Why This Practice Quotes a Fixed Fee Instead of Billing by the Hour

Most accounting firms bill by the hour. It is how the large firms where David Tucker started his career worked, and it is how most practices still work. This practice does not, and clients ask why often enough that it deserves a full answer.

What a fixed fee means here

Before any work starts, David quotes one price for the engagement. For a tax return, that covers gathering the information, preparing and reviewing the return, filing it, and a review meeting in person or by Zoom. For an entity setup, it covers the analysis, the elections and the registrations. For bookkeeping and payroll, it is a monthly amount based on volume.

The quote is based on the complexity of your situation, not on how long the clock runs. If a return takes longer than expected because David chose to dig into something, that is his cost, not yours. If something materially new turns up, such as a business you did not mention or three rental properties instead of one, the scope changes and so does the quote, but that conversation happens before the work, not on the invoice.

Why hourly billing works against clients

Hourly billing creates a quiet incentive problem. Every phone call costs the client money, so clients learn not to call. They make a decision in July with tax consequences, do not mention it, and the CPA finds out the following March when it is too late to do anything about it.

David's view, after more than thirty years in finance and tax, is that the most valuable conversations are the short ones during the year: "I am thinking about buying a truck for the business, does it matter when?" or "My daughter started college, is there anything I should do?" Those calls take ten minutes and can save real money. Under a fixed fee, for most ongoing questions there is no charge, so clients actually make them.

What it changes about the work

A fixed fee also changes how the return is prepared. With no meter running, there is no pressure to rush and no reason to skip a second look. David takes what he describes as a semi-aggressive approach: claim what the law allows, document it so it holds up, and avoid positions that invite an audit without a real payoff. That approach takes thinking time, and a fixed fee makes room for it.

How the quote is set

The free initial consultation is where the quote comes from. David asks about your income sources, your business if you have one, property you own, your family situation and anything unusual about the year. From that conversation he can tell you what the engagement involves and what it will cost. There is no obligation at that point. If the fit is right, the engagement letter puts the scope and the fee in writing.

Where fixed fees do not apply

A few things are hard to quote in advance: representing a client in an IRS examination whose scope is unknown, or reconstructing years of missing records before the size of the problem is clear. In those cases David will say so up front and propose a way to limit the uncertainty, usually a fixed fee for a first phase that defines the rest.

The practical result

Clients know what they will pay. They call when something comes up. The returns are more complete because the information arrives during the year instead of after it. That is the whole argument for fixed fees, and it has held up for the life of this practice.

If you would like a quote for your situation, start with a free consultation.