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Accounting fees by Accountants are changing to flat fees vs the standard hourly rate of the past. The competition sparked the changes in fee structure
The accountant sometimes is so concerned about winning an engagement that they really don’t look at what the work that they’re doing is really worth or what the client really wants or consider Accounting fees impact on the deal.
Aside from hourly pricing, some of the models for pricing Accounting fees and advisory services include Fixed-fee. Sometimes called the menu approach, fixed-fee pricing is often used for repetitive services, such as tax preparation. It allows the accounting firm to develop and explain Accounting fees upfront the varying levels of services and fees. Fixed-fee pricing is based largely on the firm’s known costs for providing those services and for providing various upgraded services (i.e., more forms involved in the tax return).
The contingency fee is gaining popularity in Accounting fees. Consulting work that determines some sort of outcome is often billed using this method. For example, a firm trying to sell a client’s business can say upfront that if it sells the business for $10 million, the firm’s fee will be one percent. If the firm achieves a higher sales price than that, however, it will receive a higher percentage on any amount over the $10 million targeted sales price. In other words, the fee can vary based on the outcome.
Blended hourly rate, another type of Accounting fees. Often used when a project involves a team of staff with varying degrees of experience and scarcity, this method bills each hour of work at a rate “blended” from the hourly rates of each team member. This is in contrast to billing for each team member at their respective hourly rates. Therefore, if the firm can manage the engagement efficiently so that the partner and manager, for example, spend less time on it, the effective margin can be higher for the service, according to Aquila. Working conditions and customer relationships also influence which Accounting fees might be most appropriate. Does the engagement require three months of travel to Alaska or is the work near to the firm? Does it add a complex audit to an already-busy audit season, or does it involve working more closely with a client who is disorganized or is always late with their end of the paperwork? Even if some of these aspects cannot be quantified in terms of what they contribute to the price of the service, it is still valuable to consider them.