When Should You Review Fees After Buying an Accounting Practice?
You should review fees early after buying an accounting practice, but the evidence, engagement terms and client relationship should determine when any change takes effect.
A practice can look busy while quietly doing more work than its fees support.
After settlement, you may discover that a familiar annual package includes frequent calls, additional entities or bookkeeping corrections that nobody has priced separately. Equally, a difficult first month may reflect the disruption of transition rather than a lasting pricing problem.
The decision to Review fees therefore deserves attention during your first 100 days. It does not require an immediate increase across every client.
Your first task is to understand what clients currently receive, what they have agreed to pay and how the work is being delivered under your ownership. In an Australian accounting practice, those details matter as much as the headline fee base.
The short answer
Begin the review once you can access reliable engagement, billing and workload records.
Separate underpricing from extra scope, transition costs and inefficient delivery.
Choose implementation dates that respect existing arrangements and allow clear client communication.
Monitor the effect on retention, collections, staff workload and sustainable earnings.
Review fees early, while keeping the timing flexible
The first 100 days are a useful planning window, rather than a deadline for repricing the practice. An annual client may not have required substantial work during that period. If you judge their profitability from the first few weeks alone, you could overlook the heavier work that arrives later in the year.
Some matters need an earlier conversation. A new assignment with no agreed fee, an obvious mismatch between scope and price, or a package that repeatedly absorbs substantial additional work should not disappear into a distant annual review. However, the response may be a clearer scope or a separate proposal rather than a higher charge for everything.
Your acquisition records provide the starting point. The financial information requested before purchase can help you compare current billing with the historical position, while recognising that the vendor’s delivery model may differ from yours.
What does the existing fee actually cover?
Before deciding that a client is underpriced, you and the responsible accountant should establish what was promised.
Review the engagement documents, recent proposals, invoices and relevant correspondence. A long relationship may contain informal expectations that are invisible in the billing report but very real to the client.
The Tax Practitioners Board’s guidance on letters of engagement explains how written arrangements can reduce uncertainty about fees and scope.
For tax agent and BAS services, use that guidance to inform the review, while obtaining advice on the arrangements appropriate to your practice. An engagement letter alone does not establish compliance with every professional obligation.
You should also ask staff and the vendor about legacy discounts, bundled services and commitments to particular client groups. Understanding the client base helps explain why apparently similar clients may receive different services. A family group with several entities may involve more coordination than its individual invoices suggest.
Is the problem price, scope or the way work is delivered?
A low margin can have several explanations. Staff may be completing tasks outside the agreed package, correcting poor records or waiting for missing information.
Alternatively, the practice may be using a cumbersome process or allocating work to someone whose skills do not fit the task. Raising the fee without examining those causes may leave both the client and the team frustrated.
Compare fees with the time and resources required across a representative period. Include review and supervision, software and administrative support, as appropriate to your operating model. Where time recording is incomplete, use documented estimates and discuss their limitations rather than presenting a precise margin that the records cannot support.
The business.gov.au pricing strategy guide recommends considering costs, customer value and market context when setting prices. These principles support an informed review, but they do not prescribe an accounting-practice fee or a standard increase. Your own evidence should explain the proposed price.
A review of staff structure can also expose delivery issues that belong in the operating plan. If a senior accountant is routinely handling work suitable for another team member, you may need to improve allocation before concluding that the entire engagement is uneconomic.
How should you choose which clients to review first?
Prioritise evidence of a material problem rather than simply selecting the largest or smallest accounts. Useful signals include repeated write-offs, expanding scope, unusually heavy support demands and fees that have remained unchanged while the service has evolved.
Significant relationships also deserve careful attention because the consequences of an awkward conversation can extend beyond one invoice.
For each selected engagement, you should be able to answer four questions before proposing a change:
What work is included, and what additional work has actually occurred?
What evidence supports the current delivery cost and proposed fee?
What do the existing arrangements say about variations and timing?
Who will explain the proposal, record the response and confirm the agreed position?
Market information may provide context, but independent judgement remains essential. The ACCC’s guidance on setting prices explains that businesses must make pricing decisions independently.
How do you make the conversation fair and understandable?
Clients should understand the service, the proposed fee, when it would apply and what choices are available.
A brief ownership announcement is unlikely to answer those questions. Where appropriate, a conversation with the relationship manager can explain the proposal before written confirmation sets out the details.
The vendor’s handover arrangements may help you understand previous discussions, although responsibility for the new proposal rests with your practice. Avoid suggesting that the purchase itself gives you an automatic right to change agreed terms. Have your solicitor assess the relevant documents where the position is unclear.
As an illustrative example, suppose a fixed annual compliance package has gradually absorbed monthly bookkeeping corrections.
You could document the extra work, discuss its cause and offer a separately scoped service for future corrections. The client might instead improve their records or reduce the additional support. None of those outcomes is guaranteed, and any variation needs to follow the applicable arrangements.
What should you monitor after a change?
A higher invoice is only the beginning of the assessment. Track whether clients accept the proposal, reduce services, dispute invoices or leave.
You should also examine whether the revised scope reduces unexpected work and whether staff can explain it consistently. Record annual engagements that have not yet reached their next work cycle as unresolved evidence.
Clear billing supports this process. The business.gov.au guidance on invoicing explains the importance of describing the work and payment terms. Match invoices to the agreed arrangements so a pricing discussion does not become a collection dispute.
Your review should also connect with cash flow. The practical steps for improving cash flow before borrowing include issues that a fee increase cannot fix, such as delayed invoicing or unresolved collections. Forecast proposed changes separately from confirmed receipts so the operating plan remains credible.
Frequently asked questions
Should I increase every client’s fees after settlement?
A change of ownership is not evidence that every fee needs to rise. Review each relevant service group and engagement before deciding where a change is justified.
Do I need to wait until day 100?
No. You can begin reviewing records earlier and address urgent scope questions promptly. Implementation timing depends on the evidence, existing terms and client communication.
What if the vendor promised that fees would stay unchanged?
Establish what was said and documented, then obtain legal advice on any relevant commitment. Do not assume the promise can be ignored or automatically binds every future service.
Can a fee increase solve an immediate cash shortfall?
It may not produce cash soon enough. Clients must accept the arrangement, work must be billed and payment collected. Review the shortfall and collection process separately.
What if a client rejects the proposed fee?
Listen to the reason and consider whether scope or delivery can change sustainably. Document any agreed alternative instead of quietly continuing an arrangement your team cannot support.
Let the evidence set the pace
A useful fee review leaves you with a clearer service model and an understandable client proposition. Begin the investigation early, keep untested assumptions visible and introduce changes at a pace your agreements, clients and team can support.
Has Your Funding Position Changed After Acquisition?
If your review identifies a change in cash flow, working capital or the funding arrangements, our team can help clarify the implications and discuss options.
General information only. This article does not constitute financial, credit, legal, tax, accounting, compliance or valuation advice. Finance is subject to lender approval, eligibility criteria, terms, fees and conditions. Consider obtaining independent professional advice for your circumstances before acting.
