Bundling Xero and other software into your fixed fees? It could be hurting your margins and confusing your clients. Learn why leading firms are unbundling and how to do it in a way that’s clear, scalable, and profitable.
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Why Bundling Software Fees Could Be Hurting Your Business
For years, accountants have been encouraged to bundle. Package everything into one neat fee. Wrap software into the monthly price so clients feel like they’re paying for a single service.
But for many firms, bundling software fees like Xero into your engagement letters is slowly eating away at your profit. It’s also making it harder to talk about pricing with clients.
In this blog, we’ll explore why bundling causes more problems than it solves, and what leading firms are doing differently.
This blog is based on a recent webinar. If you'd rather watch, here's the recording.
Bundling software means you absorb rising costs
When you include software in your fixed fees, you’re also taking on the cost risk. That means when prices go up, your margins shrink.
Aly Garrett from All In Advisory shared how that played out in her firm: “We were bundling Xero. And people get new employees, you're bundling that cost in. So the client doesn't actually understand that sometimes you're not giving them a price rise, you're just giving them the tech software rise.”
By treating software as a disbursement rather than an internal cost, you create a clear line between your services and your clients' tech stack. That way, when there’s a price increase from a platform like Xero, you can pass it on directly and transparently, without needing to justify a broader fee change.
How to decide what’s an internal cost and what’s a client disbursement
Some software genuinely is an internal cost. Things like workflow tools, document storage, or internal chat platforms. But when the software exists only because of the structure or needs of the client, like Xero or BGL for super funds, it becomes a cost directly tied to client work.
“If I didn’t have any companies, I wouldn’t have BGL,” Aly explained. “If I didn’t have any super funds, I wouldn’t have BGL Super Fund. So I think in that regard, I’m looking at it like… there are pieces of software that I use that enable me to prepare the work for the client, that the client receives benefit from.”
That’s the key distinction. If you only need the software because of a specific client, that’s a client disbursement, not a business overhead.
Clients won’t push back as much as you think
When Aly started unbundling software fees from her services, she expected pushback. It didn’t come.
In fact, she saw quite the opposite. “We pushed it back to the clients… not one single thing happened.” The idea that clients would be upset was a story she had told herself. In reality, they understood.
That mirrors what happened when she passed on credit card processing fees. “Not one single person pushed back. I didn’t lose a client.”
Clients live in a tech-heavy world too. Most already pay for multiple tools in their own business. So when you explain software as a separate charge, it makes sense.
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