The accounting profession spends a lot of time debating the future of the billable hour. But a more practical question may be what comes next.
As firms invest in technology and shift toward fixed-fee and value-based pricing, traditional hours-based metrics tell only part of the story. The firms with the clearest view of performance may be the ones measuring outcomes such as revenue per FTE, leverage and profitability alongside utilization.
Early results from IPA’s 2026 Practice Management Survey suggest that shift is already underway.
Among firms that have responded so far, the share of revenue generated through traditional charge-hour billing has declined, while fixed-fee and value-based pricing continue to gain ground. That trend has implications beyond pricing.
When revenue is closely tied to hours worked, measures such as utilization and realization naturally become central indicators of performance. As firms increasingly price work based on value, scope or outcomes, leaders need additional ways to evaluate whether the business is operating efficiently and growing sustainably.
Many of the measures gaining attention focus less on activity and more on business performance.
Revenue per FTE, for example, reflects how effectively a firm converts its workforce into revenue. Leverage provides insight into how work is distributed across partners, managers and staff. Revenue per partner and profitability metrics offer a broader view of a firm’s economic performance than hours alone.
Several of those measures moved in a positive direction in the early results.
Revenue per FTE, revenue per partner and leverage all increased, suggesting firms are generating more value from existing resources even as they continue investing in technology and evolving their operating models.
This does not mean traditional metrics are disappearing. Hours, utilization and realization remain important management tools for many firms and service lines.
But the conversation appears to be broadening.
The shift away from hours is often framed as a pricing issue. It may be equally a measurement issue. As technology changes how work gets done and value-based pricing becomes more common, firms need a broader set of indicators to understand performance and make informed business decisions.
The June edition of IPA Insights explores emerging trends in pricing, technology investment, succession planning and other issues shaping the future of accounting firms. Purchase the report here: https://form.jotform.com/253235687892168.
