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News

Report: Most Accounting Firms Plan to Hike Up Fees in 2025 

By:
Karen Sibayan
Published Date:
Nov 8, 2024

 

Ignition’s 2024 US Accounting and Tax Pricing Benchmark report tackled the issue of accounting firm pricing and fee increases, which are needed for these firms to maximize revenue and profitability. Based on a survey Ignition conducted, over half of accounting firms plan to raise pricing across all services in 2025. 

The report offers accounting firms key insights into pricing models and what fees firms are now charging and planning to charge for a few of the most common tax, accounting and advisory services. It also provides firms with data so they can benchmark fees against the industry while learning strategies to navigate price increases. 

With the trend to hike fees, the report can give insights into whether accounting firms' current pricing is competitive or aligned with their pricing strategy. The answers were based on a survey of 345 accounting firms utilizing Ignition in the U.S.  

According to the report, heading into next year, many US accounting firms are re-examining their pricing strategies and deciding to increase fees for the services they offer, with close to 57% planning to increase fees next year for all services.  

As for the extent of these increases, Ignition said that the most common range is from a 5% to 10% increase throughout all services, which indicates that the shift to higher pricing is industrywide. Rising business costs are driving the decision for the fee hikes. Close to 58% of firms mentioned increasing costs as the primary reason. This shows that firms want to maintain profitability by adjusting prices to cope with inflation, wage increases and the general cost of running a business in today's environment. 

Notably, only 5% of firms said that they are increasing fees to boost revenue, demonstrating a possible gap in how firms leverage pricing as a strategic tool. Even though they need to cover operational costs, the finding indicates that these firms are not fully capitalizing on the chance to utilize pricing as a proactive driver for revenue growth.  

The report says that whether the goal is to manage higher costs, improve profit margins or introduce premium service offerings, firms are taking a more strategic approach to pricing services. Firms are clearly veering away from hourly billing and moving to fixed-fee and value-based pricing models, which signals a general transformation in how firms package and deliver services.  

With hourly rates dropping in popularity, this shift indicates a growing recognition that pricing should reflect outcomes and results instead of time investment. By adopting fixed-fee and value-based pricing, the report said that firms are positioning themselves to cover increasing costs while enhancing their client relationships, providing the clarity and value that establishes long-term trust. 

Aside from pricing insights, the report also serves as a resource to obtain practical advice for implementing price changes based on current trends and 2025 projections.