Fee increases hit you again, huh? This time it’s from your business’s accounting service.
Even if you don’t push back, you may be wondering why an accounting service would even need to raise its fees. Is something cutting into its margins? Is the service providing more work? Is it something you did?
When it feels like everything around you is becoming more expensive, you need your financial partner to justify why they’re increasing the bill. Let’s talk about why that might be happening!
At CSI Accounting & Payroll, we’ve provided small business accounting for nearly 60 years. That means we know a lot about what drives the industry’s prices. Let’s discuss:
- What drives business accounting industry prices up
- What you may be doing that drives your fee up
Industry Price Increases
We recently wrote an article about what drives the accounting industry prices up and down. Here’s a summary of what drives the prices up:
- Inflation. This can apply to most expenses, cutting into profit margins. (ex. Office leases, utilities, software)
- Labor costs. Recruiting an accountant can cost over $20,000, and this is made worse because of a shortage of accountants.
- Technology costs. It’s expensive to keep up with rapid technology advances, which are required to keep your data safe.
- Compliance requirements. There are ever-increasing tax laws to study and financial documents to be completed.
- Service customization. Some accounting services handle anything their clients request. This sounds great at first, but it drives up costs for all clients.
These apply industry-wide, but every client has a different accounting fee. If only your fee increases, it may be due to changes in your business. That’s what the next section is about!
Individual Fee Increases
If you’re notified privately that your fee is increasing, your accounting service should also tell you why that’s happening. (If they don’t tell you why, that’s a major red flag! You don’t want to work with a service that doesn’t value transparency.)
Have no idea why your fee increased when others’ fees didn’t? We can’t speak for other services, so here are some reasons why we would increase a client’s fee.
We base the pricing of our monthly accounting service on two things: the average number of business transactions per month, and the complexity of the work.
Every six months, we re-examine our clients’ data to see if their fee is still sitting in an accurate range. That means we would increase the fee if the average number of monthly transactions increased (more than just a little bit), or if a complexity point was added on.
Now, most complexities are already established when you start with an accounting service, but you can add more complexity points by:
- Opening another location and wanting it to have its own monthly financial statements.
- Opening another location in another state.
- Adding accounts payable (A/P), accounts receivable (A/R), and/or inventory to your Balance Sheet.
- Adding on sales tax management.
- Switching your payroll to a different provider.
- Opening new business bank accounts, credit cards, and/or loans.
Minimize Your Fee With a Transparent Service!
Want to keep your fee as low as possible? Start simple: avoid these things that can increase your accounting fee, and work with a service you can trust! We always tell clients that the easiest ways to save with us are to consolidate their accounts and bundle services.
Now that you know what drives industry prices up and what drives individual fees up, are you ready to check out monthly accounting services with CSI Accounting & Payroll?
To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, get your custom investment by using our free pricing calculator.
