Firms that rely on the old-fashioned billable hour are in the minority compared to fixed-fee billing, value-based pricing and other models.
Recent polling from revenue and billing platform
Tax prep firms were the least likely to charge by the hour, with only 5.2% saying they charge an hourly rate, compared with the 82.6% who use minimum fee plus cost of complexity, fixed fee, value pricing, a set fee for each form and schedule, or "other."
Bookkeeping services were little better, with the poll finding just 8.2% of firms charged by the hour. In contrast, 80.5% use fixed fee billing, value pricing, or "other."
Similarly, of those offering outsourced CFO and controller services, 11.4% use billable hours. In contrast, 48.8% use either fixed fees, value billing or minimum fee plus complexity.
The area where the hourly rate was most healthy was in tax planning and advisory, but even there it remained a minority. The poll found that 20.9% of those offering tax planning and advisory services would charge by the hour. Ignition CEO Greg Strickland said this might reflect not so much tax advisory practices wanting to keep the billable hour but instead that these firms are in the middle of a transition toward other pricing models. The report noted that, in contrast to the 20.9% who still use hourly charges, 63.5% use fixed-fee billing, value pricing, or minimum fee plus cost of complexity.
"One trend we've seen among firms is that the first year of a tax advisory engagement often looks very different from subsequent years," Strickland said in an email. "Firms are still establishing scope, understanding complexity, and building confidence in their estimates, so they may lean on minimum fees or hourly pricing initially. Over time, as firms develop a stronger understanding of the work involved, many become more comfortable moving toward fixed-fee or value-based pricing models. It's an evolution rather than an overnight shift, and we've seen that pattern consistently across multiple years of this research. This is likely where the market is going. It's a year-on-year evolution that takes time for firm owners to get comfortable with the accuracy of their quoting (realizing that many firms write off anywhere from 20-30% of their billable hours to 'admin')."
Overall, Ignition observed that value pricing and fixed-fee billing now significantly outweigh hourly billing.
"Across nearly every service category, fixed-fee and value-based pricing now outweigh traditional hourly billing," said the report. "This trend is particularly evident within advisory, bookkeeping and CFO services, suggesting the profession is becoming more comfortable monetizing knowledge over labor. As automation continues to reduce manual effort, firms are responding by adopting pricing models that better align fees with outcomes, expertise, and business impact."
Strickland said this move away from the billable hour could be explained at least partially by the rise of AI, which he viewed not as a disruptor of the accounting profession but a massive opportunity for leverage for firm owners and practitioners to adopt it.
"As AI continues to increase efficiency, we believe it will accelerate the shift toward value- and outcome-based pricing. If technology allows firms to deliver results faster, the focus naturally moves away from hours worked and toward the value created for clients," he said.
Asked whether Ignition could examine its historical data on this matter, Strickland said the company found some directional evidence that aligns with the benchmark findings, but would be cautious about treating it as a definitive market trend, as service scope varies significantly within each category, so the company recommends people view this internal data as a directional context rather than a precise year-over-year pricing index.
"What we generally see is that billable-hours pricing remains a minority model across the service lines covered in the report, while fixed-fee pricing has become more prevalent over time. We also see some evidence of fixed-fee prices increasing in recent years, particularly in tax-related services," he said.
What accounting firms charge
Beyond how firms charge, the Ignition data also indicated what firms actually charge.
For tax prep, fees for a basic individual income tax return were most commonly under $400 (23%), followed by $400-$599 (22.4%). As for business tax returns, 26.9% charge between $1,500-$1,999, while 24.8% charge between $1,000-$1,499.
For tax advisory and planning, 20.3% of firms charged over $2,000, while 20.9% charged $500-$749. But overall there seemed to be great variation in what firms charge for these services.
Few bookkeepers charged $750 or more. The poll found that 29.1% of bookkeepers charged $250-$499 while 28.5% charged between $500-$749.
Finally, those performing outsourced CFO and controller services charged the most, as the most common price point, 24.6%, was over $2,500. Still, the remaining prices had a lot of variability, as the No. 2 price point was a tie between $2,000-$2,500 and $500-$999, both at 16.3%.
Regardless of price, though, Ignition found the majority feel like they're not charging enough. Overall, 77% of firms plan to increase prices. Of those that plan to increase prices, 38.9% said it would be by about 5%; meanwhile, 24.9% said they plan to raise prices by 10%. Only 4.6% of firms plan to increase rates by more than that. Just 9% said they don't plan to raise prices at all.
The main reason for price increases was to meet rising business costs, cited by 55.8% of respondents. The next most common reason, to improve profit margin, was an extremely distant second at 12.3%.
While about 23.6% reported being concerned that raising prices may make them lose clients, those who have done so generally report it was not so bad. Nearly half (42.7%) said most clients accepted the change without issue, and 26.4% said that while they did lose some clients, profitability remained stable or even increased. Only 1.9% said they lost some clients as a result of raising prices and that this impacted profitability.
Price benchmarking
Ignition recently released its own solution for price benchmarking (
"One interesting signal from Price Insights is that firms using the recommendations increase their pricing by an average of 40%, suggesting there is often a meaningful gap between how firms are pricing today and what the market may be willing to support (and that just increasing fees by 5-10% as commonly reported in our benchmark report may not be enough)," he said.
Based on the poll responses, Ignition recommended firms review pricing annually, benchmark before making changes, focus on not just effort but value, standardize where possible, use fixed-fee pricing strategically, create premium service tiers, build pricing into their renewal process, collect payment earlier, communicate value before price, and treat pricing as a business strategy.
