Accountants Profit Target (Hourly) Calculator Examples
Worked examples showing how profit goals, capacity, utilization, and collections affect accounting practice hourly billing targets.
These examples show how the same calculation changes for different practice sizes and operating assumptions. Each result is an average collected hourly rate, not a prescribed fee for every client or service.
Solo practitioner with modest overheads
Lower-cost solo practice
Input Summary
Profit target
£60,000
Owner salary or drawings
£50,000
Annual overheads
£40,000
Hours per week
35
Working weeks
46
Billable utilization
60%
Collection rate
97%
Calculation Breakdown
- 1Annual working hours35 * 461,610 hours
- 2Effective collected billable hours1,610 * 0.60 * 0.97937.02 hours
- 3Revenue target60,000 + 50,000 + 40,000£150,000
- 4Hourly rate150,000 / 937.02£160.08 per hour
Result Summary
Hourly rate
£160.08 per hour
Accountants Profit Target (Hourly) Calculator
The practice needs £150,000 of revenue and approximately £160.08 per collected billable hour.
Growing practice with staff costs
Medium-sized accounting practice
Input Summary
Profit target
£150,000
Owner salary or drawings
£100,000
Annual overheads
£300,000
Hours per week
40
Working weeks
47
Billable utilization
70%
Collection rate
98%
Calculation Breakdown
- 1Annual working hours40 * 471,880 hours
- 2Effective collected billable hours1,880 * 0.70 * 0.981,289.12 hours
- 3Revenue target150,000 + 100,000 + 300,000£550,000
- 4Hourly rate550,000 / 1,289.12£426.65 per hour
Result Summary
Hourly rate
£426.65 per hour
Accountants Profit Target (Hourly) Calculator
The firm needs £550,000 in annual revenue and an average recovered rate of about £426.65 per hour.
Effect of weak collections
Same costs with lower collection rate
Input Summary
Profit target
£100,000
Owner salary or drawings
£80,000
Annual overheads
£120,000
Hours per week
40
Working weeks
46
Billable utilization
65%
Collection rate
90%
Calculation Breakdown
- 1Annual working hours40 * 461,840 hours
- 2Planned billable hours1,840 * 0.651,196 hours
- 3Effective collected billable hours1,196 * 0.901,076.4 hours
- 4Hourly rate300,000 / 1,076.4£278.71 per hour
Result Summary
Hourly rate
£278.71 per hour
Accountants Profit Target (Hourly) Calculator
At a 90% collection rate, the required average hourly rate rises to about £278.71.
How to Read Your Results
The annual revenue result is the total fee income needed before considering taxes not included in overheads.
The hourly result is an average across collected billable work; actual client or service rates can be above or below it.
Effective collected billable hours are lower than total working hours because they allow for non-billable work and uncollected fees.
A higher target profit, salary, or overhead figure increases the revenue and hourly rate required.
Lower utilization or lower collections reduce usable capacity and increase the required hourly rate.
Assumptions & Important Notes
- Examples treat all amounts as annual figures in pounds sterling.
- Owner pay is included once, separately from the profit target.
- Utilization and collection rates are planning estimates rather than guaranteed outcomes.
- No taxes, borrowing costs, or capital purchases are added unless they are included in overheads.
Related Examples
Frequently Asked Questions
Can a small accounting practice use a lower hourly target?
It may do so if its combined profit, owner pay, and overhead target is lower or if it has more effective collected billable hours. The calculator shows how those factors interact.
How do I use the hourly result for fixed fees?
Estimate the delivery hours for a service, multiply by the target hourly benchmark, and then consider the scope, risk, and desired margin when setting a fee.
Why do these examples use working weeks rather than 52 weeks?
Using fewer than 52 weeks allows for holidays, public holidays, training, sickness, and other periods when normal work is not planned.
Is a 100% collection rate realistic?
It is an assumption that means all invoiced fees are collected. A lower rate can be used where discounts, disputes, write-offs, or bad debts are expected.
Ready to calculate your own result?
Use the live calculator with your own inputs, timing, and preferences.