As the global economy continues to battle inflation, rising interest rates and increasing labour costs, accounting firms are seeking new ways to remain profitable and build sustainable revenue streams. One of the most effective strategies? Ensuring your pricing is competitive.

A pricing strategy is essential to long-term viability and success, but knowing what to consider and when to introduce an increase in prices can be challenging. For accounting firms looking for guidance, Ignition’s 2024 Tax and compliance pricing benchmark report is a good place to start, says Dave New, managing director, APAC at Ignition, the leading revenue generation platform for accounting and professional services businesses.

“With 55% of accounting firms looking to increase prices across all services this year, our benchmarking report equips firm owners with valuable insights to guide and inform their pricing strategy in 2024 and beyond to boost revenue and profitability.”

Time for a lift

Based on a survey of 250 accounting firm decision makers, Ignition’s report shows that almost 28% of accounting firms across Australia charge between A$200 and A$250 for individual tax returns. Almost 35% charge between A$500 and A$750 annually for tax planning services, and close to 39% charge A$250 to A$350 for business activity statements. Meanwhile, more than 37% charge A$150 to A$250 for annual corporate compliance.

Reflecting on the report findings, Rebecca Mihalic FCA, businessDEPOT director and Ignition’s APAC head of accounting, notes that when it comes to tax planning a lift in pricing is a growing trend.

“This service has been steadily moving from a nice-to-have to a need-to-have and has been undervalued for years,” she says.

“If you’re really rolling up your sleeves to work with your clients on interim accounts and tax planning, you need to charge appropriately. For BAS, it appears the overall pricing hasn’t moved a lot in the last decade. I would have expected a greater percentage of firms charging more than A$250.”

Strategies for pricing success

Planning ahead is critical to an effective strategy. Some key considerations include using annual renewals as an opportunity to raise fees and giving clients pricing options.

“When re-evaluating pricing strategies, it’s critical for firms to factor in fee increases within annual client engagements and renewals, and leverage technology to make the process more seamless and eliminate any awkward client conversations,” says New.

Factoring in pricing increases upfront in the engagement terms is also a simple way to manage the process and avoids any surprises down the track.

“Platforms such as Ignition enable customers to easily incorporate fee increases within their engagement letter templates, as well as automatically increase prices when renewing client agreements,” says New.

Compare your firm’s pricing

Get insights on current fees and planned increases for common tax and compliance services. Download the 2024 Tax and compliance benchmark report now.

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Pricing trends for 2024

Many accounting firms are planning to increase prices for tax and compliance services by five or 10%.

· 55% plan to increase prices across all services

· 81% plan to increase prices for basic individual returns

· 87% plan to increase prices for company or trust annual accounts and tax returns

· 74% plan to increase prices for tax planning

· 55% plan to increase prices for annual corporate compliance

· 74% plan to increase prices for BAS.