Four hundred dollars for an individual tax return. Two hundred and fifty a month for the bookkeeping behind it. Those are the two most common price points in a survey of 219 US accounting firms 1, and over three years the second client pays you around $9,000 while the first pays $1,200.
Most firms set their marketing budget against the $1,200. That is the central problem with accounting firm marketing, and it has nothing to do with the ads.
Your price list has a sixty-to-one spread inside it
The same survey puts individual returns most commonly at $400 to $599, business returns at $1,000 to $1,499 a year, monthly bookkeeping at $250 to $499, and CFO or controller work above $2,500 a month 1. Take the top of that list against the bottom and one client relationship produces $30,000 a year while another produces $500.
Those two clients cannot share a budget, and yet in most firms they do. The advertising is aimed at whoever is easiest to describe, which in this profession is the person with a deadline in April, and the pricing of that advertising is set by what that person pays.
Eighty percent of the firms surveyed planned price increases averaging 5 to 10% 1. Seven percent on a $450 return is $31. Seven percent on a $400-a-month bookkeeping client is $336 a year, and it shows up in twelve installments whether or not April was busy.
What one new client is allowed to cost
Our published band for accounting and financial services puts a single inquiry between $45 and $140, with a median of $80, and 25% of those inquiries typically become clients. Divide the one by the other and a signed client costs roughly $320 in advertising at the median, $180 at the cheap end of the band, and $560 at the top. Those figures sit behind the accounting page of our lead cost calculator, which will happily return an answer you don’t like.
Run the tax-return version first, with the assumptions on the table. A $500 individual return. Three and a half hours of preparer and reviewer time at a loaded $60 an hour, so $210 of labor and $290 of gross profit. Winning that client cost $320 at the median, so you are $30 underwater on the first return and you reach break-even sometime in year two, assuming they come back. A meaningful share of them will not.
Now the bookkeeping version, same $320. A $350-a-month client, with the work eating 55% of the fee in staff time, leaves $158 a month. The acquisition cost is repaid inside ten weeks and every month after that is margin for as long as the relationship holds.
The business return sits in between and is worth running because it is the client most firms already have. Call it $1,200 a year, eight hours of work at the same loaded $60, so $480 of cost and $720 of gross profit. The $320 comes back in the first year with $400 to spare, and it comes back again every year the client stays. Even at the top of the band, where a client costs $560, that relationship is above water in fourteen months.
The lead source didn’t change. The price of the lead didn’t change. What changed is what the client does in month two, and that difference is worth more than any bidding decision anyone will ever make on your account.
Which points at the thing worth fixing before the budget. A firm that sells a return to a new client and never proposes the monthly work has bought a $290 relationship at a $320 price and called the advertising the problem.
The firms growing fastest spend twice what everyone else spends
A study covering 87 firms with more than $16 billion in combined annual revenue found the fastest-growing ones putting 2.1% of revenue into marketing, excluding compensation, against 1.0% for the rest, with revenues at that fast-growing group up 38.5% 2.
One percent of revenue is a choice, and what it buys is a growth rate set by other people. A firm running on referrals alone is exposed to three things it does not control: the retirement of its two largest referrers, the year the bank or the law firm across town changes who it recommends, and the arrival of a competitor willing to spend the other 1.1%. None of those arrive on a schedule you can plan around, and all of them are visible in the numbers only after the year they happened.
Referrals are the best client source in this profession and they will stay that way. They are also a channel whose volume is set by somebody else’s calendar, and no firm has ever been able to order more of them in a slow September.
The other thing that 1.1% gap buys is the ability to choose. A firm taking whoever arrives gets the client mix the referral network happens to send, which in most practices skews toward the seasonal work and away from the monthly engagements. A firm with a budget can point it at the client it wants. That freedom is closer to what the 38.5% growth figure describes than any claim about advertising beating referrals: a second source lets a partner turn down work that pays badly, and turning down work is how a client mix improves.
What 2% buys at a $1.2 million firm
Twenty-four thousand dollars a year, or $2,000 a month, covering the advertising and whoever manages it. That is a real budget and a small one, and it does not stretch to a managed engagement here. Our entry tier is $1,850 a month on the services page before a dollar of media reaches Google, and we have already made the case for the spend level below which hiring anybody is the wrong move.
So spend it yourself, and spend it on the searches that describe recurring work. Bookkeeping, payroll, outsourced controller, cleanup of a set of books somebody let slide for eighteen months. Those queries name the work. The seasonal ones name a deadline, and the client attached to a deadline arrives once a year with a fixed fee attached.
The page those clicks land on matters more here than in most categories, because a business owner switching accountants is making a decision they expect to live with for years. For the professional services firms we work with in Atlanta, the page that outperforms is the one that publishes a price and describes the first ninety days of the relationship in specific terms. Most firm websites do neither, which is why a prospect comparing four firms cannot tell them apart and picks on proximity.
Three objections partners raise
“Our best clients all came from referrals, so why advertise at all?” Because referral flow is set by other people’s schedules, and advertising fills the months referrals skip. The firms in that study kept every referral they had, added a second source alongside it, and grew 38.5% 2.
“If a client costs $320 and bills $4,200 a year, why would we hire an agency?” At a $2,000 monthly budget, you probably shouldn’t, and we would tell you that on the call. The engagement starts making sense when the media budget alone passes roughly $3,000 a month and the decisions come faster than a partner with a filing season can supervise.
“What about content and search rankings?” Slower and cheaper, with a real place in this category, since the questions a business owner types before switching accountants are answerable in writing. It works on a twelve-month horizon. If you need clients in the fourth quarter, that is a different instrument.
Two point one percent of a $1.2 million firm is $25,200 a year. One percent is $12,000. The gap between the two is about forty-one bookkeeping clients at the median cost of winning one, which is either a rounding error or a second office, depending entirely on how long you keep them.