How to offer your tax & accountancy services on a monthly subscription that clients will love.

Why Subscription services matter
- Do you want more revenue?
- Do you want higher margins on that revenue?
- Do you want that revenue to flow year-round
(not just during tax season)?
The easiest way to accomplish all three objectives is to add subscription tax services.
- It is difficult to get a client to increase their tax prep fees from $300 to $600 per year.
- Getting them to switch from paying $300/year to $50/month for a Tax Services Plan is MUCH EASIER.
How to use The Essential Subscription Tax Services Template©
Hi, I’m Will Hamilton, Founder of SmartPath.co
We help small tax & accounting firms perfect their pricing so they can increase their margins and focus on work they enjoy.
To make this easy, we want to give you The Essential Subscription Tax Services Template©
It’s been used by tax firms across the US already offering profitable Subscription Tax Services, so you don’t have to reinvent the wheel.
You can just use a process that’s already proven to work. We’ve helped 1,000’s of Tax Firms implement Subscription Tax Services. We’ve documented how firms create repeatable results with their clients using a specific patter.
Now any firm, regardless of size, can follow this pattern and successfully implement a profitable subscription package in their practice.
Subscription-based “Pricing Packages” have existed for decades in other industries, and the tax and accounting space has embraced this model as firms experience the benefits.
However, it’s not for every practice. Because it’s a “newer” pricing model in this industry compared to traditional hourly and per-form billing, you may not be sure if it would be a good fit for you.
The good news is that identifying whether adding a subscription model would be beneficial is easy if you follow the right method.
Let’s dive in.
What happens when you launch your subscription model correctly?
- You’ll get a % of your clients to start paying monthly within the first 30 days.
- You can start slow without forcing any clients to participate if they don’t want to.
- You can significantly increase your average revenue per client.
- You can easily increase existing client fees without pushback.
- You can attract modern clients who want more strategic help.
- You can stand out from traditional firms in your area that don’t offer this service.
Here are the key principles today’s top firms are using to make it work:
- Subscription services should only be offered to the right clients (not everyone).
- Should You Add a Subscription Pricing Option?
- What causes subscription pricing to fail or succeed?
Subscription services should only be offered to the right clients (not everyone).
When many firms think of the subscription pricing model, they believe it will replace all other pricing options they offer clients.
Data shows this is not true, and in fact, trying to switch your pricing model with every client at once leads to poor results.
Your pricing menu – the options you offer clients for engaging with your firm and paying for your services, should have options that align with the needs of the specific client types you serve.
Some of your clients need a simple 1040 prepared and filed, some of your clients need complex business strategy planning, others need help with IRS Resolution or setting up their accounting.
So your pricing menu should allow you to align your pricing strategy with the needs of the type of client you work with. There are pros and cons to every pricing strategy, so your job as the owner of a firm is really to identify when you should use a subscription pricing model and how to do it successfully if you choose to add it as an additional option to your pricing menu.
By adding a subscription pricing option:
- You automatically capture the value that normally slips through the cracks in your client relationships. With per-form or hourly billing, you think you’ll “up-charge” the client’s next tax return when you spend 3 hours with them in August, but you get busy and stressed come March, so most firms rarely do.
- You should still utilize other pricing options on your menu, but they must align with the value you’re delivering and the results the client is trying to achieve.
Hourly Engagements or Retainers
- This pricing option is ideal for client needs that are entirely new and unpredictable, where you can’t foresee the steps, time, and results required to achieve the desired outcome.
Fixed Fee & Upfront Billing
- This pricing option is perfect for clients with specific needs you’ve handled many times before. You know the exact steps, order, and time required, like setting up a new business on QBO or filing an LLC or Corp with the State. With this familiarity, you can charge a fixed upfront fee, meeting the client’s needs while making a profit.
By using a pricing menu that has all three options:
- Hourly Retainers
- Fixed Fee & Upfront Billing
- PLUS Monthly Subscription packages
You’re giving yourself the best odds to help clients and still protect your profits in today’s challenging environment.
So should you add a new subscription pricing option to your menu?
Should You Add a Subscription Pricing Option?
That can be answered by honestly analyzing your pricing now. Go through the following questions in order to identify an answer for your specific practice.
Are you currently generating “enough” profit?
We all want to maximize our profits (how you define “profit” for tax purposes is up to you). Beyond just paying your salary, are you also compensating yourself for the stress and liability you carry as a business owner? Are you earning enough to feel good about your work for clients?
Many people aim for a $1,000,000 or $2,000,000 practice, but the high costs at that level often outweigh the benefits of the revenue. Only you can answer this but try to be honest with yourself.
- Yes _
- No _
- If “Yes”:
- Congratulations! If your practice is profit-strong right now, then something is working and your current pricing menu may not need to be addressed.
- If “No”:
- The highest impact area to your profit is your pricing menu. Your pricing is the doorway to your revenue. If you close the door on your revenue because your pricing isn’t optimized, you can never cut costs far enough to significantly increase your long-term profits. Unless you’re currently way over-spending and that’s rare for most firms.
Is your current ARPC at least at the national average?
We’ve been tracking subscription pricing data for over 10 years. The Average Revenue Per Client (ARPC) for individual, non-business owner clients on a value-based subscription model is currently $1,068/year. For business clients on a value-based subscription model (Schedule C businesses, S-corps, C-Corps, and LLC’s), the ARPC goes up to $4,788/year.
What’s your current ARPC? Simply take your gross annual revenue and divide it by the number of clients you serve in each type (individual and business).
- If you’re at or higher than the average: Then your price points are healthy. Continue through the rest of the analysis to make your final determination.
- If your ARPC is lower than the national average, you might be missing out on revenue. Firm owners often think their clients won’t pay higherfees, and for the current offerings, that’s true. Subscription pricing can help by tying fees to an updated value, showing clients they’re paying for more than just tax return prep or bookkeeping. This strategy allows you to increase revenue from new and existing clients without driving them away.
Is your current pricing based on the value today’s clients want and need?
Clients today see less and less value in traditional compliance services (tax prep, accounting, payroll). They still need these services, but data shows they view these services as a commodity and many Americans are looking for ways to conquer these needs on their own.
- If your pricing is tied to strategic help, then you’re offering value that cannot be easily replaced by technology. Technology is great at calculating numbers, but it’s a long way off from being able to educate clients about what those numbers mean in the context of their specific circumstances and goals. Implementing subscription-based pricing packages can help clarify what value your clients are really paying you for, and eliminate any comparison to DIY tech solutions.
What’s Your Ideal Client Roster Size (ICRS)?
The time spent on client work outside of tax returns has increased significantly, with a 50% rise in 2020 alone. Clients now require more attention and interactions. The most profitable firms today focus on spending more time with fewer clients. The high-volume practice model from previous decades is no longer effective for serving today’s high-touch clients.
Use this simple Roster Size Calculator to identify your Ideal Client Roster Size (ICRS).
What causes subscription pricing to fail or succeed?
Identifying the reasons pricing packages fail will act as a final “gut-check” to see if having a subscription option will be right for you. Understanding the failings will also give you a powerful key to success. Once you eliminate everything that could cause your pricing packages to fail, the only option left is “Success”.
– Failure Reason #1 | Your pricing package is focused on the wrong value.
– Failure Reason #2 | The specific price points of your packages are unrealistic.
– Failure Reason #3 | No defined process to deliver the value clients signed up to receive.
– Failure Reason #4 | The roll-out strategy for your packages is fundamentally flawed.
How can you make your subscription fee option successful?
Plenty of people say you should “update your pricing”, but they don’t tell you what to do, in what order, to make your pricing packages really work.
We’ve gathered data from helping over 1,000 firms in the last decade optimize their pricing. Here’s exactly what the data shows you need to do, step-by-step.
- Tie your subscription fees to strategic help, not just compliance (and have a process to deliver that help).
- Make sure your fees are realistic and not for just “whales” or “unicorns”.
- Roll out your subscription pricing packages to a controlled group, don’t try to make this transition at once, overnight.
Quick Review
- After evaluating the pros and cons of subscription pricing, you should now have a clearer sense of whether updating your pricing menu is necessary or if maintaining your current approach is more advantageous.
- Subscription pricing isn’t suitable for every business, but for those it does suit, the benefits can significantly outweigh the initial time, effort, and investment required to implement it.
- If you’ve decided to incorporate subscription pricing into your offerings, following the three-step process outlined in this guide will naturally address potential pitfalls and ensure your subscription model’s success.
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- Focus on executing these three essential steps without overcomplicating the process or being deterred by potential challenges.
Next Steps
- Access the Roster Size Calculator and confirm your ideal Roster Size
- Begin building your subscription system using our template
- Download The Essential Subscription Tax Services Template©
- Get expert help to build out your Subscription System
Schedule a call with the SmartPath >> Get Help Implementing an Essential Subscription Tax Service