How To Price Not-For-Profit Jobs

My Chicago roundtable group is in its 20^th year.  It consists of 23 of the 30 largest local CPA firms in Chicago.  Questions are frequently posed to the group by a member.

The latest:  How do firms price NFP jobs and what are the variables that affect pricing decisions? We received some excellent feedback on this:

1. Annual budget and number of employees.
2. Quality and experience of the staff; condition of accounting records.
3. Complexity of the work.
4. Size of balance sheet and other statements required.
5. Changes in the organization from prior year.
6. Amount and size of prior year-end journal entries.
7. The source of the revenues is real important; various government and private donors may have reporting requirements that create extra work for the auditor.
8. One firm said they won’t touch a NFP if the job will exceed 60 hours.
9. Attractive NFP audits are those who have prestigious board members.
10. A 501c3 (charity) is generally more expensive than a 501c6 (trade association).
11. Our subjective evaluation of the NFP’s contribution to society.
12. Almost all firms discount fees; discounting much more likely if it is summer work.
13. Pricing jobs is heavily dependent on what the competitors are charging.
14. How long predecessor firm took to do fieldwork and how the engagement was staffed.
15. Realization targets varied from 40% to 70%.