What Technical Accounting Expert and Price Is Right For Me?

At this point, you’ve likely gotten a general understanding of your US GAAP and technical accounting needs for your company. You may have even reached out to a few technical accounting experts and received some competing quotes. But how do you know which technical accounting expert is the right one, and if you are getting a fair price?

This article gives a peek behind the scenes of how technical accounting experts generally scope and price their quotes for their clients, and also outlines the key differences of various technical accounting experts and firms.

How Is My Quote/Budget Pricing Determined?

It is extremely difficult to set a fixed price for a type of project. This is because the facts and circumstances of each project vary by industry, by company, and even by transaction. There are too many unknowns to set a fixed price, and firms generally don’t accept the risk of absorbing unexpected additional hours when issues arise. Instead, these unanticipated hours due to complexities or client-related issues are charged as “overruns.”

Instead, firms generally set a budget. This is an estimate of the number of hours expected for completion of the project; it should include both technical work and administrative tasks such as recurring status calls. For each type of project, a good specialist should have an internal list of project steps/tasks/phases and know how many hours each of these should take, in order to provide a reasonable range of estimated hours for the project.

After estimating the number of hours, a specialist then applies their pricing, which is generally based on hourly rates. A firm might use a single, blended hourly rate for all hours incurred, or may have hourly rates separated by level/role of the project team that will be involved; less experienced resources at a lower rate, and partner or expert resources at a higher rate. This combination of estimated hours and applicable rates results in the project budget.

Lastly, many firms also charge an additional fee, such as an administrative fee/charge. These are generally charged as a % of amounts billed and represent fees to cover the cost of the firm’s underlying technology or tools used for the project. Common admin fees are around 5%; anything higher than that can be considered as excessive.

How will I be billed for services?

You might also be curious on how you will be billed. Most firms invoice on a periodic basis; monthly is most common. At the end of each month, the amount of actual hours worked and their related rates, as well as any admin fees, are calculated by the firm and issued as an invoice to the company. 

Some firms may charge an upfront advance/retainer for a certain portion of the budget, at the start of the project or upon meeting certain milestones for a larger project. If the involvement is on a recurring monthly basis, an upfront advance/retainer may be applied at the beginning of each month.

What Do Hourly Rates Look Like?

Technical accounting services are highly specialized; they require an intimate knowledge of the latest guidance, as well as how to apply that guidance properly and most efficiently. Because of this, pricing is more expensive than more routine accounting services such as bookkeeping or tax return preparation.

While the rates vary for each firm based on their pricing strategy and size, a helpful guide is to think of firms in 3 buckets.

Large Firms

This consists of the “Big 4” firms of Deloitte, KPMG, PwC, and EY, as well as other international firms (e.g. RSM, Grant Thornton, BDO). As you might expect, these are by far the most expensive. Hourly rates vary by role/level; less experienced resources such as Associates or Senior Associates may start around $250/hr, while Partners may be closer to $600-$700/hr (or more). Subject matter experts or “National Office” resources may be as high as $1,000/hour.

What do you get for this hefty pricing? 2 key things:

• First, you get the prestige of the name of a large, well-known firm behind the deliverables being produced. Some investors/lenders might prefer to see these logos, but it is more impactful for audit services and less for advisory-type work.

• Second, you get a deep bench; large firms have more available resources when large teams of multiple people are needed for large projects. They also have a “National Office” full of technical accounting subject matter experts (SME’s) who solely focus on specific topics or industries, and who are tapped for the most knowledgeable answer for the most complex or subjective matters.

Midsize Firms

The second tier to consider are firms such as a regional or local firm. By having smaller operations and overhead, these firms are able to charge significantly lower rates than those of global/national firms, while still maintaining a level of quality for their services and expertise.

• Fewer resources may be available (e.g. don’t expect a team of 12 devoted individuals), but this is generally not an issue for technical accounting projects, and most of these firms also have subject matter experts in various topics (albeit smaller and less-focused than large firms).

• Hourly rates can range from $150 (small firm, junior resource) to $400 (larger midsize firm, partner/SME resource).

• Due to fewer levels of review compared to a large firm, midsize firms are also able to provide deliverables/responses more quickly; they may require some revisions based on auditor/reviewer feedback but still provide a solid level of quality.

Individuals

The last bucket relates to specialists that work by themselves, such as a freelancer rather than a collective firm. This can also include if you are considering hiring a technical accounting specialist as an employee.

• Rates are the lowest of the 3 buckets; many individuals charge between $100-$150/hour,

• However, they are very limited in their capacity, as 1 person can only take on a handful of projects at any given time. Expertise is limited as well, with an individual’s knowledge only based on certain topics that they have encountered in the past, and a small number of instances within those topics.

What type of specialist is the best fit for YOU ? The quick answer is that you get what you pay for. My thoughts are as follows:

• Large firms are the right choice in cases where you need a complete and comprehensive solution, with every “i” dotted and every “t” crossed. Their SME’s and multiple levels of review result in an extremely high level of quality; however, for these same reasons it takes much longer to receive deliverables and at a high $ cost. These are the best fit with large companies (e.g. Fortune 500 companies) that require extreme precision.

• Midsize firms are generally a good fit for companies with a reasonable budget and flexibility with their audit/review teams. They are a good middle ground that still boast some SME resources, as well as a similar level of quality for standard engagement team resources comparable to large firms.

• Individuals are considered the “budget” option out of the 3. If you can find the right individual for a specific topic or matter, or if a matter is not complex, then you will benefit from the cost savings. However, such a person is extremely difficult to find considering a single person’s limited capacity/expertise.

Where Does Zeroed-In Fit in All This?

At Zeroed-In, we fall into the Midsize Firm category. For our Technical Accounting Services, we charge hourly rates based on the role/level ranging from $200-300. For smaller scope projects, we may choose to simplify this into a single blended rate of $250. We also charge a 5% administrative fee to assist in covering the costs of our technology stack and tools used.

Our projects are generally priced and billed on a time & materials basis, based on actual hours incurred and applicable hourly rates. However, we also have fixed-fee packages available for certain projects, such as our recurring Technical Accounting Advisory services, or ASC 842 (lease) implementation projects for companies with 10 or fewer known leases. We will share with you during the proposal process whether a fixed-fee package is available for your specific need.

Reach out to us for a discovery call or check out the rest of our website for more information on our team, our services, and additional resources such as our blog and video content.