Gradually, and Then Suddenly: The Rising Cost of Subscriptions for Accountants

The rising cost of software subscriptions has become an unavoidable reality for many accountants. Once modest and manageable, these monthly fees have quietly snowballed into a significant financial burden, particularly for smaller practices. The realisation of just how significant these subscriptions have become is only now starting to hit home.

The Quiet Cost of Progress

The issue extends beyond the cost of bookkeeping software. Accountants are facing mounting costs for accounts production, tax software, AML compliance tools, e-signature platforms, payroll software, cloud storage, and more. While these systems promise efficiency, the question is increasingly unavoidable: do they truly justify their expense?

Several providers have significantly increased their fees in recent years, leaving practices with little choice but to accept the higher costs or undertake the disruptive process of switching providers. For many, the latter feels like an impossible task.

Support for these tools often compounds the problem. Most rely on faceless platforms like Intercom or Zendesk, where queries are met with scripted responses from agents who lack technical or professional expertise with no direct line to speak with someone who truly understands the product or the accounting profession. High staff turnover exacerbates this, leaving accountants to repeat themselves endlessly. It is a system that feels indifferent to the profession’s real-world challenges, making the rising costs even harder to swallow.

The subscription model itself, while excellent for cash flow and enabling smaller companies to compete, has also created barriers to disruption. New entrants to the market must adopt the same model to compete, and the resulting ecosystem seems to trap practitioners in a cycle of ever-increasing costs.

Overtrading: "Take My Eyes, but Not the Client"

At the heart of the issue lies another, more ingrained problem in the profession: overtrading. Too many practices are taking on too many clients at fees that are simply too low. There’s a pervasive mindset in the industry—“Take my eyes, but not the client.” This fear of losing clients leads accountants to undervalue their services, agree to unsustainable fees, and ultimately spread themselves too thin.

The consequences are predictable. Overtrading leaves accountants overwhelmed and unable to properly service their clients. Emails go unanswered, tax returns are filed late, and the level of personal attention that clients expect and deserve diminishes. Ironically, in the effort to keep every client, practices risk providing a level of service that could lose them clients in the long run. How often have we heard the complaint, "My accountant won’t ring me back," or, "I’ve been waiting weeks for a reply"? This isn’t just poor service—it’s a symptom of overtrading, where practices stretch themselves too thin trying to retain every client at unsustainable fees.

Even after a period of high inflation, many accountants remain reluctant to increase their fees, afraid they will lose clients. This hesitation further entrenches the cycle of undervaluing services and overloading workloads, making it increasingly difficult for practices to operate sustainably while providing the quality of service their clients expect.

Lack of a Pricing Structure

There’s a deeper structural issue at play as well. If you were to ask most accountants how they arrive at their fees, the answers would likely be vague. Many simply undercut the previous accountant’s fee, using last year’s accounts as a benchmark, without considering whether the price reflects the value or work involved. Other professions take a far more structured approach to pricing: architects charge a percentage of the construction budget; recruitment consultants base their fees on salary; solicitors also use percentage-based fees. By contrast, accountants often look to undercut their predecessors, a practice that erodes both the profession’s value and its sustainability.

As the profession grapples with these challenges, it’s time for a reassessment on two fronts: operating costs and pricing structures. On the cost side, practices need to evaluate whether the benefits of their software subscriptions justify the expense. While the subscription model has been beneficial in enabling smaller entities to access tools that were once out of reach, it has also entrenched a system where prices only ever seem to rise. For some practices, it may be worth exploring whether building in-house solutions could offer greater long-term control and cost savings.

On the pricing side, accountants must break free from the fear of losing clients and adopt a structured approach that reflects the true value of their services. Competing on price alone is a losing strategy—it implies that price is all the practice has to offer, which is neither true nor sustainable. Practices need to focus on delivering value and communicating that value to clients effectively.

Value Over Volume

The rising costs of software and the pressures of overtrading are symptoms of deeper structural issues within the profession. Addressing these challenges requires a fundamental shift: prioritising value over volume. Practices need to streamline their client bases, focus on delivering high-quality service, and adopt sustainable business models that reflect the true worth of their expertise.