The Question That Stops Firm Owners Cold
A new client referral comes in. The prospect seems like a good fit, the initial call goes well, and then comes the question that stops a lot of firm owners cold: what do you charge?
Without a pricing process, the answer gets pieced together on the spot. Last year’s fees for a similar client. A gut feel about complexity. A number that feels safe enough not to scare them off. It works, sometimes, but it is not a system. And without a system, pricing new clients stays stressful, inconsistent, and often lower than it should be.
Here is a process that removes the guesswork and makes the fee feel like a natural outcome of the conversation rather than an awkward negotiation.
Why Pricing New Clients Feels Different
With existing clients, there is history. A firm knows roughly what the work involves and has a prior year fee to anchor to. With a new client, there is none of that context. The risk of mispricing feels higher because there is less information to work with.
However, that is actually backwards. New clients are the best opportunity to price correctly from the start. There is no prior fee to defend or apologize for, no awkward repricing conversation ahead. The engagement starts fresh, which means the firm gets to define the terms rather than inherit someone else’s.
The challenge is that without a consistent discovery process, firms default to pricing based on what they can see: the forms, the complexity, the prior accountant’s fee if the client mentions it, rather than what actually determines the value of the work. As a result, new client fees often end up anchored to the wrong variables.
The first engagement with a new client sets the baseline for the entire relationship. Pricing it correctly the first time means never having to have an uncomfortable repricing conversation later.
Start With Discovery, Not the Fee
The first step in pricing a new client is not calculating a number. It is understanding what the client is actually trying to accomplish.
A good discovery conversation covers a few specific things. What does the client’s tax and financial situation look like right now? What has frustrated them about their previous accountant or their current process? What do they want to be different a year from now? What decisions are they trying to make that they do not currently have the information to make well?
Those questions surface something more useful than form counts. They surface what the client values. And what the client values is what the fee should reflect.
A business owner who is frustrated that they have no idea what their profit margins are by product line is telling you something about what they would pay for help understanding that. A self-employed contractor who has never had a real tax plan and suspects they have been overpaying for years is telling you something about what a real strategy engagement is worth to them. The discovery conversation is where that information lives, and it is the foundation everything else gets built on.
The Four Things That Determine the Right Price
Once discovery is complete, four inputs go into calculating the fee for a new client engagement.
Are there any specific costs associated with serving this client that do not apply to others? A third-party specialist who needs to be involved, additional software required for their situation, or any other direct expense specific to this engagement. General overhead does not count here, only costs that are genuinely client-specific.
Based on what came out of discovery, what services does this client actually need? Tax preparation, bookkeeping, tax planning, advisory work, payroll support? Map out what is relevant to their situation and assign a value-based flat fee to each component rather than pricing by the hour. The goal is to price the outcome, not the time.
How much time will this engagement realistically require from the firm over a 12-month period? This is not billed to the client directly, but it informs the decision. An engagement that looks profitable on paper but requires twice the time of a comparable client at the same fee is not actually profitable. Understanding the time investment helps the firm decide whether the engagement is worth taking and at what fee.
Owning a firm carries risk and liability that staff positions do not. The fee needs to reflect not just costs and time, but a real profit margin that makes running the practice sustainable. That margin is what funds better staff, better technology, and the capacity to actually serve clients well over time. Building it into every new engagement from the start is how firms stop trading time for money and start building something that grows.
Add those four components together and the result is a total engagement value. That number, presented to the client as options rather than a take-it-or-leave-it quote, is the fee.
Present Options, Not a Single Number
One of the most consistent patterns in pricing new clients well is offering two or three options rather than a single package. The reason is straightforward: clients who are given a choice focus on which option fits them best. Clients who are given one number focus on whether they want to engage at all.
Options do not have to be dramatically different from each other in structure. They might reflect different levels of advisory access, different frequency of touchpoints, or a difference between compliance-only and planning-included. What matters is that the price points are meaningfully distinct. Packages priced too closely together, say $150, $250, and $350 a month, do not create enough contrast for the client to perceive a real difference in value. A wider gap signals that each option represents a genuinely different level of service.
Furthermore, the firm should walk into that conversation with a recommendation. Not a hard sell, but a clear statement of which option makes the most sense given what the client shared in discovery. That recommendation is what earns trust. It tells the client that the options were built for their situation, not pulled off a shelf.
A fee that is too low raises questions about quality before the work even starts. A fee that is anchored to what a previous accountant charged inherits someone else’s positioning. The clients who say yes to a fee that reflects real expertise are the ones looking for real expertise.
Set a Minimum and Hold It
Before the first new client conversation, it is worth establishing a minimum engagement fee and committing to it. A minimum fee is not arbitrary. It is the floor below which an engagement does not make financial sense for the firm given its costs, capacity, and goals.
That number should be revisited at least annually. As a firm adds expertise, hires staff, invests in technology, or shifts its client mix toward more complex work, the minimum should reflect that. A minimum fee from three years ago at a firm that has grown considerably in capability is almost certainly too low.
Having a clear minimum also makes new client conversations cleaner. When a prospect’s situation does not justify the minimum, the firm can decline gracefully rather than take on work that will frustrate everyone. That selectivity is part of what builds the practice the firm actually wants to run.
A consistent discovery process, a clear method for calculating the right fee, options that give the client a real choice, and a minimum that protects margins are the building blocks of a pricing system that works every time. Build the process, run it consistently, and the fee stops feeling like a negotiation.
Frequently Asked Questions About Pricing New Clients
How should a tax firm price a brand new client?
Start with a structured discovery conversation that surfaces what the client values, not just what forms they need. Then build the fee from four inputs: hard costs specific to the engagement, the value-based price of each service, the realistic time the engagement will require, and a value margin that reflects the firm’s risk and overhead. Present the result as two or three meaningfully distinct options with a clear recommendation.
Why is pricing new clients harder than pricing existing ones?
There is no prior fee to anchor to and less context about what the work will involve. That feels like a disadvantage, but it is actually the opposite. New clients are the cleanest opportunity to price correctly from the start, because there is no inherited fee to defend and no repricing conversation to navigate later.
Should accounting firms offer pricing packages or a single quote?
Offer two or three options instead of one number. Clients who are given a choice focus on which option fits them best. Clients who are given a single quote focus on whether to engage at all. Make the price points meaningfully different so each option represents a genuinely different level of service, and walk in with a clear recommendation based on what discovery uncovered.
What is a minimum engagement fee and why does it matter?
A minimum engagement fee is the floor below which a new client engagement does not make financial sense for the firm given its costs, capacity, and goals. Setting one and holding to it keeps the firm from taking on work that frustrates everyone, and it should be revisited at least annually as the firm grows in expertise and capability.
Will Hamilton is the Founder of SmartPath.co. Over the last 16 years, SmartPath has helped thousands of tax professionals improve their pricing so they can focus on work they actually enjoy.
