With more accounting firms recognizing the higher revenue potential of offering advisory services, many are starting to explore this new territory. But one tricky question comes up almost immediately: how do you price accounting advisory services?
In this beginner’s guide, we are going to cover-
-> Key elements you must consider
-> Pricing models
-> Action Plan
Let’s Dig In!
Advisory work is more than transactional; it’s about creating value and insight that help clients make smarter financial decisions.
Also, Accounting Advisory work, unlike compliance, is more directly influenced by economic ups and downs. Right now, many large firms are seeing this firsthand—advisory departments are being hit with layoffs simply because there isn’t enough work to go around. When the economy is strong, clients are willing to spend a bit more freely.
This shift in client spending habits means advisory work can carry more risk in a downturn. However, there’s a way to hedge against it: build a strong digital presence and personal brand in the accounting industry. With a solid digital marketing strategy and an authoritative brand, you position yourself as a go-to expert for your target clients.
The pricing, therefore, needs to reflect the unique, strategic, and ongoing nature of this service. The pricing needs to hit a perfect balance to make the services attainable for your target market. At the same time, pricing should be high enough to give you the desired profitability and room for growth.
There are more factors to consider making sure that pricing is right for your accounting advisory services.
Ready to launch your accounting advisory services? Start by defining your pricing strategy today!
Unlike traditional compliance services, where pricing models are pretty set, advisory work opens up a lot more flexibility. That said, what works for one firm might not work for another, so be prepared to test and tweak until you land on a pricing strategy that resonates with your clients and fits your service delivery model.
To help you get started, here are a few universal steps and rules to keep in mind.
Many accounting firms fall into the trap of pricing based on billable hours, but advisory services don’t fit well within this model.
Here’s why: billable hours focus on time, not value.
Clients don’t necessarily care how many hours you spend; they care about the outcome you deliver. Spending hours calculating tax strategies or offering financial insights shouldn’t be seen as just “time” spent but rather as expertise that translates to real-world benefits.
So, what are some alternatives?
Let’s dive into a few options:
What it is: With value-based pricing, the price reflects the impact of your work on the client’s bottom line. For example, if your tax strategy saves the client $50,000 annually, your fee could be based on a percentage of that saved amount.
Why it works: Clients understand they’re paying for results, not hours. You’re demonstrating the real, tangible outcomes of your work, which aligns with the value they receive.
What it is: The subscription model involves charging clients a monthly or quarterly fee for ongoing advisory services.
Why it works: This model provides predictable revenue for your firm and gives clients consistent support.
For example, clients might pay a set monthly fee for outsourced CFO services, which include monthly reports, cash flow management, and strategic planning sessions.
What it is: Fixed pricing means setting a predetermined price for each service or package, allowing clients to know exactly what they’re paying upfront.
Why it works: Fixed pricing creates transparency and predictability, which clients often appreciate. For instance, you could offer a tax advisory package focused on reducing tax liability for a fixed fee, allowing clients to understand the cost from the start.
Choosing the right advisory services to offer is crucial, as you want to ensure these services are high-value, in-demand, and align with your strengths.
Here’s how to approach it:
Start by looking at the compliance services you already offer. Advisory services should feel like a natural extension of your existing expertise. For example, if you’re already handling tax compliance, you might consider adding tax planning as an advisory service. This way, clients get a more holistic package, and your team leverages its current skills.
Think back to the last few months of client calls.
Did you give valuable advice for free? Did clients ask questions that hinted at a need for advisory services?
For example, if clients frequently ask how to manage cash flow better, these could be areas where advisory services would be valuable.
Reflect on your experience. Are there areas where you can offer unique insights?
For instance, if you have experience in real estate, you could provide advisory services focused on wealth-building strategies for real estate investors. The goal here is to select services where you shine and have in-depth knowledge.
Advisory services ultimately aim to help clients reach their goals—whether that’s saving on taxes, building wealth, or boosting profits.
And unlike compliance work, it’s easier to frame these services with a clear return on investment (ROI). For instance, you might say: “With my tax advisory service, I’ll show you how to save $X in taxes. In return, you’ll pay me $Y.” Or for outsourced CFO services, you could say, “I’ll work with you to increase your net profits by X% annually.”
Need help picking your first advisory service? Schedule a call
The More Specific, The Higher the Revenue
Niche focus is a powerful strategy when offering advisory services. By honing in on a specific industry or business type, you become a specialist rather than a generalist—and specialists can command higher fees.
Here’s why this works:
When you focus on a specific niche, you gain deep knowledge of the unique challenges and opportunities within that industry. This expertise allows you to provide tailored advice, which clients are willing to pay a premium for.
Suppose you decide to specialize in advisory services for healthcare practices. By focusing on this niche, you can offer insights into revenue cycle management, cash flow optimization, and tax strategies unique to healthcare providers. Clients recognize this added value and view you as a strategic partner, not just an accountant.
Once you’ve identified your niche, start building your presence.
Publish content showcasing your expertise with variety of content—that addresses the specific pain points and goals of clients in this industry. Over time, this content builds your credibility, so when prospective clients need advisory services in your niche, they think of you first.
Even with all the right pricing and services in place, one critical element remains: clearly communicating the value to clients.
Advisory services can be complex, so clients need to understand exactly what they’re getting and why it’s worth the investment.
Make sure clients know what your service involves and how it benefits them.
For instance, if you’re offering tax advisory services, break down the process for them: “I’ll analyze your financials, identify tax-saving opportunities, and provide a plan to reduce your tax liability. The goal is to save you money and give you peace of mind.”
Clients may not always see the immediate value of advisory services, especially if they’re used to transactional services. Frame the service around specific, tangible results.
For example, if you’re providing a monthly dashboard review as part of a CFO service, explain how this will bring them financial clarity and better decision-making.
Communicating the ROI and long-term value of your advisory services helps clients see it as an investment in their future, rather than just an expense.
Related Read – CAS vs. CAAS in Accounting: What is Better?
Here’s a step-by-step action plan to get started with your advisory services, incorporating the approach you read but with a tailored structure and new numbers.
This plan will help you test, refine, and scale your pricing over time.
Action:
Outline a basic scope of the advisory service you want to provide. Think about what common issues your clients face and the areas where you can add the most value, such as cash flow planning, tax strategy, or profitability analysis.
Example Scope:
Action:
Identify 10-20 clients who would benefit most from your advisory service. This can include a mix of existing clients and a few new prospects if you’re able to bring them on board.
Action:
Over the next 12 months, track the actual time you spend on delivering this advisory service for each client. Keep detailed notes on time spent on each task, meeting, and follow-up.
After 12 months, calculate the average time it takes to deliver this service per client annually.
Example Calculation:
Let’s say the service took 12 hours over the year for each client.
Action:
Decide on an initial hourly rate that makes sense for your business and aligns with the value you’re providing. Let’s assume you’re targeting $300 per hour as your baseline rate for advisory work.
Initial Pricing Calculation:
12 hours x $300 per hour = $3,600
So, your initial price for the service will be $3,600 per year.
Action:
Offer your service at $3,600 per year to the selected clients and track how they respond. Are clients willing to pay this price? How easily are you able to close deals at this rate?
Action:
After 6 months, if you’re closing deals comfortably at the $3,600 rate, raise the price to $4,200 per year (around a 15% increase).
New Pricing:
$4,200 for 12 hours of advisory work annually
Evaluate Market Response: Monitor client reactions and the ease of closing deals at this new price. Note any pushback or pricing sensitivity among clients.
Action:
After an additional 6 months, if your close rate remains high, increase the price again to $4,800 per year. This incremental approach will help you identify the price clients are willing to pay without overextending too quickly.
New Pricing:
$5.000 for 12 hours of advisory work annually
Continue testing this pricing strategy, keeping an eye on close rates, client satisfaction, and value delivered.
By following this step-by-step approach, you can start with a manageable pricing structure, test client response, and gradually increase pricing based on market acceptance and demand.
Each increase allows you to refine the scope of your service, focus on high-value clients, and maximize your revenue potential while maintaining client satisfaction. Good luck with your advisory journey!
Pricing accounting advisory services doesn’t need to be complicated, but it does require a strategic approach.
By moving away from billable hours and embracing models like value-based pricing, subscription services, or fixed fees, you can ensure clients see the true value of your work.
Choosing the right services, focusing on a niche, and effectively communicating the benefits to clients are all essential steps.
Advisory work allows you to deliver a meaningful impact to clients’ financial well-being, turning you into a trusted advisor rather than just a service provider.
With the right approach, advisory services can elevate your accounting practice and create long-lasting client relationships—and more consistent revenue for your firm.
Credfino is an offshore staffing partner for accounting and tax firms based in the US and Canada. But our service suite is not limited to that.
We also help firms transition into modern accounting firm by upgrading tech stack, fixing pricing models, and also navigating from compliance to advisory.
Jackie launched her CPA firm back in 2012. After 11 years of running her firm, she finally made the leap to partner with an offshore CPA back office. Why?
If your offshore tax accountant is doing these 7 things, it’s time for a break-up because you are not in a healthy offshore accounting partnership.
Offshore tax prep seems like a logical solution to fill the gaps, but what does it really look like in practice?