Accountants Revenue Target (Monthly) Calculator
Estimate the monthly revenue an accounting practice needs to cover costs, pay the owner and achieve a chosen profit margin.
Overview
Use this Accountants Revenue Target (Monthly) Calculator to estimate the monthly revenue your accounting practice needs to cover overheads, fund owner compensation and retain a target profit margin. It also translates that total into a weekly target, average hourly rate and approximate client count.
How it works
The calculator adds target owner compensation to monthly overheads, then divides that total by one minus the desired profit margin. This produces the revenue required for costs to represent the remaining share of revenue. It divides the revenue target by billable hours to estimate the required average hourly rate, by 4.33 to show a weekly pace, and by the average client fee to estimate the number of clients needed.
How to use this calculator
- 1Enter the monthly compensation you want the owner or partners to receive.
- 2Add all regular monthly practice overheads.
- 3Set the profit margin you want the business to retain.
- 4Enter realistic billable hours available during a typical month.
- 5Add your average recurring monthly fee per client and review the targets.
Example Calculation
Target monthly owner compensation
$8,000
Monthly business overheads
$6,000
Target profit margin
20%
Available billable hours per month
100
Average monthly client fee
$1,750
Monthly revenue target
$17,500
With $8,000 of owner compensation, $6,000 of overheads and a 20% target margin, the practice needs about $17,500 in monthly revenue. That is about $4,042 per week, $175 per billable hour, or 10 clients at an average monthly fee of $1,750.
Frequently asked questions
What is a monthly revenue target for an accounting practice?
It is the amount of monthly revenue the practice aims to generate to cover planned costs, pay owners and meet a profit goal.
Should owner salary be included in business overheads?
You can include it in overheads, but enter it only once. This calculator provides a separate owner compensation field to make the target easier to see.
How is the target hourly rate calculated?
The calculator divides the monthly revenue target by the billable hours you expect to have available that month.
Why is my required hourly rate higher than my standard rate?
Your realised rate can be affected by non-billable work, discounts, write-downs, unpaid invoices and a client mix with lower-fee services.
How many clients do I need to reach my revenue target?
The estimate divides the revenue target by your average monthly client fee and rounds up to the next whole client.
Does the calculation include tax or debt repayments?
No. Add such items to your monthly overheads if they are recurring business cash commitments you want the target to cover.
Explore Related Calculators
Assumptions and warnings
Assumptions
- Owner compensation is treated as a monthly business cost for planning purposes.
- Your target profit margin is calculated after the owner compensation and monthly overheads entered.
- Billable hours represent time that can realistically be invoiced and collected during the month.
- The client estimate assumes each client pays the stated average monthly fee.
- Results are planning estimates and do not include unentered costs, taxes, debt repayments or late payments.
Warnings
- This calculator provides a business planning estimate only and is not financial, tax or accounting advice.
- Review your targets regularly because fees, capacity, client mix, costs and collection rates can change.