Over half of accounting and tax firms plan to increase fees across all services in 2025, according to a new survey.

The survey, released Wednesday by practice management technology company Ignition, found that the majority (around 58%) cited rising business costs as the main motivator for their fee increases, while only 5% are raising prices to increase revenue. Most of the nearly 350 firms surveyed intend to increase fees across services by 5% or 10%.

Some 57% of the respondents plan to increase fees across all services. With regard to tax preparation specifically, 90% of the survey respondents plan to increase fees for individual tax returns, and 87% plan to increase fees for business tax returns. In addition, 70% plan to increase fees for tax planning and advisory services;. 85% plan to increase fees for bookkeeping and accounting services; and 76% plan to increase fees for CFO and controller services.

“While accounting firm owners are embracing price increases in 2025, the report shows that the majority (around 58%) cite rising business costs as the main motivator,” said Ignition global president Greg Strickland in a statement. “Only 5% are raising prices to increase revenue, which indicates an opportunity for firms to leverage pricing as a strategic tool to unlock revenue growth.”

The report found a shift from hourly billing to fixed-fee and value-based pricing, with 79% of the survey respondents indicating they use fixed-fee or value-based pricing for bookkeeping and accounting services. Over half (54%) use fixed-fee or value-based pricing for tax preparation services, 67% use fixed-fee or value-based pricing for tax planning and advisory services, and 75% use fixed-fee or value-based pricing for CFO and controller services.

The report benchmarked current fees for tax, accounting and advisory services, which varied based on firms’ annual revenue range. The biggest variation in pricing was for tax planning and advisory services in particular. For firms with revenue of as much as $250,000, approximately 23% said they charge less than $500 for these services, while a nearly equal number (around 21%) indicated they charge more than $2000.

Illinois voters approved a nonbinding proposal to add an extra 3% levy on annual incomes of more than $1 million, which could fuel a new effort to raise taxes on the state’s highest earners.

The ballot measure – which was an advisory question – won 60% of support, according to the Associated Press. About 90% of the votes have been counted.

“The vote is a gigantic step in the right direction,” said former Governor Pat Quinn, a supporter of the measure. 

Daniel Acker/Bloomberg

While the proposal has no legal effect, the vote opens the door to a new debate over ramping up taxes on the rich even as Illinois and Chicago, its biggest city, contend with population declines and a string of departures by major companies and wealthy residents. In 2020, voters rejected a separate measure backed by Governor JB Pritzker to replace the state’s flat tax on incomes with a graduated system that would raise rates on higher-earners.  

The Pritzker plan drew staunch opposition from billionaire financier Ken Griffin, who donated about $50 million to help torpedo the initiative. Griffin then left Chicago for Miami in 2022, moving the headquarters of his Citadel empire there as well. Companies from Caterpillar Inc. to Boeing Co. have also departed amid rising concerns over public safety, regulation and taxes. 

This year’s referendum asked voters if the Illinois Constitution should be amended to create the additional tax on income over $1 million. It called for using the proceeds to ease the state’s notoriously high property levies. 

Robust cash flow is king. Yet many accounts receivable teams find themselves mired in manual processes that are slow and, ultimately, costly. 

With the advent of the digital age, cash application has grown increasingly complex, labor-intensive and subject to errors. As organizations adopt a wider range of payment methods — such as ACH transfers, wires, credit cards and virtual cards — managing these diverse payments brings new challenges. Payments now stem from multiple sources and formats, often missing remittance details and forcing enterprises to hunt down data across bank portals, platforms and email inboxes. The result? Unapplied cash, delayed postings and frustrated customers due to unnecessary collection calls or credit holds. 

Addressing these challenges has brought about an innovation that overhauls operations to reduce errors, speed up payments and transform how teams handle receivables: AI-powered cash application. In an age where every dollar counts, AI is emerging as a game-changer in helping businesses optimize their cash flow processes with precision and scalability.

Ushering in cash excellence with automation

More efficient cash application processes lead to improved cash flow. Embracing cash excellence and a disciplined accounts receivable mindset provides more options to access and allocate funds. Rather than seeking outside financing, companies can instead quickly access cash to fund investments. For example, delayed payments increase DSO (days sales outstanding), potentially limiting a company’s ability to reinvest in its operations. A recent Deloitte survey showed a decline in executives’ confidence in their organizations’ ability to manage cash and liquidity, marking a 9.5% four-year trending decline from 2020. As a solution to this downward trend, leadership cites receivables management as an area that can benefit from AI technology, with 16.9% indicating they’ve already begun incorporating automation. 

The majority of business leaders (64%) believe AI will increase their company’s productivity, along with driving sales growth and enhancing customer relationships. They also expect AI solutions to reduce costs (59% of respondents) and streamline job processes (42% of respondents). The accounting function is no exception, with AI unleashing a new era of possibilities.

How AI accelerates cash application   

With manual methods, employees must resort to digging through records and making best guesses. With an AI-fueled cash application process, funds are delivered faster. By leveraging optical character recognition technology, AI systems scan remittance documents and extract crucial information like customer names, payment details and invoice numbers. Data is then cross-referenced with internal records, reducing the need for manual intervention.

For every payment processed, the technology gets smarter — and even more agile. AI systems fully integrate with ERP platforms, resulting in real-time synchronization of payment data. Once a payment is matched, it’s automatically recorded and updated in the ERP, potentially saving hundreds of hours annually.

Traditional methods of applying cash payments are prone to errors, including misallocated payments or incorrect matches. Since machine learning models analyze historical data and identify recurring patterns, the result is improved accuracy that has a ripple effect across the enterprise. With advanced analytics, teams can handle larger volumes of work without having to increase their headcount. For enterprises managing global transactions, AI can handle thousands of transactions from various regions, payment types and currencies.

Using AI to predict payment behaviors and optimize collections strategies also helps prioritize interventions and streamline cash flow management. McKinsey reports that companies experience reductions in collection costs by up to 15% and a 7% decrease in overdue payments by using AI tools. 

Fostering customer engagement and satisfaction with AI solutions

Retaining customers is critical. It’s estimated to take five to 20 times the amount of resources for an enterprise to acquire a new customer versus retaining an existing one. Overcharging or delays in processing refunds can damage trust with customers and leave a lasting negative impression. With AI, an accounting team can strengthen the brand’s reputation amid a competitive marketplace.

For instance, if a customer makes a payment that covers multiple invoices, a manual process may cause delays or errors in applying that payment correctly, leading to frustration and potential service interruptions. With automation, the payment is automatically split and applied across all relevant invoices in real time. A customer’s account is up to date without requiring them to follow up or dispute erroneous charges.

Managing complicated scenarios confidently

A more streamlined accounts receivable process reduces friction, ensuring customers view your company as a reliable partner and, in turn, leading to increased loyalty. Additionally, AI empowers employees to handle complications with confidence. Along with improving overall accuracy, an automated system will flag any problematic cases as exceptions to investigate further. 

With AI tools, accounting teams will know if and when their intervention is necessary, and they can be assured they’re conveying accurate information to customers. With machine learning algorithms, companies can identify unusual payment patterns quickly, reducing the risk of fraud or financial loss.

With AI-driven cash applications, enterprises can take advantage of a host of efficiencies, including improving cash flow bottlenecks, eliminating payment processing errors and reducing costs. Without cumbersome manual processes, accounting teams can move forth with higher-value tasks like strategic planning and customer relationship building.