Setting Professional Charge Out Rates
Business Advisory Services Updates
Accountants can assist professional practices by implementing a strategy for the setting of charge out rates to ensure that the key components that contribute to a professional practice generating a profit have been considered.
The key component for the calculation of charge out rates include:
- the working hours for the team including partners/directors
- adequate allowance for professional development/staff training
- realistic estimate of productivity to be achieved
- salaries and salary on costs applicable to each position
- the professional firm’s overhead expenses
- the profit target
When all of these components are entered into the ESS BIZTOOLS Professional Charge Out Rate Calculator the system will produce charge out rates for each person that could be used and if working hours, productivity, overhead expenses are what was expected, then the targeted profit should emerge.
