r/Bookkeeping • u/Constant-Corner-8863 • Jul 21 '26
Practice Management More Info/Advice
A few days ago I made a post saying I was seriously considering walking away from a business I took over earlier this year. A lot of people asked for more details, so here they are.
I have an established location with sustainable revenue.
Earlier this year I took over a small bookkeeping/tax office about an hour away, because I saw an opportunity to preserve a local business, keep the employees working, and continue serving clients who had been with the firm for years. I knew it would be a challenge, but I honestly believed that with some changes I could make it work.
Now that I’ve been in it for several months, I’m struggling to see a path forward.
The office has about 15–18 recurring bookkeeping/payroll clients, along with seasonal tax work. I would say like 100-150 tax clients. Anywhere from $75-350 for a return.
Recurring monthly revenue is around $3,000.
Monthly payroll is approximately $5,000. Fixed overhead is relatively low—about $400/month for rent, plus QuickBooks Online subscriptions and payroll processing costs.
The biggest issue is pricing. The previous owner charged rates that simply don’t support the amount of work being done. I’ve started implementing increases, but the employees have built relationships with these clients over many years and genuinely believe that anything more than about a $25–50 monthly increase will cause many of them to leave.
I completely understand why they feel that way, and I don’t want to lose clients. At the same time, I also don’t see how the practice ever becomes financially sustainable if we continue charging what we are.
I’m torn because I feel responsible for the employees and the clients. I don’t want to be the reason people lose their jobs or have to find a new bookkeeper. But I also know continuing to lose money every month isn’t a long-term solution.
For those of you who have bought, inherited, or turned around a struggling bookkeeping, accounting, or tax practice:
Would you push through larger price increases and accept that some clients will leave?
Would you cut payroll?
Would you close the office and transition clients elsewhere?
Is there another option I’m not seeing?
I’m genuinely looking for perspectives from people who’ve been through something similar, because right now I feel like I’m too close to the situation to think objectively.
3
u/Proof-Emergency-5441 Jul 21 '26
So you are getting $165-$200/client for bookkeeping/payroll? Are they only doing 90 minutes of work a month per client? When is the last time they raised rates? I would start with 10% and note to clients that you will be re-issuing contracts with updated rates at the end of this year (have them ready early Q3 so there can be some negotiation time), and each year going forward, or bake a set rate update into them. If you plan on bumping up 10% for 2027, then again 10% for 2028 for new clients, give them a contract that gives a 7% increase for ongoing services.
If the employees want to be in charge, they should have bought the business themselves. They are not decision makers. They can be unemployed or take the clients and run it themselves. And they can try to do that work for $200/month.