Re-pricing client engagements in 2026/27

Pricing is where every other fix ends up

Everyone's busy and nothing's moving. Firms usually start with productivity, then workflow and job turnaround, then write-offs, then budgets. Once budgets are in place, the team starts asking where they come from and who to talk to when they aren't enough. The answer is the partner, director or client manager. Most of practice performance can be handed to managers and the team. Pricing can't. It sits with whoever owns the client relationship, and it needs reviewing at least once a year.

Pricing is the #1 cause of write-offs

Write-offs come from three places: pricing, process and people. Pricing is the biggest, and it's the one your team controls least. They can flag out of scope work, but mostly they're handed a time or dollar budget and asked to work within it. Fix pricing and a lot of other problems go with it.

Three ways firms reprice, and only one works

Most firms do nothing. Repricing is ad hoc and only happens when a job is a disaster. The next most common is a flat CPI increase across every client, which is better than nothing but raises fees for clients who don't need it and undercharges the ones who do. You have the time and the invoicing data. A regular repricing process uses it.

Sort by recovered rate, not invoice value

Run a client performance report by client group for the last 12 months. It needs eight fields: opening WIP, time added, disbursements, invoiced, write-ups and write-offs, closing WIP, time and recovered rate. Sorting by invoice value shows your biggest clients. Sorting by recovered rate shows your best ones. Then draw a line. In New Zealand the average recovered rate is $177 and the bottom 16% sit below $136, so $140 is a sensible cut-off. In Australia the average is $209 and the bottom 16% sit below $147, so try $150. Filter to your own clients, and exclude bookkeeping, payroll and internal jobs so they don't drag good clients down the list. Every firm has a cohort of 20 or 30 clients recovering $50 an hour or less.

WIP is always part of the answer

A recovered rate only tells the truth if closing WIP turns into invoicing. If it won't, that rate is heading lower once the write-off is recognised. High WIP on a big job is normal. High WIP on a small job is a warning. This is also why a profit or margin figure is a poor substitute. Export your invoices and time, apply a cost rate, sort by profit, and the clients at the bottom are the ones you're working on right now, not the ones losing you money. Write-offs alert you three or four times more often than margin does, because billable rates are around four times the direct cost of the person doing the work.

Not every write-off is a pricing problem

Drill into the write-offs at timesheet level so you can see billable value, what was invoiced and what wasn't, side by side. Then go and have a conversation. If Greg spent hours on Xero training that nobody charged for, find out whether it happens every week or was a one-off. Weekly means repricing or packaging it as a separate service. A one-off means a process fix. Check the person too: if Greg writes off 17% against a firm average of 8%, someone else could likely deliver that job faster.

Use the word "because", and go in with a number

The best time is the next annual accounts meeting. The next best is the next engagement renewal. Block the time out once a year rather than carrying five of these conversations every month. Whatever Greg told you is your causation: "because of the volume of training and support we're providing your team each week, your fee now needs to be this." Then stop talking. Walk in with a will, not a might, because there are only two outcomes and both are good. They accept the new fee, or they leave and you get 125 hours of your team's availability back for clients who pay properly.

For a brand new client, start at the benchmark

With no history there's no recovered rate to work from. Use your judgement on the entities and complexity to estimate the hours, then multiply by the average recovered rate for your country and treat that as your floor. A 20-hour client in Australia starts at $4,000 and goes up from there. Value pricing is the other route, where you gauge the revenue you can generate and the costs you can save and charge a fraction of that. It only applies to the initial sale though. You still reprice every year after that.

Clients don't stay underpriced because the numbers are hidden. They stay underpriced because nobody looks at them once a year.