Billing rates are important whether you are just starting your own CPA, accounting or bookkeeping firm or have been in business for years.  If your rates are too low, then you’re leaving money on the table and it can be difficult to increase rates later.   If you set your rates too high (based on your area, credentials, or other factors), then it may be hard to obtain new clients.  So how do you know if your billing rates are too low or too high?  What is the average billing rate for accounting services, payroll, tax, QuickBooks consulting, business consulting or personal financial planning services?  The good news is several thousand accounting professionals responded to the 2013 Average Billing Rate Survey to help provide some insight into these questions. 

In the last blog post, I shared what QuickBooks ProAdvisors Charge for their Services along with the national averages (US) for hourly billing rates and fixed fees based on the results of the Average Billing Rate Survey.  In this post we’ll dive deeper to look at the average hourly rates based on professional designation and geographic areas.  Plus, for the first time we have average billing rates for Canada (including a breakdown by province), United Kingdom, Australia and other international countries.  (note there were fewer replies for countries other than the US).

Designation

As expected, the average hourly billing rates are higher for people with a certification or designation.   For example, the rates for a CPA are quite a bit higher than rates for an accountant.  Similarly, the rates for a Certified ProAdvisor are higher than the rates for an accountant or bookkeeper.  Getting certified or earning additional designations (like an EA), not only increases your skills and knowledge, but you can (and should) increase your billing rate.

	Accounting	Payroll	QuickBooks Consulting	Business Consulting	Tax	Personal Financial Planning
CPA	89	80	102	135	126	119
EA	73	65	85	105	122	96
Certified ProAdvisor	66	60	87	93	88	62
Accountant	65	59	77	90	89	63
Bookkeeper	52	49	66	64	58	33

 

Population Density

As expected, the average rates in urban (large cities) are higher than the rates in rural areas.  However, for most services, there isn’t a big difference.  This may be due to the cloud and technology – with QuickBooks Online, remote access or hosting, accounting services are not limited to a specific geographical area any more.

	Accounting	Payroll	QuickBooks Consulting	Business Consulting	Tax	Personal Financial Planning
Urban (dense)	66	61	84	98	95	70
Mid-sized City	65	58	79	94	92	70
Suburban	62	56	76	92	86	53
Semi-rural	54	50	67	72	80	54
Rural (sparse)	60	57	74	78	86	64

State

Next we will look at the average hourly billing rates by state.  The states in bold received the most replies.  For the other states, keep in mind that there were not a large number of replies.

	Accounting	Payroll	QuickBooks Consulting	Business Consulting	Tax	Personal Financial Planning
AK Alaska	73	69	99	147	225	188
AL Alabama	63	50	87	93	74	56
AR Arkansas	59	55	77	89	97	67
AZ Arizona	57	60	72	104	80	40
CA California	68	65	84	104	105	82
CO Colorado	59	59	78	98	84	67
CT Connecticut	59	58	96	103	92	11
DC District of Columbia	58	58	65	N/A	65	N/A
DE Delaware	63	49	77	73	97	40
FL Florida	64	61	76	93	94	63
GA Georgia	61	60	87	102	86	71
HI Hawaii	58	20	75	60	52	N/A
IA Iowa	58	61	71	98	120	N/A
ID Idaho	64	61	75	96	110	N/A
IL Illinois	68	64	80	93	123	96
IN Indiana	66	67	69	79	82	75
KS Kansas	57	53	76	90	94	15
KY Kentucky	62	53	88	132	78	110
LA Louisiana	62	63	88	99	69	68
MA Massachusetts	61	39	86	81	77	29
MD Maryland	71	57	79	111	79	81
ME Maine	39	49	56	73	65	13
MI Michigan	52	56	74	91	94	76
MN Minnesota	52	41	68	66	63	28
MO Missouri	81	77	85	112	108	82
MS Mississippi	65	71	56	106	95	163
MT Montana	43	45	53	50	67	33
NC North Carolina	56	47	65	81	79	46
ND North Dakota	50	50	50	95	95	95
NE Nebraska	56	53	69	82	133	15
NH New Hampshire	43	36	51	53	70	N/A
NJ New Jersey	70	46	83	67	88	27
NM New Mexico	66	51	79	86	77	19
NV Nevada	89	44	115	119	86	15
NY New York	66	59	81	91	119	98
OH Ohio	56	56	68	66	83	59
OK Oklahoma	73	74	84	120	126	94
OR Oregon	52	53	60	77	92	76
PA Pennsylvania	60	50	73	80	82	31
RI Rhode Island	87	N/A	74	94	150	N/A
SC South Carolina	66	59	60	74	71	55
SD South Dakota	54	54	79	66	25	42
TN Tennessee	70	66	76	103	91	96
TX Texas	73	67	80	93	104	63
UT Utah	69	62	99	109	109	111
VA Virginia	81	83	88	112	102	93
VT Vermont	56	69	91	68	67	83
WA Washington	69	61	78	95	107	76
WI Wisconsin	59	52	67	90	76	21
WV West Virginia	40	50	50	25	N/A	N/A

Regions – Including International Countries

Another way to look at the average billing rates is by region (US regions above the line in the chart below).  Respondents selected their region so it is possible people from the same state selected different regions.

Also, for the first time (for the Intuit Average Billing Rate Survey), we have some average rates for Australia, Canada, United Kingdom and other international countries.   However, the number of replies was much smaller than for the US.

	Accounting	Payroll	QuickBooks Consulting	Business Consulting	Tax	Personal Financial Planning
Atlantic	74	64	87	109	107	77
Central	60	56	62	63	83	28
East Coast	60	49	77	76	81	41
Midwest	61	59	75	92	94	72
Northeast	62	53	77	86	89	38
Northwest	59	56	74	89	99	77
South	60	58	72	79	75	46
Southeast	65	60	78	97	89	79
Southwest	71	65	86	104	96	64
West Coast	69	64	87	105	107	84
Australia	79	60	89	103	65	N/A
Canada	46	44	64	72	59	47
United Kingdom	46	47	54	76	68	N/A
Other International Country	62	44	63	77	91	81

Canadian Provinces

Again, the number of replies for the Canadian provinces is much smaller.

	Accounting	Payroll	QuickBooks Consulting	Business Consulting	Tax	Personal Financial Planning
AB Alberta	57	57	63	69	67	30
BC British Columbia	40	43	58	69	52	38
MB Manitoba	49	43	105	65	60	68
NB New Brunswick	35	35	35	35	0	0
NT Northwest Territories	68	50	105	120	45	0
NU Nunavut	85	10	80	80	110	20
ON Ontario	44	43	73	75	61	74
QC Quebec	80	47	55	58	45	N/A
SK Saskatchewan	40	40	N/A	40	N/A	N/A
YT Yukon	40	40	N/A	N/A	N/A	N/A

Additional Comments

The average billing rate survey is informative and helpful for accounting professionals.  I hope the results will help encourage some people to increase their rates (which you should do every year anyway) if they are too low currently.  I hope people will realize the value of the services you provide and charge clients accordingly.

Beware of the client who is looking for the cheapest price – they are not the type of client you want or need.  As soon as they find someone cheaper they will leave anyway.  Keep in mind that not very client is a good client.

Value pricing (some people call it fixed fees) is increasing in popularity among accounting professionals.  As technology and tools become available to help us move from data entry to data management and analysis, we need to embrace value billing.  Register for my free webinar on value pricing to help you learn more about it and implement it in your practice.

Disclaimer

To the best of our knowledge, the Intuit Average Billing Rate Survey is the largest ongoing survey conducted among QuickBooks practitioners and other accounting professionals on the rates they charge.  You are encouraged to use the survey results as one of the many resources you use when deciding how to structure your rates and fees.

The Intuit Average Billing Rate Survey is an informal, web-based straw poll which provides us a large sample (thousands of replies).   However it was evident some people entered hourly rates for the fixed fee question.  Plus some people entered a range of billing rates (like 65 – 85).  Replies which could be clearly identified were cleaned up to provide better results.  However, some inaccurate replies could still be included in the results.  Thus, the results are helpful but unscientific.

Also, trying to compare the results between years isn’t perfect.  The respondents for the surveys over the years were different.  Plus, the questions were changed somewhat over the years.

To the best of our knowledge, this is the largest ongoing survey conducted among QuickBooks practitioners and other accounting professionals on the rates they charge.  You are encouraged to use the survey results as one of the many resources you use when you decide how to structure your rates and fees.

This blog post originally appeared on Intuit’s Accountant’s News Central.