Blog · Wallet share and penetration · Tax and accounting
How an accounting firm finds the clients paying well below what similar clients pay for the same services, from the fee ledger and the client master: fee per client per service line, the norm from clients of the same size and complexity, the gap valued, the partners whose books sit lowest, and why the fix is a scoping conversation at the next engagement letter rather than an across-the-board increase.
An accounting firm's fee review is usually a percentage applied to everyone. The fee ledger and the client master can show which clients are paying a third less than similar clients for the same service, and which partner's book they are in. This guide sets out fee per client against the firm's own norm, the gap, and the per-partner view.
Per client, per service line, per year:
Fee = billed fees for the service Norm = median fee for the service among clients in the same size and complexity band Gap = norm − fee, floored at zero Gap share = gap ÷ norm
Per partner:
Clients below a stated gap share, and the gap summed
Client and partner identifiers only.
Σ clients' fees per service = ledger fees for the service
And every client is in one band. A client with no size data is listed as unbanded and excluded from the norm rather than defaulted.
Service: annual accounts and corporation tax. Band: turnover £5m to £20m, two to five entities.
| Client | Entities | Fee | Norm | Gap | Gap share | Hours | Fee per hour | Partner |
|---|---|---|---|---|---|---|---|---|
| 2207 | 3 | £9,200 | £16,500 | £7,300 | 44% | 118 | £78 | P-07 |
| 4471 | 4 | £17,000 | £16,500 | none | 96 | £177 | P-11 | |
| 9034 | 2 | £8,800 | £16,500 | £7,700 | 47% | 141 | £62 | P-07 |
| 1187 | 5 | £15,900 | £16,500 | £600 | 4% | 102 | £156 | P-11 |
Clients 2207 and 9034 pay half the norm and consume more hours than the clients paying the norm. Both are in partner P-07's book. The next engagement letter for each has a number beside it and the hours to justify it.
| Partner | Clients | Below norm by 25%+ | Gap summed | Fee per hour, book |
|---|---|---|---|---|
| P-07 | 48 | 19 | £140,000 | £71 |
| P-11 | 41 | 4 | £22,000 | £158 |
Partner P-07's book is where the firm's pricing drifted, and the list of nineteen is the year's fee review.
Blanket increase. The correctly priced clients absorb it; the under-priced stay under-priced.
Norm from a survey. Not defensible to the client; not specific to the firm's service.
Bands too coarse. A £5m client and a £20m client in one band; the norm means nothing. Two or three fields, stated.
Hours ignored. The under-priced client that is also the most expensive to serve is the one to fix first.
Mapped once, the fee ledger, the client master and the time entries produce the norms, the gaps, the per-partner view and the list in time for the engagement letter cycle. Covirage builds this from the exports as they are. The tax and accounting page describes the setup, and the service line gaps guide covers the other half of the fee conversation, the services the client does not buy at all.
From the client master: turnover band, entity count, number of employees, and for compliance work the number of returns or filings. Two or three of those fields give a band, and the norm is computed within the band from the firm's own fees.
A survey says what other firms charge for something like this. The firm's own book says what this firm charges similar clients for the same thing, which is the number a partner can defend to a client and a client can understand.
Where time is recorded, fee per hour per client sits beside fee per client. A client below the fee norm and above the hours norm is under-priced twice. Where time is not recorded, the fee norm alone still ranks.