
I have been a tax advisor for fifteen years. I have seen countless firms make the same famous mistake over and over again: sticking with old pricing models that slowly and silently devour their profits. I did not realise until I dived into analysing some data from our firm that we also left more than $100,000 of revenue unclaimed in a year just for the same reason. The problem? Conventional hourly billing and unyielding service packages that do not pay heed to our actual value.
Still today, most tax practices continue to use time-based billing or one-size-fits-all standard packages, thinking these approaches are “safe” and “predictable.” Conventional wisdom is hurting you more than you realise. Implementation of Figsflow’s pricing software for tax advisers finds some shocking inefficiencies in our pricing structure, which had become invisible with the passing of time.
For instance, because we had only loosely calibrated our pricing according to complexity, high-net-worth clients with intricate tax situations were, in effect, subsidising relatively straightforward tax returns. Under hourly-rate models, we were actually penalised for working fast and well; the more efficient and skilled we became, the less we earned per client.
The real issue is far deeper than the numbers. Traditional pricing models disregard essential value drivers such as:
Risks mitigated
Industry insider knowledge
Strategies for tax planning
Availability for consultation year-round
Management of highly complicated compliance
That was the real wake-up call. When we analysed competition through our pricing software, we found that firms using value-based and dynamic pricing models were achieving 40 percent higher revenue per client while enjoying higher satisfaction rates. They did not merely charge higher fees; they articulated and delivered their value better.
A sea change happened when the company moved from a mindset of “one-size-fits-all.” AI pricing tools were put to work upon a multitude of variables: industry of the client, complexity of the transaction, seasonal demand, and market positioning. This was jaw-dropping. Within a single tax season, we had:
An average client value increase of 35%
A 60% reduction in scope creep
Improved profit margins by 28%
Improved client satisfaction scores
For tax practices that are serious about growth, to still cling to traditional pricing is one thing; to continue doing so is sheer financial recklessness. For every day that passes with those old pricing models, you literally watch income slip through your fingers. The market has changed, and clients will pay top dollar for top-notch service—provided you have positioned it and priced it right.
You basically have two options: alter your pricing strategy or sit back and watch your profits gradually erode. Intelligent pricing today is no longer just a matter of rate-setting; it’s about building a sustainable, profitable practice that actually represents your expertise and value in the marketplace.