CAS pricing works when the monthly fee is built up from the real cost of delivering the work, meaning the production hours behind the books plus the CPA review and advisory time the client actually uses. A fee copied from a competitor's menu or set by feel can undercharge for production, and then the advisory margin goes into cleanup and close work.
This guide shows how to build CAS pricing from a cost floor and how offshore production support lowers that floor. It then covers tiers, add-ons and the scope terms that keep a fixed fee profitable month after month. The worked example uses 2025 and 2026 US wage data so you can swap in your own numbers.
The client sees one monthly fee. The firm absorbs every hour behind it, and most of those hours sit in production work that the proposal described in a single line. Common causes include:
Each item is small on its own. Together they can turn a client that looked healthy on the proposal into one that barely covers its delivery cost. The fix starts with knowing your cost per delivery hour.
Knowing your cost per hour gives you the floor below which a fixed fee loses money. You can still bill a fixed monthly fee; the floor simply tells you where to set it.
Start with salary data. The US Bureau of Labor Statistics reports that the median annual wage for accountants and auditors was $83,680 in May 2025. Salary is only part of the cost. In the BLS employer cost survey for June 2026, wages and salaries accounted for 70.0 percent of private industry employer costs, with benefits making up the remaining 30.0 percent.
Grossing up the median wage for benefits gives about $119,543 a year in compensation cost ($83,680 divided by 0.70). Assume a staff accountant has about 1,500 hours a year available for client delivery once holidays, training, internal meetings and admin are removed. On that assumption, the cost per delivery hour is about $79.70, which the example below rounds to $80. Overhead such as rent and software is not in that figure, so your true number is higher.
Use your own payroll and utilization data where you have it. The goal is a single defensible cost rate for US delivery hours and a separate rate for any offshore hours, which comes from your provider contract.
List the monthly tasks for a typical client in each tier and estimate the hours. A client bookkeeping workflow that separates in-house and offshore tasks makes this much easier, because each task already has an owner. For most CAS clients the hours fall into these groups:
The first three groups are repeatable production work. The last three need US judgment, client context or both. That split is what makes offshore support change the economics of CAS pricing.
When production moves to an offshore team, the CPA firm keeps responsibility for the result. The AICPA Code of Professional Conduct says a member using a third-party service provider for services such as bookkeeping or tax preparation must adequately plan and supervise the third-party service provider's professional services so that the services are performed with competence and due professional care (ET 1.300.040). In pricing terms, review time is a cost line of its own, and it can rise in the first months of an offshore arrangement while handoffs settle.
The same Code adds a client communication step. Before disclosing confidential client information to a third-party service provider, the member should inform the client, preferably in writing that a provider may be used, and if the client objects, the firm either does the work without the provider or declines the engagement (ET 1.150.040). Put that disclosure in the engagement letter so it is handled once at onboarding.
If your CAS bundle includes tax return preparation, a stricter rule applies. Under Treasury Regulation 301.7216-3, when the preparer receiving the information is located outside of the United States, the taxpayer's consent prior to any disclosure is required. Build the consent step into onboarding for any client whose return work goes offshore.
The table compares the monthly cost of one CAS client delivered fully in-house with the same client delivered with offshore production. US hours use the $80 cost rate from Step 1. Offshore hours use an illustrative $18 per hour, which is a placeholder for your own contract rate and not a quote from any provider. For real offshore rate ranges by country, see this comparison of offshore accountant costs in India, the Philippines and the US.
| Task | In-house hours | Offshore mix: offshore hours | Offshore mix: US hours |
|---|---|---|---|
| Coding and reconciliations | 10 | 10 | 0 |
| Close entries, accruals, payroll entries | 4 | 4 | 0 |
| Reporting package and dashboard prep | 3 | 3 | 0 |
| Senior review of the close | 3 | 0 | 4 |
| Advisory meeting and prep | 3 | 0 | 3 |
| Client questions and document chasing | 2 | 0 | 2 |
| Total hours | 25 | 17 | 9 |
| Monthly cost | $2,000 | $306 | $720 |
Review of the close is set one hour higher in the offshore mix because the US senior is checking work prepared by another team.
Adding a 10% scope allowance for the questions and requests that every client generates:
At the same $3,670 fee, the offshore mix produces a margin of about 69%, against 40% in-house. Priced at the same 40% target margin, the offshore mix supports a fee of about $1,881 a month.
The saving gives the firm room to decide. One option is to hold the fee and put part of the saving into extra advisory hours, which is the work clients notice. Another is to lower the fee to win clients in a competitive market. Compare your result against CPA firm profit margin benchmarks by firm size before setting a target.
Once the cost floor is known, the pricing model decides how that cost is presented to the client.
Tiers keep sales conversations simple. A common structure starts with an Essentials tier covering bookkeeping and monthly reports. A Growth tier adds a formal month-end close with quarterly advisory meetings. An Advisory tier moves to monthly meetings and adds KPI tracking with a rolling forecast. Price each tier from the hour map for a typical client at that level, then define the account and transaction volume limits that keep a client in the tier.
A base fee works when the core work is predictable but clients want optional services. Common add-ons include payroll, bill pay, sales tax filings and 1099 preparation. Price each add-on per unit so it scales with the client.
Recheck 1099 add-on pricing for 2026. The IRS now requires Form 1099-NEC reporting for nonemployee compensation of $600 ($2,000 for payments made after December 31, 2025) or more during the calendar year. Some clients will issue fewer forms for 2026 payments, while vendor tracking and W-9 collection still take time, so a per-form fee alone may undercount the work. For the full process, see this 1099 checklist for accountants preparing client 1099s for the 2026 tax year.
Complex clients, for example those with several entities or industry-specific reporting, need custom quotes built from the same hour map. If your firm prices some CAS work by outcome, the cost floor still tells you which engagements are worth taking. Firm-wide pricing strategy, including the move from hourly to value-based fees, is covered in this guide to CPA firm pricing strategy and value-based fees.
A CAS fee should account for the drivers that change delivery hours:
Cleanup belongs outside the monthly fee. Price it as a one-time onboarding project with a defined start date and an hour estimate, then start the monthly fee once the books are current.
Pricing only holds if scope holds. Before signing a CAS engagement, confirm these points in writing:
On the delivery side, service levels with your offshore provider keep turnaround and error rates predictable, which keeps review time close to the estimate. These offshore accounting SLA clauses cover the terms that matter most. When you move existing clients onto the new model, a planned transition from in-house bookkeeping to an outsourced CAS team avoids a dip in quality during the switch.
Review each client's actual hours against the estimate every quarter. Clients that run consistently over the scope allowance move up a tier or get a fee change at renewal.
Offshore support fits production and preparation work: reconciliations, close entries, report drafts, dashboard updates, missing-item tracking and cleanup support. Advisory judgment, final review, client meetings, pricing and scope decisions stay inside the CPA firm. That division is what lets a firm move advisory services beyond compliance revenue without adding US headcount for every new client. For a broader view of how CAS practices are organized, see this practical guide to client accounting services.
Which CAS pricing model works for recurring monthly work? A fixed monthly fee, sold as tiered packages with add-ons for services such as payroll or 1099 work, suits recurring CAS work because the client knows the cost in advance. The fee should still be built from an estimate of monthly delivery hours so the firm knows its margin on each client.
Should cleanup be included in CAS pricing? Usually not. Price cleanup as a separate onboarding project with its own estimate, and start the monthly fee once the books are current. Open-ended cleanup inside a monthly fee tends to consume the first months of margin on a new client.
How does offshore support change CAS pricing? It lowers the cost of production hours such as reconciliations and close preparation. The firm can keep the fee and widen its margin, or use the saving to lower the fee or fund more advisory time. Review time by US staff must stay in the price because the firm remains responsible for the work.
Do clients need to be told when CAS work goes offshore? Under AICPA ET 1.150.040, a member should inform the client, preferably in writing, before disclosing confidential information to a third-party service provider. If tax return information goes to a preparer outside the US, Treasury Regulation 301.7216-3 requires the taxpayer's consent before the disclosure.
How often should CAS fees be reviewed? Compare actual hours with the estimate each quarter and adjust fees or tiers at renewal. A client that regularly exceeds its scope allowance needs a new tier or a change order.
Madras Accountancy supports US CPA firms with offshore production work for CAS clients, such as bookkeeping and month-end close support, while your team keeps review and advisory with the client. To talk through the production work behind your CAS clients, contact our team.
The section 4960 excise tax is 21% of nonprofit pay over $1M. From 2026 it covers all employees. See the medical carve-outs, Form 4720 and a worked example.
The paid family and medical leave tax credit is permanent from 2026. See the 12.5% to 25% rates, the premium option, the 6-month rule and how Form 8994 works.
Opportunity zones become permanent in 2027 under the One Big Beautiful Bill. See the new deferral, rural bonus, and the 2026 handoff.
