GBU Insights 2015: Average Charge Rate

GBU Insights 2015: Average Charge Rate

Click here to get your data into this month’s GBU Insights poll on the present and the future of the Australian accounting industry.

Hey number crunchers.

Here’s a few stats to gobble down from our latest GBU Insights poll.

The average charge out rate for Australian accounting firms is $310, and average director charge rate is $316.

This figure has remained fairly stable since 2010 – take a look for yourself.

average-charge-rate

average-charge-rate-multiple

Screenshot (180)

Screenshot (181)

There is, of course, the elephant in the statistics – the drop from $330 to $310 in the last year. Here’s what we think accounts for this.

1. Some sole practitioner partners with no staff are still hands-on providing tax and compliance services and therefore commanding $200-250 per hour. Meanwhile, other directors are solely providing advisory services to high-end corporates and being rewarded at $350+ per hour.

2. The average salary multiple for calculating staff charge rates range from 3-4 times salary. This is down from 3.9 in 2014. This salary multiplies for calculating job cost, as a majority of firms invoice based on increasing last year’s fee by a percentage.

3. The majority of firms (75%) have implemented fixed price agreements with clients, but these agreements only account for a small percentage of total fees (15%). This points to a slow adoption of fixed price agreements across the total client base. Many firms have previously identified ‘scoping creep’ as to why they are slow to embrace fixed price agreements.

What do these numbers say to you?

Written by HowNowHQ View all posts by this author →

HowNow is the leading email and workflow management software for accountants across Australia - and now we're available worldwide! Our new cloud software creates a frictionless end-to-end workspace for ultimate client service. We’re not just leaders of smooth business – we’re leaders of the future.

Leave a Reply

Your email address will not be published.