Have you just started an accounting practice and are unsure how much to charge? At the start, many of your clients may be small business owners, so it’s important to set prices they can afford. At the same time, you want your business to be able to make a profit. 

This guide will focus on how much accounting should cost for small businesses, answering the following questions:

  • Why have pricing models changed?
  • How much should accounting cost for small businesses?
  • What methods can I use to set my fees?
  • How do I choose the right pricing strategy?
  • How can Countingup help me win clients?

Why have pricing models changed?

Accounting prices are increasingly based on how effectively firms leverage technology like cloud computing or AI to streamline transactions. 

The introduction of Making Tax Digital will likely accelerate this trend as clients expect accountants to have systems that support digital tax filings. As more firms adopt modern technology, the competitive edge will lie in how efficiently and accurately a firm’s internal systems process these records.

With technology taking over the number-crunching, forward-thinking accounting firms may future-proof their companies by reinventing themselves as advisors. This way, firms can offer more lucrative services such as financial management, cash flow forecasting, business planning and even accounting software recommendations.

How much should accounting cost for small businesses?

Below we’ve listed rough estimates for what small businesses can often expect you as an accountant to charge them:

General accounting

For smaller businesses, accountants charge anything from £60 to £250 depending on the client’s annual turnover, the depth of service and location. Bigger companies with more employees generally need more work, meaning you can charge more for your services.

Self Assessment 

Accounting firms often charge set fees for Self Assessment tax returns, which can range from £150 to £250 and over, depending on the complexity and scope of the client’s finances. Fees up to £250 should cover basic Self Assessment services. However, if a client requires more complex tax returns (as self-employed people with unpredictable incomes may), that means more work for you and should result in a higher fee for them.

Hourly charge

Accountants performing basic accounting services will usually work for between £25 and £35 per hour. However, as with the points above, if a client needs specialist services that take more time and effort, you can charge up to between £125 and £150 per hour.

What methods can I use to set my fees?

There are plenty of ways that accounting firms can proceed when looking at pricing options, including:

Fixed fee pricing

Fixed prices remain the same no matter how much time and resources you devote to a project or task. This approach works best for more basic and repetitive tasks like preparing tax returns. More complex projects risk needing more time and effort than you planned for, meaning you might do double the planned work for the same price.

Cost-plus pricing

This strategy is similar to fixed pricing, except you also factor in an additional cost that will help you make a profit. The best way to do this is to calculate how much it costs to complete the service your client needs and add a small percentage to the price. Don’t add too much, or clients might view you as greedy.

Value-based pricing

This approach involves you setting the prices for a service based on what the client is prepared to pay. Value-based pricing can work well for advisory services where clients may be willing to pay a premium for working with more experienced professionals. 

If you’re new to accounting, you could use value-based pricing to attract your first clients, especially small businesses that may have limited funds. While you might make less money starting out, you’ll gain valuable experience that’ll help you reel in bigger, more high-paying clients later.

Competition-based pricing

You can also set your prices based on what your competitors charge for their services. Your practice could stand out in the crowd by:

  • Providing an equivalent service at a lower price.
  • Providing a more well-rounded service or experience at a price equal to your competitors.
  • Charging slightly more but providing a superior service.

Stay on top of industry trends, keep an eye open for how your competitors might change their approaches and be prepared to change strategy to help your business maintain its edge. 

Monthly retainer

Monthly retainers are good for covering ongoing services, such as bookkeeping and compliance tasks. This approach adds a level of predictability around recurring revenues and cash flows that you may find comforting. You can always try expanding your service offering for a modest fee to increase your revenue and deepen the client relationship.

How do I choose the right pricing strategy?

Before choosing a pricing method, think about how you like to work and your practice’s values. Base the structure of your fees on the essence of your businesses.

For example, if you pride yourself on being open and transparent, you can expand that idea into a value-based fee structure that gives clients a clear view of what they’re paying for.

However, if you market your practice as a simple and painless solution, you can back that claim with a fixed pricing structure with no surprises.

Or do you prefer working with wealthy clients who will pay top dollar for exceptional service? Either choose a value-based structure or cost-plus pricing to help bring in that extra cash. 

Remember that clients who expect premium services will look for premium prices. If these are the clients you want to target, you could include a premium package alongside your normal rates.

There are many ways to set your prices, but when done well, your pricing could become a feature that clients view as an advantage rather than a simple cost.

Improve profit margins with Countingup

You can save your practice time on manual admin and help your clients keep organised records with Countingup’s free accounting software, built specifically to help you manage your self-employed and sole trader clients.

The Countingup business current account and accounting app automates time consuming bookkeeping admin for your clients so they can focus on running their business – and send you accurate, structured data to work from. With instant invoicing, automatic expense categorisation and cash flow insights, your clients will be able to confidently keep accurate bookkeeping records everyday.

Countingup’s accounting software is MTD-compatible and full of features for you to review and manage client accounts efficiently, with direct access to their real-time organised data. Find out more here.


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