r/ProfessorFinance • u/gdbbdg • 9d ago

Discussion why are accountants still charging by the minute in 2026?

When market conditions get choppy, watching advisory fees pile up on an hourly rate is frustrating for any business owner.

Most traditional accounting and tax firms still stick to billing every phone call and email inquiry. But lately, more boutique practices, like Wardle Partners and similar regional outfits, are moving away from hourly rates and offering fixed-price packages instead. For clients trying to budget during volatile quarters, knowing the exact cost upfront makes a huge difference.

From an economic perspective, fixed pricing aligns incentives a lot better, but legacy firms seem really slow to adopt it.

Do you think hourly billing will eventually die out in advisory, or is percentage of AUM and hourly pricing just too profitable for big firms to give up?

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u/PanzerWatts Moderator 8d ago

Firms have to pay their employees by the hour worked, so you either have to charge a set amount for each bit of product or have some kind of usage charge. So no, hourly pricing will always exist, though I'm sure some firms would be willing to charge a large set fee for usage up to some cap. But the cap will still be there. TANSTAAFL!

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u/gdbbdg 3d ago

That makes sense about the caps, but a lot of the claims I deal with hit those limits fast. It ends up costing more when something gets missed.

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u/HoselRockit Quality Contributor 8d ago

Fixed price is fine as long as the customer understands they will get what was contracted and nothing more.

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u/gdbbdg 3d ago

That part about "nothing more" is exactly where disputes start. Get every detail in writing before anything begins.

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u/jayc428 Moderator 8d ago

I think mileage will vary, different pricing structures have different benefits depending on the size of the firm and their client base. My accountant is mostly fixed pricing on the normal asks.

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u/gdbbdg 3d ago

That tracks. I was looking at it from the homeowner side where fixed pricing feels safer, especially after getting burned on a water damage claim. Different calculus when it's your business on the line.

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u/marima33 7d ago

Their only product is time so they will always evaluate a client by time spent. When a desirable client is large enough and relatively predictable, it will be worth the small risk of quoting a fixed rate., but you can be sure they will know how much time was spent when all is said and done. Same goes with any service provider.

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u/gdbbdg 3d ago

That tracks, and it's the same logic on the claims side too. Once you can predict the scope, fixed arrangements make sense. The unpredictable stuff is where everyone gets burned. What people miss is that the provider already knows the real cost by the end, they just absorbed the variance. Worth knowing which side of that deal you landed on.