The concept of Value Pricing in the Accounting Industry is nothing new, however many accounting SME firms struggle with implementing it. I have heard from many accountants that “it would be against my moral beliefs to charge more than my hourly posted rate.” “Charging for assurance as part of my services is out of the question.”
Lets be straight up here. When you are charging and hourly rate for all your work be it compliance or audit work you are a commodity. Any business owner worth their salt would ask what is it that you accomplish in that hour. Do all accountants work at the same speed and efficiency?
𝐖𝐡𝐞𝐧 𝐦𝐨𝐬𝐭 𝐨𝐟 𝐲𝐨𝐮𝐫 𝐰𝐨𝐫𝐤 𝐢𝐬 𝐜𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐛𝐚𝐬𝐞𝐝, 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐨𝐰𝐧𝐞𝐫𝐬 𝐬𝐞𝐞 𝐲𝐨𝐮 𝐚𝐬 𝐚 𝐧𝐞𝐜𝐞𝐬𝐬𝐚𝐫𝐲 𝐚𝐧𝐝 𝐮𝐧𝐰𝐚𝐧𝐭𝐞𝐝 𝐞𝐱𝐩𝐞𝐧𝐬𝐞. It’s transaction based. If the business owner doesn’t see your value they will go shopping for a cheaper service.
Consider the last time you took your vehicle in for service. The oil change was a set fee with the exception of the quality of the oil you chose. The Brake Job was a set fee. That’s the fee you paid no matter if the mechanic did it in 20 minutes or 25 minutes. Voila. An oil change and a brake job are now a product. So why can’t you do the same for bookkeeping and tax services and add a dash of assurance. It’s clean and you get to bill the client at the beginning of the month instead of the end of the month. What would that do for your cash flow? 𝐀𝐫𝐞 𝐲𝐨𝐮 𝐭𝐞𝐚𝐜𝐡𝐢𝐧𝐠 𝐲𝐨𝐮 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐜𝐥𝐢𝐞𝐧𝐭𝐬 𝐭𝐡𝐢𝐬 𝐬𝐭𝐮𝐟𝐟?
The big advance of value (product) pricing is you can add features like payroll, state tax and federal tax filing or a monthly review with the client. You create a pick list and price according. Just like the quality of oil you happily chose at the service garage. A one million dollar low margin client does a lot more work than a million dollar high margin client. Doesn’t the same apply for your accounting business?
𝐒𝐭𝐨𝐩 𝐟𝐞𝐞𝐥𝐢𝐧𝐠 𝐥𝐢𝐤𝐞 𝐲𝐨𝐮 𝐰𝐨𝐮𝐥𝐝 𝐛𝐞 𝐜𝐡𝐞𝐚𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐜𝐥𝐢𝐞𝐧𝐭 𝐢𝐟 𝐲𝐨𝐮 𝐰𝐞𝐧𝐭 𝐭𝐨 𝐯𝐚𝐥𝐮𝐞 𝐩𝐫𝐢𝐜𝐢𝐧𝐠. If you are feeling guilty then you don’t value the service you provide. That is a whole other conversation.
If you keep saying you are worth more than you charge then do something about it. Work less and make more is not a myth.