A lot of accounting firm owners still use the hourly billing model.
Why?
Because it’s easy, and it’s what they’re used to.
But if you’re charging by the hour for your accounting services, there are only so many hours in a day, and your profits are limited by every single one of them.
Which means you have to work a lot of hours to be profitable.
A fixed pricing model can be even more profitable than that, without the overwork.
However, you can’t just slap on $1000/month for bookkeeping + other services and give it to all your clients.
There’s a right way to do fixed pricing, and you’ll learn that today.
Let’s go!
Why Should You Use Fixed Pricing?
Fixed pricing works well for one type of firm in particular:
High-volume.
If you’re pricing dozens of clients a month and you need to move fast, this pricing strategy is your friend.
You’re not pricing the client, their unique situation, or the complexity involved in working with them.
You’re pricing the service and that alone.
It’s a significant advantage for the right firm, and it’s also a big step up from hourly billing.
It’s no surprise that, according to the U.S. Accounting and Tax Pricing Benchmark which I helped Ignition create, 54% of accounting firms use fixed pricing:
Your client knows exactly what they’re paying, and you know exactly what you’re delivering.
That predictability creates predictable cash flow for your firm too.
Now, I want to be straight with you here…
Fixed pricing is not the most profitable way to price your services.
That title belongs to value-based pricing.
Value pricing means you’re pricing based on what the service is worth to the client (i.e., their specific situation, their goals, the problems they’re trying to solve).
Done well, it lets you charge significantly more than a fixed rate ever would.
That’s the foundation of premium pricing.
Fixed pricing can work if:
- Your prices are healthy
- Your scopes are clear
- You can run a very profitable firm on a fixed pricing model
The key word there is healthy!
There are CPA firms that set their fixed prices low, leave them there for years, and struggle with thin margins.
Examples of Good Fixed-Price Models
Having a good fixed-price model doesn’t mean squeezing every last dollar out of a client or cutting corners to protect your margin.
It’s about finding a price that works for both sides of the table (i.e., you’re profitable, the scope is clear, and the client feels taken care of).
And it’s about making sure that the value you provide is well-understood.
Here are a few examples of fixed pricing models done well.
Pilot
Pilot does a good job at differentiating their three tiers.
Essentials at $99/month for small businesses that just need clean books, Core starting at $399/month for startups that need more depth and a dedicated bookkeeper, and a Custom tier for growing companies with complex needs.
Each tier has a defined scope, so there’s no ambiguity about what’s included and what isn’t.
And notice how they describe each tier around who it’s for and what the client gets out of it instead of what they do.
Xoa Tax
Like the previous example, Xoa Tax’s three tiers are built around outcomes, not tasks:
- Metal gets your books clean, your taxes filed, and your financials organized
- Steel adds a dedicated tax team, proactive year-round tax advice, and full business and personal tax filing
- Titanium brings in CPAs, finance specialists, and lawyers to handle everything with real-time analytics and support for complex tax situations
This framing is also what allows them to increase the perceived value and set high prices for their service packages.
The prices are also healthy enough that the firm can deliver the work well and support growth without burning out their team.
Fixed Pricing vs. Value Pricing
So, we’ve established that fixed pricing can work well for your firm.
But I mentioned earlier that it’s not the most profitable way to price your services.
Why?
Fixed pricing means you set a price for a service and charge every client that same rate.
It doesn’t matter who the client is, what their situation looks like, or how much value they’re getting from the work.
Everyone on the same service pays the same price.
Value pricing is different.
With value pricing, you price each client based on what the service is actually worth to them specifically.
If a client is saving $50,000 in taxes because of your proactive planning, that’s worth a lot more to them than a client who just needs a basic return filed!
Value pricing lets you capture that difference.
When you understand what a client values and price accordingly, you stop leaving money on the table.
You’re charging what the work is really worth to that specific person.
As an example of what pricing the client can do, here’s what Chris, one of my Future Firm Accelerate members, was able to achieve:
Fixed pricing, by definition, can’t do that because you set the price once and apply it to everyone.
Which means there will be clients who are willing to pay significantly more.
That said, fixed pricing absolutely has its place.
If your firm runs high volume and you need to price fast, it’s your friend.
You can’t spend 30 minutes on a discovery call for every client when you’re onboarding dozens of them a month.
If you do go for fixed pricing, just make sure your prices are healthy to begin with.
How to Make the Most of Fixed Pricing
If you’re going to use fixed pricing, use it with three-tiered pricing.
(Both examples above use this method.)
Why?
One fixed price is take it or leave it for one reason or another.
Maybe it’s too much for where they are right now.
Maybe it includes services they don’t need yet.
Maybe they just want a smaller entry point before they commit to more premium, ongoing services.
But with three pricing tiers, prospects self-select the plan that makes the most sense for them.
Plus, three tiers anchors your pricing in a way that a single fixed price never can.
Your Gold tier makes your Silver look reasonable, while your Silver makes your Bronze look like an easy yes.
You can imagine how that pricing structure does a lot of the heavy lifting for you.
You can learn more about how to build great tiers in my guide to three-tiered pricing for accounting firms.
Create a Profitable Fixed-Price Plan in 5 Steps
Getting your fixed-price model right doesn’t have to be complicated.
But it does require you to think through a few key things before you start slapping numbers on your services.
Follow these five steps.
Step 1: Define the Services You Want to Offer
As accountants, we offer certain services because it’s what everyone else does.
Just because that’s what accountants do.
Take me as an example.
I hate tax.
But when I was running Xen Accounting, I offered tax services anyway.
Why?
Because every other accounting firm offered tax, my clients expected it, and it felt like the thing I was supposed to do.
Like I shared on LinkedIn, if I had to start over, I wouldn’t offer tax.
Because I don’t enjoy it!
So, start with what you actually want to do.
Managing client expectations starts with being intentional about what you offer.
Fixed pricing works best when your scope is tight and your team can deliver the work efficiently.
If you hate what you’re doing, clients will feel that when you deliver your services.
Step 2: Organize Them Into Three Tiers
Once you know what you’re offering, stack it into Bronze, Silver, and Gold plans.
The key, as you might have noticed in the examples above, is meaningful differentiation between each tier.
More access, more proactive support, more high-value services like strategic tax planning and advisory services, etc…
A prospect should not look at your Bronze and Silver and be unable to tell why Silver costs more.
Here’s a tip for your Bronze tier:
Make it intentionally incomplete.
Withhold something that most clients want so there’s a real reason to move up.
But don’t make it so bare-bones that it doesn’t solve anything.
Here’s an example of a Bronze bookkeeping plan:
Your Bronze should be enough to solve the problems most clients are dealing with right now but not everything they’ll eventually want.
That creates a natural upgrade path.
Get that right and your tiers will do a lot of the selling for you.
Step 3: Calculate Your Cost and Margin
Once you know what’s in each tier, it’s time to put a number on it.
Here’s a simple process to get to a price you can be happy with.
Start by listing every service and support feature in your package and estimating how many hours it’ll take your team to complete per year.
Then, multiply those hours by your internal labor cost.
This will be based on your team’s salaries, not your billing rate.
Let’s say your Bronze plan includes the following:
| Service | Hours/Year | Labor Cost | Total |
|---|---|---|---|
| Bookkeeping | 100 hrs | $20/hr | $2,000 |
| Monthly financial summary | 24 hrs | $40/hr | $960 |
| Account manager support | 12 hrs | $40/hr | $480 |
| Total cost | $3,440/year (~$287/month) |
From there, apply your desired profit margin on top.
I recommend a minimum of 50%.
So, if your cost to deliver a Bronze plan comes out to $287/month…
Applying a 50% margin brings your price to around $430 or $500 per month.
($500 is the minimum price I recommend, by the way.)
That’s your floor.
If you want to charge more, you can go back to what you know about the value you’re delivering to that client and price accordingly.
But never go below that floor!
If you need help with setting prices, here’s how to price your accounting services.
Step 4: Sell the Outcome, Not the Services
Think about the last time you went to a doctor.
You didn’t pay them to point a light in your ear.
You didn’t pay them to read terms from a medical textbook or squint at an X-ray either.
You paid them to tell you what’s wrong and how they can help you feel better!
And I bet you didn’t ask them what tools or processes they used to diagnose you.
That’s how your accounting clients feel.
They don’t care that you do monthly bank reconciliations, read financial statements, or make thousands of journal entries.
They care that their books are clean, they are maximizing their tax savings, and that they can sleep better at night because someone is watching their numbers.
That’s how to effectively sell your accounting services!
Here are ways you can frame your services (feel free to save this image):
So when you present your packages, lead with what life looks like after they hire you.
The peace of mind, the saved time…
Not the checklist of tasks your team will complete to get there.
Nobody buys the X-ray…
They buy the outcome of feeling better.
Step 5: Formalize With an Engagement Letter
Once a client is ready to move forward, don’t start work without a signed engagement letter.
Get the scope, the price, and the start date in writing before anyone on your team does any work.
When you charge a fixed monthly fee, some clients might ask for something they assumed was included in their package even though it wasn’t.
Without a clear, signed agreement to point to, that conversation gets uncomfortable fast.
An engagement letter removes the ambiguity.
It defines exactly what’s in the package, what is not, and what happens if a client needs something outside of that scope.
This is very important because scope creep is one of the fastest ways to turn a profitable fixed-price engagement into an unprofitable one.
One extra request here, one favor there…
Before you know it, you’re doing 20% more work for the same monthly fee.
A clear engagement letter is your first line of defense against that.
And beyond protecting your margins, it signals something important to your client from day one:
That your firm is professional, organized, and serious about delivering what it promises.
If you don’t know where to start, I have just what you need:
- Accounting engagement letter template
- Bookkeeping engagement letter template
- Tax preparation engagement letter template
Use these to build stronger client relationships from the start!
Ready for Higher, More Predictable Income?
Fixed pricing isn’t a silver bullet, but when done right, it can be a powerful foundation for a scalable firm.
Remember: don’t just slap a number on your services and call it a day.
Build a model where your clients know exactly what they’re getting, your team knows exactly what they’re delivering, and your margins are healthy enough to sustain it all.
And if you want more practical advice on pricing and increasing your firm’s profitability…
You can subscribe to my Future Firm newsletter for free. 🙂
