for accounting professionals. With over 20 years of marketing, sales, HR & operations experience, Roger Knecht has helped thousands of business owners work ON their businesses to increase revenue, improve profits and build value. His strong work ethic and collaborative style delivers reliable, high-quality results for business owners.

Roger’s podcast, Building the Premier Accounting Firm, keeps accounting professionals on the cutting edge of the industry offering quality bookkeeping, accounting, and tax services. He hosts discussions with some of the accounting world’s best minds and shares actionable insights for firms.

Roger is the author of “Your Strategic Accountant” and “Your Profit & Growth Expert”, each written to help business owners understand what they can expect from the accounting profession.

Universal Accounting provides accounting professionals with the training, certifications, coaching, and support they need to become Profit and Growth Experts for their clients.