How much do accounting services cost? How much does a CPA charge?
We knew you were going to ask. To be an informed consumer, you need the answer to these questions. They are tough questions to answer, but you deserve to know, so I’ll do my best to explain some general pricing guidelines.
Some accountants charge by the hour. We do not.
First, let me start out by saying, I can really only speak for our firm. We are strategic accountants that focus on proactive planning. There are many other CPAs out there who operate as transactional accountants. A transactional accountant completes a transaction for you, such as filling out a tax return, doing your bookkeeping, or giving you some advice, in exchange for your money. Transactional accountants generally charge by the hour for their time at an average rate somewhere around $200 per hour. Sometimes this leads to surprise bills from your accountant. It can also discourage you from calling your accountant when you need advice. If you’ve ever had to call your lawyer, I’m sure you are familiar with this phenomenon. It can be painful to pick up the phone and force yourself to dial because you know that in a week or two you’ll get a surprise bill.
We use Upfront Pricing
This is not the atmosphere we want, nor the relationship we are trying to build. So we use upfront pricing. We do not charge by the hour. Instead we quote a price up front for the services you need. This allows you to make an informed buying decision, budget for your accounting expenses, and eliminates financial surprises from your accountant.
As a strategic CPA firm, our goal is to help you achieve your desired objectives. In order to determine which accounting services will best help you achieve your objectives, we start by listening to you. We listen to you to find out what you want to change about your current situation, and about what you are trying to achieve. Then, similarly to a doctor, we make a diagnosis about what needs to be done and put together a plan of accounting services to help you get the results you want. Then we price the plan.
Here’s where it gets tricky. It’s kind of like buying a vacation package. When people go on vacation, their initial desire is generally to get some peace of mind and downtime. They might start out by booking a hotel on a nearby beach. Then after further research, they might change to a more exotic destination. Then they might want to add in some adventure, so they book a snorkel cruise, surf lessons and zip-lining. Later, they decide to invest in a little wellness and book some spa sessions with massages, mud wraps, and yoga classes. Lastly, they want some real culinary satisfaction so they make dinner reservations at several fancy restaurants that have a great view of the sunset. The price goes up, but so does the value of the vacation. They are having more fun, relaxation, adventure, and satisfaction.
Our pricing is similar. The more you need or want, the higher the price. But there is one major difference between a vacation and accounting services. The benefit received from a vacation usually fades off after a few months, and then you need another one. The benefits received from working with a strategically focused accounting firm can last forever as we plan together to address events as far out in the future as retirement, business succession planning, and estate planning.
Everyone needs or wants something different, and everyone is trying to achieve something different, so we customize all packages of services to fit our clients’ unique situations. At a minimum, most packages include several business advisory meetings during the year. During these meetings, we do proactive tax, business, and financial planning to help you achieve your objectives. All packages of services also come with unlimited consultation so you can call or email at any time to get the answers you need to make timely business decisions. Most packages usually include business and personal tax preparation as well. Again, every package is different, but if you are interested, you can check out a long list of services that might be included in packages here.
Our packages of accounting services start at $6000 per year ($500 per month). Currently, our largest customers’ packages are priced at around $40,000 per year. Our average customers’ prices fall somewhere in between. Most fall in the range between $8,000 and $20,000 per year, depending on their needs.
Regardless of the price, it is imperative that we provide our customers value in excess of the price they pay. We make money by charging our customers more than it costs us to provide the service. This is our profit. When our customers receive value in excess of the price they pay, this is their profit, and this is what keeps our customers coming back and referring their friends.
In a nutshell, people pay us money, and we help them achieve their objectives. Once we quote a potential customer a price, they need to do a little internal analysis. They must compare our price to the value to them of receiving assistance in achieving their objectives. If they feel the value of achieving their objectives exceeds the price, they should consider engaging us.
We have found, over time, that the more dynamic or growing a business is, the more we can help them, and the more satisfied they feel. We have also found that we tend to be a good fit for businesses, nonprofit, or for-profit, with revenues of around one million dollars or up annually.
If you think we might be a good fit for each other, request a free initial consultation and a customized quote!