How We're Building an Accounting Firm That Prioritizes Both Profitability and Freedom

When my business partner, Austin Alwell, CPA, and I started our firm, we had a simple question:

How do we build an accounting firm that is both highly profitable and gives us—and our team—the flexibility we actually want?

After our first tax season, we learned that the answer isn't working more hours or selling more advisory.

It's designing the firm intentionally.

Every pricing decision, every engagement, and every workflow should make life easier for both the client and the team.

Here are some of the biggest lessons we've implemented.

We Only Prepare Business Tax Returns If We Own the Books

One of the biggest realizations from our first tax season was this:

Clean books create smooth tax seasons.

Messy books create expensive tax seasons.

When another bookkeeper maintains the records, we spend far too much time cleaning up transactions, correcting classifications, chasing missing information, and explaining why the financials don't reconcile.

None of that creates value for the client.

It simply creates frustration for everyone involved.

That's why we've made a simple rule:

If we're preparing a small business tax return, we want to own the bookkeeping.

When we control the books throughout the year, tax preparation becomes significantly more efficient, more accurate, and far less stressful.

The client receives better financial information all year—not just at tax time.

Monthly Billing Creates Better Relationships

We've also become strong believers in recurring monthly pricing.

Instead of billing separately for bookkeeping, tax preparation, and occasional questions, we bundle services into one predictable monthly fee whenever possible.

Clients know exactly what they'll pay.

Our revenue becomes more predictable.

And our conversations shift away from invoices and toward helping clients run better businesses.

Fixed-fee pricing also aligns incentives.

Instead of being rewarded for taking longer, we're rewarded for becoming more efficient.

That's a much healthier business model.

Annual Repricing Is Essential

One mistake I see firms make is treating fixed pricing as permanent pricing.

Businesses change.

Clients grow.

Services evolve.

Pricing should evolve too.

Every year, we re-engage every client.

That gives us the opportunity to:

Update the scope of work

Adjust pricing based on the current engagement

Remove services that are no longer needed

Add services the client has grown into

It keeps expectations clear on both sides and prevents pricing from slowly drifting away from reality.

Why We Collect Tax Preparation Fees Up Front

One of the biggest changes we've made after our first tax season is collecting tax preparation fees before the work begins.

Originally, we required a 25% deposit.

In theory, that sounded reasonable.

In practice, it created two separate collection events, additional payment processing fees, and more administrative work for our team.

Now we collect 100% of the agreed-upon tax preparation fee upfront.

That approach has several advantages.

Clients know exactly what the engagement costs before work begins.

They aren't receiving our invoice at the same time they're receiving a tax payment due to the IRS or their state.

Collections become almost effortless.

And because payment has already been handled, our team can stay focused on delivering great work instead of chasing invoices.

There's another benefit that often gets overlooked.

When clients have already invested financially, they're generally more responsive during the engagement. They return documents faster, answer questions sooner, and stay engaged throughout the process.

That makes the experience better for everyone.

The Mid-Year Client Problem

There was one issue we couldn't quite solve.

What happens when a bookkeeping client starts in June?

Or September?

Or November?

We wanted every client to have one clean monthly fee that included tax preparation.

But if someone joins halfway through the year, they haven't been paying toward next year's tax return.

It felt like our pricing model had a hole in it.

The "Aha" Moment: A Prorated Tax Fee

Eventually, the solution became obvious.

Instead of waiting until tax season, we calculate a prorated tax preparation fee when the client joins.

That amount is bundled into the initial cleanup or onboarding fee.

From that point forward, the client begins paying monthly toward the following year's tax return.

After the first year, everything becomes simple.

One predictable monthly payment.

No large surprise invoice.

No scrambling to collect payment during tax season.

The tax return is effectively prepaid by the end of each year.

Because tax planning and tax questions happen throughout the year—not just when the return is filed—this structure better reflects the actual value we're providing.

Fixed-Fee Pricing Gets Better Over Time

One concern firms often have about fixed pricing is getting the estimate wrong.

That definitely happens.

But every engagement teaches us something.

As we collect more time data, our pricing calculator becomes more accurate.

As we standardize workflows, work becomes faster.

As the team shares efficiencies, every similar engagement becomes more profitable.

Our goal isn't perfect pricing on day one.

Our goal is continuous improvement.

The pricing gets smarter every year.

We'd Rather Optimize Systems Than Track Every Minute

Some firms rely heavily on timesheets to determine invoices after the work is complete.

There's nothing inherently wrong with that approach.

We've simply found that we'd rather invest our energy in improving systems than justifying hours.

When pricing is fixed, efficiency benefits everyone.

Clients receive certainty.

Our team isn't rewarded for taking longer.

The firm becomes more scalable.

Even when we occasionally underestimate an engagement, we believe the tradeoff is worth it.

Collecting 80% today is often more valuable than trying to collect 100% months later from a frustrated client.

Building a Firm by Design

Every accounting firm has to decide what kind of business it wants to build.

For us, that means:

Owning both bookkeeping and tax whenever possible.

Charging predictable monthly fees instead of one-time invoices.

Reviewing pricing annually as clients evolve.

Collecting tax preparation fees before work begins.

Using prorated onboarding fees to create consistent monthly pricing.

Continuously improving our pricing through better data and more efficient processes.

None of these decisions are revolutionary on their own.

Together, though, they create something we're intentionally working toward:

An accounting firm that's profitable, scalable, and gives both our clients and our team more freedom.

We're still refining the model, and I'm sure it will continue to evolve.

But after our first tax season, we're convinced that designing your pricing and billing intentionally is one of the highest-leverage decisions a firm owner can make.