Upfront fixed fees preferred by accountants

Mike Taylor

Managing Editor/Publisher, Financial Newswire

8 February 2023

A majority of accounting firms are charging a fixed fee to clients, particularly larger practices, according to a new survey released this week.

The survey undertaken by Xero looked at the ways clients are billed by accountants and found that 53% were using a fixed fee plus service approach, while 45% are using an approach based on a fixed recurring fee for bundled services.

What is more, the survey indicated that most accounting firms had arrangements in which clients were billed before the work is completed.

It said that 60% of larger practices were more likely to charge a fixed fee plus service.

The survey also reveals the level of consolidation occurring in the accounting sector4, with 36% of practices having been subject to a merger, with a further 12% having been sold to another practices, and 20% of respondents saying they had gone out on their own.

The survey also pointed to accounting firms combining workforces to combat staff shortages.

It said the key motivation for merging with another practices were to share workloads in response to staff shortages (23%), and to secure a more stable future in succession planning (20%).

Looking at staffing, the survey found that over a third of firms (38%) are struggling to hire experienced team members, while around a quarter of firms are worried about retaining existing staff.

It said that, as a result, firms were taking steps to attract and retain top talent such as 40% of respondents who said they were enticing people with employee benefits and offering training and development opportunities.