Accountants Profit Target (Daily) Calculator
Estimate the daily fee income and hourly billing rate your accounting practice needs to meet its annual profit target.
Overview
Use this calculator to turn an annual accounting practice profit goal into a daily fee-income target. Enter your desired annual profit, fixed overheads, revenue-linked costs, expected billable days and average billed hours to estimate the revenue and average hourly rate required.
How it works
The calculator first adds your annual fixed overheads to your desired profit. It then adjusts this amount for costs that increase as a percentage of revenue, such as subcontractor fees or commissions. The resulting annual revenue requirement is divided by your available billable days to produce a daily fee-income target. Dividing that target by billable hours gives the average realised hourly rate required.
How to use this calculator
- 1Enter the annual profit you want the practice to retain after operating costs.
- 2Add annual fixed overheads, including staff costs, premises and software.
- 3Estimate variable costs as a percentage of revenue.
- 4Set the number of realistic billable days available during the year.
- 5Enter your average billed hours per billable day and review the daily revenue target.
Example Calculation
Annual profit target
$100,000
Annual fixed overheads
$150,000
Variable costs
20%
Billable days per year
220
Average billable hours per day
6
Daily fee income target
$1,420
With a £100,000 annual profit target, £150,000 of fixed overheads and variable costs of 20%, the practice needs about £312,500 in annual revenue. That is roughly £1,420 per billable day, or £237 per billed hour across six billed hours per day.
Frequently asked questions
What is a daily profit target for an accounting firm?
It is the average profit contribution the firm needs from each billable day to achieve its annual profit goal. The calculator also shows the higher daily revenue needed to cover costs.
What should be included in fixed overheads?
Common fixed overheads include employee salaries, rent, software subscriptions, insurance, professional fees, marketing, training and general administration.
What are variable costs in an accounting practice?
Variable costs are expenses that tend to rise as revenue increases, such as subcontractor payments, referral commissions, payment processing fees or delivery-specific expenses.
How many billable days should an accountant use?
Start with working days in the year, then subtract holidays, public holidays, sick leave, training, internal meetings, business development and administration time. Use a realistic estimate rather than every weekday.
Why is the required hourly rate higher than my usual charge-out rate?
The result is an average realised rate. It accounts for overheads, variable costs and non-billable time, so it can be higher than a headline rate if there are discounts, write-offs or unbilled work.
Can this calculator be used by a firm charging fixed fees?
Yes. Use the daily fee-income target to assess the value of monthly, annual or project fees needed across the year. The hourly rate is optional context for checking delivery capacity.
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Assumptions and warnings
Assumptions
- The annual profit target is the amount remaining after the fixed and variable costs entered.
- Fixed overheads are assumed to be incurred across the year, regardless of revenue level.
- Variable costs are assumed to be a consistent percentage of revenue.
- Billable days and billable hours reflect productive, chargeable time rather than all working time.
- Results are planning estimates and do not include tax, financing costs or exceptional items unless you include them in your figures.
Warnings
- This calculator provides a business-planning estimate only and is not financial or accounting advice.
- Actual results can differ because of client mix, write-offs, collection timing, pricing changes and unexpected costs.