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How much should an accounting business charge in annual accounting/tax prep fees?


I'm doing a little research on accounting & consulting fees. I work for a nationwide niche firm that has about 1,500 accounting clients (including tax prep) averaging about 700-800K per year in operating revenue. I believe we are undercharging for our services. Our average accounting fees are about 1% of revenue or 7-8K per year on an average client. We do perform some other services like collections, payroll, financial planning, etc. on some clients raising the total amount to 1.2-1.3%. Do those seem like appropriate percentages? I'm curious what type of benchmarks others have in their accounting and tax businesses or if anyone knows of a good source of information for this type of thing. Any input would be much appreciated as I am looking to possibly buy this business in the future.

I can only tell you about business management - taking in all of the money and paying all of the bills, in addition to doing all of the tax work. The percentage that I am going to give you also would include insurance services (taking care of the insurance needs of the clients, such as automobile insurance, insuring valuables, etc.) These firms do not sell insurance; they handle all of the insurance matters for the clients, including dealing with insurance companies, brokers and agents, etc.

I know of firms that charge 5% of earned income - not net income. Some clients are also charged a minimum fee in addition to the five percent. Minimums can vary from $1500 per month and up (sometimes less for smaller clients who may not pay any minimum at all).

I am not familiar with your particular situation, in terms of exactly the types of services that you provide. I can tell you that what I have described above is accurate.

I hope that this helps.
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