Earn Free CPE: The Billable Hour Is Blocking AI Adoption — And the Data Proves It
Two-thirds of accounting firm revenue still comes from hourly billing. In 2025, that number actually moved in the wrong direction.
Chelsea Summers of Inside Public Accounting put it plainly: if AI makes your work faster and you're billing by the hour, what happens to your fees? You'd have to cut them. And no firm is going to do that voluntarily.
That's the tension the IPA survey data keeps surfacing. All the talk about AI transforming the profession — and the pricing model that punishes efficiency hasn't budged.
Chelsea and I talked about this and a lot more on Episode 112 of the Earmark Podcast. And now you can earn free CPE credit for listening.
Register here: https://earmark.app/c/3370
Here's what else we explored:
Offshoring is paying off in the numbers: Over half of the largest accounting firms now use offshore staff, and the data backs it up. Firms with offshore teams had 8.1% organic growth versus 7.5% for those without, and 9% better margins. The model has shifted too: offshore staff are no longer processing in centers. The work has moved up the value chain, from data entry to manager-level work and even client-facing advisory.
Top firms don't grind harder: The IPA names its "best of the best" firms based on 30 operational metrics. Those firms have revenue per FTE of $272,000 versus $220,000 for everyone else. But their utilization rates and hours worked are nearly identical to average firms. The difference is leverage — 17.7 staff per partner versus 11.8 — and pricing confidence. Partner bill rates at top firms run $588 versus $448 at the average.
Firms are underpricing, and they know it: When firms raise prices aggressively, clients stay. Chelsea's heard it over and over: raise rates 40%, and they all stay. The market can absorb it. Firms that aren't raising prices every year are leaving money on the table and may be signaling a lack of confidence in their own work.
AI ROI is real, but narrow for now: The clearest returns are in workflow automation, document processing, and tax research. The blockers aren't technical. They're partner skepticism and change management. Firms that tabled AI conversations to focus on busy season are now months behind, in a space where months matter.
How to earn free CPE
Listen to Episode 112, take a short quiz, and get your certificate. It's free.
Register here:https://earmark.app/c/3370
