Part of our complete guide to small business numbers.
It's not just a pricing detail
How an accountant charges shapes how they behave, not just what you pay. Hourly billing and fixed fees create genuinely different incentives, and most firms don't explain this clearly when you're comparing quotes. It's worth understanding before you sign up with anyone.
The problem with hourly billing
On paper, hourly billing sounds fair, you only pay for time actually used. In practice, it means every phone call, every "quick question" email, every small clarification has a cost attached to it. This creates a quiet but real disincentive to actually ask for help, exactly the opposite of what you want from an accountant you're meant to be able to rely on through the year.
Key point: Hourly billing rewards time spent, not outcomes delivered. A fixed fee structure rewards efficiency and predictability, because the accountant's incentive is to handle things well within the agreed scope, not to maximise billable hours.
Why fixed fees tend to serve clients better
- You know the cost upfront, no surprise bill at the end of the year for "extra time"
- Quick questions don't carry a meter, so you actually ask them, which tends to catch small issues before they become expensive ones
- The accountant's incentive aligns with yours, getting things right efficiently, rather than it taking longer being, perversely, more profitable for them
What to actually ask before choosing
Rather than just comparing headline prices, ask any prospective accountant:
- What exactly is included in the fee?
- What counts as "extra" and gets billed separately?
- Are quick questions throughout the year covered, or chargeable?
The answers reveal far more about the actual client experience than the headline number does. See our pricing page for how our fixed fees work, and what's included as standard.
Tired of watching the clock with your accountant? Book a free consultation and see what a genuinely fixed-fee relationship feels like, questions included, not metered.
Frequently asked questions
Why does it matter how my accountant charges?
Hourly billing and fixed fees create different incentives. Hourly billing rewards time spent, fixed fees reward efficiency and predictability, this can quietly shape how responsive an accountant is to quick questions.
Isn't hourly billing fairer because you only pay for what you use?
In theory, but it also means every email, call or quick question has a cost attached, which can make clients hesitate to ask for help when they need it, the opposite of what you want from an accountant.
Do fixed fees ever cost more than hourly billing would?
For a very simple, low-touch situation, possibly, but most businesses underestimate how much ad-hoc advice they'll actually need across a year, which is exactly what fixed fees are designed to make worry-free.
What should I actually ask a prospective accountant about fees?
Ask exactly what's included in the fee, what counts as "extra" and gets billed separately, and whether quick questions throughout the year are covered or chargeable, the answer reveals a lot about the actual client experience.