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At Socket, one of the most common questions we hear from accountants and bookkeepers is: ‘How should I price my accounting services?
And here’s the interesting thing, most accountants are brilliant at advising their clients on this, but don’t always practice what they preach.
It doesn’t matter if you bill by the hour or use value-based pricing. When you don’t know your costs, you’re flying blind.
Building a pricing model for accountants and bookkeepers isn’t always straightforward. If you’re a sole practitioner the challenge could be more complex. If you’re not paying yourself a salary or your costs are low, it can be even harder to know how to price right. You might be working all the hours under the sun and still not making enough money. If that’s your story, your pricing is wrong, and we’re going to fix it.
Whatever the size of your practice, big or small, let’s establish some ground rules for pricing your accounting or bookkeeping services:
Step 1: Pay Yourself a Commercial Salary
If you’re a sole practitioner or getting paid via dividends, things can get messy. Low overheads, no salary, just drawings from the pot. But here’s the rule: Always build in a commercial salary.
That means asking: “What would I have to pay someone else to do my job?”
Yeah, yeah! We know you’d like to earn more than the benchmark, but this should be treated as profit, not base salary.
The reason this matters? One day, you might want to step back. If your salary is factored into your pricing, you can replace yourself and still have a profitable business. You don’t have to sell your business; you could instead become an investor in your business, and get paid from the profit you make.
Step 2: Add Your Overheads
This is where you need to think ahead. Your overheads aren’t just your rent and software subscriptions, and even if your cost base is low at the moment, you don’t want to be setting your prices low too.
Plan ahead so you don’t have to go back to your clients with a massive price hike:
- Planning to move to a bigger office? Build that in.
- Want to win more business? Budget for marketing and sales costs.
- Hiring staff? Don’t forget to add in recruitment costs, laptops, and training.
This is the perfect moment to build yourself a budget. It’s not glamorous, but it’s essential: Charge as if you were running a bigger firm, and use the extra profit to accelerate your growth.
Step 3: Add Profit
Now you know your salary, plus your cost base, and how this is going to change over time. Next, it’s time to factor in profit.
We suggest 10–20%. Any less and you’ve got ask yourself if you’re running a business or if this is a hobby. These can be tough words to hear, but this part is essential, and we want you to win.
The only exception here, is if you’re reinvesting for rapid growth. (If you were SaaS, we’d be talking about the rule of 40, but that’s a blog for another day).
Step 4: Work Out Your Velocity
Next, you want to work out your minimum velocity. This is your minimum price per hour.
We’ve already got the big number at top (the numerator), now we need to work out our capacity (the denominator).
☝️ This is where the unit economics kick in.
- First, decide how much you actually want to work. How many hours do you have available? 35 hours? Term-time only? Remember, this is your business and you set the rules.
- Then, start chopping down this number. You (and your team) have a ton of admin that you need to do, and you’ve also got sales and marketing to keep on top of - realistically around 35% of your time will vanish into non-billable work.
- What’s left is your billable capacity.
Now take your costs + profit (the numerator) and divide it by your billable capacity (the denominator).
Boom - you’ve got your velocity. That’s the minimum hourly rate you should be charging for any service you provide.
While your velocity gives you a solid baseline for an hourly pricing model, you don’t have to stop there. Many accountants and bookkeepers now use a value-based pricing model or adopt a hybrid approach where fees are linked to the outcome delivered rather than just the hours worked.
Step 5: Price Your Services
Use your velocity to work out how much you should be charging for every service, and test whether your service pricing makes sense. Remember this is the minimum and not every one on the team will be as lightning fast as you. Base your estimates on average time taken, not “speedy you” on a good day.
This is where keeping timesheets can pay dividends. Wait! Wait! I know you hate timesheets…I get it.
But tracking how long tasks take to complete means have more clarity, and you can turn the ‘I think this process takes X minutes’ to ‘I know this process takes Y minutes’.
I’m a fan of being transparent and sharing your pricing logic with your team. If everyone knows the logic, they’ll be able to help you to identify why a specific client’s work takes longer than anticipated. If there’s extra complexity, you’ve got a clear reason to add an extra price driver to your pricing menu.
Step 6: Know When to Adjust Prices
There are two main triggers to change your pricing: annual inflation, and volume changes.
Annual Inflationary Increase
You should add an inflationary price increase every year to cover salary and cost increases. Train your clients to expect it, and do it the same time every year. (Socket makes it easy to apply a % price rise from a set date, even as a quick bulk adjustment for all your clients).
For software price hikes that change at a different time to you applying an inflationary price increase (like Xero bumping fees every September), you can treat those as separate services. Socket can handle this too with with price monitoring and bulk adjustments.
Volume Changes
As your client’s business grows (or shrinks), then update the price. Did they add an employee? Make a minor adjustment to the proposal to update their bill.
Make a point of celebrating the price change too, because how you deliver the message sets the tone, and growth is a good thing.
Step 7: Rinse and Repeat
Get comfortable with this process on your own business, and then roll it out for your clients. This is advisory gold. They’ll love you for it, and you can charge a premium.
Copy and paste this framework, and run with it! We don’t mind. If you win, we win.
Pricing doesn’t have to feel like guesswork. When you build in a commercial salary, plan ahead for overheads, add a healthy profit margin, and know your velocity, you’re not just covering costs: You’re setting your practice up for growth.
👉 Want a hand putting this into practice? Socket makes it simple to build proposals, apply price increases, and adjust for growth without the admin headache. Book a demo or drop us a message, and let’s get your pricing working for your practice’s growth, and for your future.
