Accounting firms mix hourly, fixed-fee, and value pricing. Everhour keeps billable time tied to client billing.
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Industry average is 75–80%
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For accountants, the calculation answers how much client-chargeable time turns into billable value before invoice adjustments. IFAC defines chargeable hours for public accountants as public-accountant-supervised hours normally chargeable to clients, excluding routine clerical work. That distinction matters during tax season, monthly close work, client advisory work, and cleanup projects where admin time sits next to client-facing analysis.
The output is usually a pre-tax billable amount in USD: approved chargeable hours multiplied by the applicable charge-out rate. A separate tax line belongs only when the jurisdiction taxes that service. The United States has no federal VAT/GST or national sales-tax rate for billed professional time, so a U.S. calculation needs a state or local tax input only when the service is taxable.
The basic formula is billable hours × hourly rate = pre-tax billable amount. If the engagement uses different staff rates, calculate each rate tier separately and add the results. If the firm applies write-downs, calculate the standard value first, then apply the write-down as a separate adjustment so utilization, realization, and collections stay distinct.
For example, an accounting engagement includes 18 approved tax-preparation hours at $190 per hour and 7 approved advisory review hours at $240 per hour. The tax-preparation value is $3,420, the advisory value is $1,680, and the pre-tax billable total is $5,100. Non-billable admin time, internal review not charged to the client, or out-of-scope time held back by policy stays outside this total.
Accounting firms often use more than one billing basis. The MAP Texas report lists median billing protocols of 75.0% hourly-based billing, 30.0% fixed pricing, 20.0% value pricing and value billing, and 20.0% per-tax-form fees. That mix means the calculator is exact for time-and-charges work, but it also helps test whether a fixed-fee or value-priced engagement is absorbing too many unpriced hours.
Use the calculation as a control point, not as the whole billing policy. For fixed-fee CAS work, compare tracked chargeable hours against the fixed price to find the implied hourly rate. For hourly tax or audit support, use the approved rate card. For write-down review, compare standard billable value with billed fees; the MAP Texas report's median firm realization is 97.7%, which measures billed value after write-ups and write-downs, not cash collected.
A one-off calculator is enough when you need to price a small engagement, check a partner's write-down, or compare chargeable hours against a quoted fee. It is also enough for a draft estimate when the hours are already approved and the rate is clear. The result is weaker when time entries are scattered across spreadsheets, email, and project notes.
A managed workflow fits recurring client work, busy-season review, and firms that invoice from approved time. Everhour Billing & Invoicing converts tracked billable time and expenses into invoices, calculates invoice amounts from rates while excluding non-billable tasks, and exports invoices to QuickBooks Online, Xero, or FreshBooks with status sync back to Everhour.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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Billable time is client-chargeable supervised work that the firm normally charges to a client. It excludes routine clerical work and internal admin time unless the engagement terms allow those hours to be charged. Use the firm's policy, client agreement, and engagement type to decide whether tax preparation, advisory review, cleanup work, research, or client meetings are billable.
No universal 6-, 10-, or 15-minute billing unit applies to accountancy firms. IFAC describes daily or hourly charge-out rates and time-based increments, but the billing increment is firm-defined. Use the increment written in the firm's policy or client engagement terms before converting raw time into billable hours.
Write-downs reduce billed value, not the original recorded chargeable hours. First calculate standard value from approved billable hours and rates. Then record the write-down separately so utilization, realization, and collection remain clear. IFAC gives an example performance expectation of 1,200 chargeable hours per year with no more than 10% write-offs.
Yes, but the result serves a different purpose. For fixed-fee work, the calculator shows the implied hourly return and whether the scope is drifting. Divide the fixed fee by chargeable hours to find the effective rate, or multiply hours by standard rates to compare standard value against the agreed fee.
There is no federal VAT/GST or national sales-tax rate for U.S. professional time. Tax treatment is state and local. Some jurisdictions tax services or business activity differently, so add a jurisdiction-specific tax input only when the accounting service is taxable under the applicable state or local rule.
Everhour Billing & Invoicing uses tracked billable time, expenses, rates, and client settings to generate invoices while excluding non-billable tasks. Invoices can be exported to QuickBooks Online, Xero, or FreshBooks, with invoice status, number, issue date, and amount synced back to Everhour.
Everhour supports project, member, and custom task rates, so different accountant roles or engagement tasks can price time differently. That lets a firm separate tax-preparation hours, advisory review, and non-billable work before reporting billable amount, cost, and client-facing totals.
Convert accountant time entries into invoice-ready billing. Everhour connects approved billable hours, rates, expenses, and accounting exports so client invoices reflect the work that was actually approved.
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