Practice Development Articles

Intuit 2007 Rates Survey

Bookkeeping and Related Rates: Hourly Rates and Fixed Fees

By: Bill Teague

The 2007 Rates Survey from Intuit® ProConnection® comes from the biggest sample yet and is the most current information available on how you and your colleagues charge for basic services.

Executive Summary: We show continued upward pressures on all hourly rates for general bookkeeping and hourly services over the previous year. Average hourly rates increases range from $1 to $10 per hour. We also show increases in fixed fees for the most popular of such services, including software installation and setup, of $17 and $11 per engagement.

However, despite this upward pressure, the most common price points for each service remain virtually unchanged from 2006 to 2007. For example, the most common price points across hourly services are $50 per hour for bookkeeping and $75 per hour for all other services. These modal (or most frequent) price points are virtually unchanged from the previous year.

Increases in sample size and firm profile (especially number of clients) suggest better representation from mid-sized firms in this survey than in previous years. This may also account for some upward pressure on most rates. Consumer comfort level with certain price points - or perhaps practitioner's belief in consumer comfort level - may account for the most frequent price points remaining stable from last year to this.

Skip to Results on Hourly Rates.
Skip to Results on Fixed Fees.
More to Come.

Thanks for Your Response

First, thanks again to readers who responded to this survey. This was our most aggressive campaign yet for collecting information and we about tripled our response from last year. Over 1150 of you responded to our 2007 request, and we are contacting the two lucky winners of the 2G iPod nanos. (We will publish the names of the winners soon.)

How We Gathered the Information

In November and December 2006, Intuit® ProConnection® conducted a survey of its readers to identify what rates are being charged for selected bookkeeping, bookkeeping-related services, and tax preparation.

For this article we will look at the national perspective on both hourly rates and fixed fees in categories typically offered by practitioners.

How to Use These Numbers

This is not a scientific survey. Survey results depend on self-selected readers who responded to our request, and we do not attempt to verify the accuracy of the responses. But as an informal straw poll, this information could be very useful for practitioners looking at their current rates structure.

Wide Range

In bookkeeping, the highest hourly rates average almost 30 times higher than the lowest rates. For fixed fees in bookkeeping, the highest fees average over 50 times higher than the lowest fees. In tax preparation, the highest fees across types of returns averaged 80 times more than the lowest fees for the same returns.

Who Replied

More Mid-Sized Firms Represented. This year our November issue of the newsletter targeted ad mid-sized firms and an appeal for them to respond to the survey, which may account for increases in several directions this time. We see an increase in average client base and seniority this year, from 15 to 18 years in seniority and in client count from 244 to 308.

High Representation of CPAs. Our December issue was directed to practitioners in tax, and again we appealed to them to respond. As a result we have a higher representation of CPAs in this survey than ever before; over half of the respondents identified themselves as being a CPA. (Next month we will have more detail on a breakdown of these rates by professional designation.)

Hourly Rates vs. Fixed Fees in Bookkeeping. Again, more respondents - about eight out of ten - who offer bookkeeping services-tell us they charge all or some of their services by hourly rate. But the trend is inching toward fixed fee or value pricing. Last year nine out of ten practitioners said they were charging hourly rates for at least some of their services. And this year, three out of ten said they charged some or all services by fixed fee.

Looking Only at Fixed Fees in Tax Preparation. In this survey, we are able to report back only on fixed fees in tax preparation, typically by kind of return and or number of forms required. In future surveys we hope to do a better job of capturing hourly rates as well in a more systematic way. The majority of tax preparers who responded use fixed fees at least as a baseline, adjusting fees on the basis of complexity. By the way - almost eight out of ten respondents do both bookkeeping and taxes.

Clients as QuickBooks® Users

On average, respondents reported that 61% to 70% of their clients used QuickBooks to maintain their books. All but about three percent of respondents support at least a portion of their clients on QuickBooks. , and on average the respondents are supporting three out of four of their clients on QuickBooks.

Hourly Rates - A National Picture

Again this year we asked practitioners what rates they charged for major categories of service. In descending order of responses, the main activities for hourly rates are as shown:

• General Bookkeeping
• Non-software Business Consulting
• Generating Reports
• Software Installation and Setup
• Troubleshooting
• Training
• On-site Maintenance
• Telephone Consulting

Hourly Rates Overview Table

Response	General Bookkeeping	Non-Software Business Consulting	Generating Reports	Software Install/ Setup	Troubleshooting	Training	On-site Maintenance	Telephone Consulting
Count	750	701	670	666	662	652	601	524
Average	$61	$95	$73	$86	$82	$81	$81	$79
Low	$10	$15	$10	$15	$15	$15	$15	$10
High	$180	$350	$300	$1000	$300	$350	$350	$265
Mode (Most Frequent)	$50	$75	$75	$75	$75	$75	$75	$75

We look at each category in turn and show you what's changed from last year.

General Bookkeeping

General bookkeeping was the most common hourly activity of those identified, but one change this year from last was that almost every practitioner who offered hourly rates offered general bookkeeping. This year 81 percent of such practitioners offered general bookkeeping. We think this is because of a higher representation from mid-sized firms, where it is more common to work with clients who have a bookkeeper on staff or on call as a freelancer.

Regardless of other changes, rates stayed stable, with the average going up only one dollar, and the mode, or most frequent price charged, actually stabilizing at $50 an hour. In 2006 the amounts of $50 and $75 tied for the most common rate charged. (In 2005, the mode was $50.)

	2007	2006
Hourly Range	$10-$180	$15-$240
Average	$61	$60
Mode (Most Frequent)	$50	$50/$75 (tie)

Non-software Business Consulting

In another change from last year, the percentage of practitioners offering business consulting services increased decreased significantly, from 94 percent last this year to 76 percent this year.

While the average jumped by $10, the majority of practitioners pegged this rate at $75 an hour, just as in 2006.

	2007	2006
Hourly Range	$15-$350	$15-$240
Average	$95	$85
Mode (Most Frequent)	$75	$75

Generating Reports

Close on the heels of business consulting is the generation of reports. While again a smaller percentage of those who offer the services are represented in our survey (73 percent of those offering fixed fees, vs. 92 percent last year), the average rate climbed about 5 percent while the mode remained the same.

	2007	2006
Hourly Range	$10-$300	$15-$240
Average	$73	$69
Mode (Most Frequent)	$75	$75

Software Installation/Setup

Software Installation and Setup is a mainstay of many practices, although this category dropped in overall rankings as well as percentages. Last year this was the second most popular category of fixed fee services, representing 97% of the respondents who charge hourly rates. This year respondents represent 72 percent. As with almost all categories, we see upward pressure reflected in the average, with the mode remaining constant.

	2007	2006
Hourly Range	$15-$1000	$15-$240
Average	$86	$80
Mode (Most Frequent)	$75	$75

Troubleshooting

About tying with Software Installation, Troubleshooting represents about 72 percent of hourly respondents (compared to 92 percent last year). Again the average for rates is higher, with the most frequently charged rate the same.

	2007	2006
Hourly Range	$15-$300	$15-$240
Average	$82	$77
Mode (Most Frequent)	$75	$75

Training

Just under 71 percent of respondents offering hourly rates included training (compared to 95 percent last year), and again the average rate goes up five dollars from last year while the modal rate remains the same.

	2007	2006
Hourly Range	$15-$350	$15-$240
Average	$81	$76
Mode (Most Frequent)	$75	$75

On-site Maintenance

This year On-site maintenance took the biggest tumble in popularity; last year it ranked higher at 92 percent of respondents, compared to 65 percent this year. The relative ranking, however, in the next-to-last spot, remains stable. Almost by clockwork, the average rate again is five dollars higher than last year, while the mode remains constant.

	2007	2006
Hourly Range	$15-$350	$15-$240
Average	$81	$76
Mode (Most Frequent)	$75	$75

Telephone Consulting

Fewer respondents charge for telephone consulting than any other category, this year (at 57 percent) as last (at 80 percent). Optional comments from some respondents suggest many practitioners take a flexible approach to telephone work. Some don't charge for spending time on the telephone with clients, either because they want to maintain good will or because they have factored in the likely aggregate costs into their pricing for other categories. Others will take a first call and then begin charging for second and later calls. How practitioners charge for such work is often a tactical decision and reflects your service philosophy.

We see a bigger increase in the hourly rate - up eight dollars from the previous year - while the mode remains the same.

	2007	2006
Hourly Range	$10-$265	$10-$250
Average	$81	$73
Mode (Most Frequent)	$75	$75

Fixed Fees - A National Picture

How many practitioner charge fixed fees for selected services? Over 35 percent of respondents had some charges based on fixed fees; this has inched up a few percentage points from last year. Responding to categories provided by Intuit, practitioners shared their fees for the following services, listed here in descending order of popularity:

• Installation and Setup (New User)
• Quarterly Tune-Up
• Personal training (1-2 hrs.)
• Personal training (3-4 hrs.)
• Personal training (full day)

This was the same order as seen in previous years, and the level of participation among practitioners engaged in offering fixed fees ranges from 100 percent at Installation and Setup to over 80% in full day training.

Fixed Fees Overview Table

Response	Installation and Setup (New User)	Quarterly Tune-Up	Personal Training (1-2 Hrs.)	Personal Training (3-4 Hrs.)	Personal Training (Full Day)
Count	323	311	280	276	257
Average	321	246	153	287	565
Low	25	25	25	25	50
High	3000	1200	540	600	1500
Mode	250	150	150	200	500

Comments on where each category is trending are shown below.

Installation and Setup for New Users

Installation and setup services are most popular of fixed fee services, with all of the practitioners who offer fixed fees offering services in this category.

	2007	2006
Fixed Fee Range	$25-$3,000	$50-$1,500
Average	$321	$304
Mode (Most Frequent)	$250	$250

Quarterly Tune-Up

Almost all - 96 percent - of respondents offering fixed fees also offer a quarterly tune-up service. This percentage is up from about 88 percent a year ago.

	2007	2006
Fixed Fee Range	$25-$1,200	$25-$1,100
Average	$246	$235
Mode (Most Frequent)	$150	$150

Personal Training (1-2 Hrs.)

Training services were the next most popular category, with minor variation based on the length of the training. The categories of 1-2 hours, 3-4 hours, or full-day training have been used by Intuit in its previous surveys, and as before, the shorter the period of training, the more likely it will be offered by the relevant category of practitioners.

This year about 87 percent offer personal training at one to two hours in duration, almost the same as last year's 86 percent.

	2007	2006
Fixed Fee Range	$25-$540	$40-$35
Average	$153	$153
Mode (Most Frequent)	$150	$150

Personal Training (3-4 Hrs.)

When it comes to the next longer category, 85 percent (almost the same as last year's 86 percent) of fixed-fee practitioners offer such training.

	2007	2006
Fixed Fee Range	$25-$600	$75-$700
Average	$287	$294
Mode (Most Frequent)	$200	$300

Personal Training (Full Day)

This year about 80 percent offer day-long training on a fixed-fee basis. Last year the percentage was slightly higher, at 83 percent.

	2007	2006
Fixed Fee Range	$50-$1,500	$100-$1,400
Average	$565	$562
Mode (Most Frequent)	$500	$500

More to Come. Next month we will share more information on rates by designation, by regional distribution, by population density, and - where the size of the sample warrants - even by individual states. We will also share information on rates for tax preparers, who can use those rates and their experiences from this year to consider their rates for the 2007 tax year waiting over the horizon of their current activity in preparing 2006 returns.

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Bill Teague is Managing Editor of the Intuit ProConnection newsletter. For many years he was an Editor and Associate Publisher at Harcourt Inc., which published CPA Digest, Tax Accountants Weekly, and other publications for accountants.

Last Updated: 02/14/07