Firms can investigate more inventive pricing strategies
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Professional Insights

Firms can investigate more inventive pricing strategies

Feb 07, 2023 · 3 min read · AICPA Insights Blog

Economic headwinds have encouraged CPA firms to scrutinize their pricing to preserve margins. High inflation and the threat of a global recession have produced financially squeezed clients with shifting expectations for their accountants.

Rising to meet clients’ expectations presents new opportunities to lead in the marketplace. Firms can investigate more inventive pricing strategies that provide year-round tax advisory services and shift away from the tax-season-only focus.

For decades, providing clients with compliance-based deliverables, like tax returns and financial reports, has been the traditional accounting business model. An evolving economic landscape, however, has encouraged embracing a new business model for CPA firms.

With finance functions uniquely positioned to affect capital allocation and investment decision-making, pricing value appropriately is key to long-term success. Determining price value will include embracing cutting-edge strategies for value-based pricing and cloud-based technologies.

Jody Grunden, partner/head of Summit CPA Group at Anders CPAs + Advisorsin St. Louis, has used value-based pricing successfully for years. He shared that his firm has no billing arrears and said, “When we value prices, we look at the value we’re replacing. So, pricing our services, we’ll ask ourselves, ‘How much does an accountant cost? Sixty thousand dollars. OK, so maybe we’re a quarter of an accountant. That’s 15 grand there. How much does the CFO cost? We’re half a CFO and so on.’ This way, the client realizes the replacement value that they would have had to pay to hire these professionals.” Grunden found huge success introducing clients to the CFO package, converting most of his traditional tax return clients into monthly CFO service clients.

Two pricing models — flat rates and subscription-based billing — can help you develop new pricing strategies.

Flat rates

Also known as capped rates, flat-rate billing charges a single, fixed, upfront price at regular intervals for a recurring product or service. This model provides certainty to customers, telling them what to expect and how to budget. Flat-rate billing is straightforward and appeals to various demographics and people with strict budgets.

You could further incentivize flat-rate billing by offering a 10% discount to customers who pay their fees early. Chris Wittich, CPA, partner at Boyum Barenscheer in Minneapolis, implemented a flat-rate billing model. His firm collects fees through online billing, so they never send invoices. He emphasized this model’s benefit for clients and his firm. By informing clients of the flat fee and the 10% discount, Wittich said at least a third of his clients paid early.


With a subscription-based model, clients pay on a regular basis (such as monthly) for a service or product. Clients usually like subscriptions because they mean low upfront costs and manageable payments. Subscriptions can also be automatically renewed, giving you predictable revenue and more long-term clients.

Wittich said his firm’s shift to a subscription model provided a seamless transition for moving from tax-only to advisory services. Wittich said, “For us, the shift is from only doing the tax return … if you’re in the subscription service, we’re going to do everything for you … So, we’ve defined what everything is, and it’s not [just] bookkeeping, but it’s tax planning in the fourth quarter, doing your tax return in the first quarter and then an advisory project in the second and third quarter, and so on.” His firm assured clients, “You’re going to pay us monthly, but we are going to be consistently delivering value throughout the year in these different ways.”

Grunden and Wittich found that, after explaining the value of subscriptions as compared to a traditional flat-fee model, their returning clients were happy to sign up. This strengthened business relationships and allowed their firms to do the following:

  • Clarify the price by communicating the value creation through Business Model Engagement.

  • Inform clients of the replacement value of subscriptions compared to hiring separate accounting professionals for each service your firm provides.

  • Try the subscription model with a few clients first, perhaps new clients, as a pilot program.

Take the plunge and make the shift

By adopting either of these pricing models alongside existing billing models, you can better serve your current clients and attract new ones.

As you consider your options, you can learn more about pricing models that enhance a financially rewarding year-round tax advisory service with the previously recorded discussion: Reimagining Your Tax Practice — Session 3: Pivoting Your Business Model.

Miti Ampoma, FCIPR

Miti Ampoma is a senior content writer at AICPA & CIMA, together as the Association of International Certified Professional Accountants.

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