pricing, fees & billing rates

are accountants charging too little?

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pensive woman staring while surrounded by various denominations of floating currency

size matters in partner income. (aicpa map)

hourly billing on the decline but still holding on.

by 卡塔尔世界杯常规比赛时间 research

by all indications,  cpa firms are outperforming the general economy by a very satisfying margin.

but are they charging enough?

more: chatgpt for the reluctant cpa | cpas needed to help small biz adopt ai | revenue growth is top priority for small firms | survey shows challenges, priorities shifting | survey shows that tech remains the great divide | is the cpa business model the clog in the pipeline? | can big data spot financial fraud? | will unclogging the accounting pro pipeline kill mobility? | accountants cozy up to clients with cas | accountants torn over 2024 economy, offer advice | accountants bullish on income
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all categories of median net fees show substantial increases from 2021 to 2023 in the latest aicpa national management of an accounting practice survey:

  • net client fees leaped up 24 percent.
  • net client fees earned since prior year: up 15 percent.

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the convergence of trends makes pricing changes imperative

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kill the billable hour to earn what you deserve.

by jody padar
the radical cpa

the speed of change is faster than ever. how are you going to react to it? that’s what i’m really preparing you for – redesigning your entire business model to become a more client-centric advisor. value-based pricing models are the key component but not the whole story.

more: stop looking for talent that does not exist | advisory work must be priced by value, not hours
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today’s automation, new competitors, staffing challenges and new technologies are conspiring to bring clients more value than they could have enjoyed before. all of it is shifting the way you need to think about your services, what clients value and how you get paid fairly for the expertise you bring to the table.
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stop looking for talent that does not exist

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change processes to pivot from people problems. 

by jody padar
the radical cpa

if you’ve posted a job for an accountant in the past few years, you know people are hard to come by. the number of responses you received was likely down if you were lucky enough to find any at all.

more: advisory work must be priced by value, not hours | how hard do you work to keep your clients? | four things to know about social media | internal communications are underrated | four things better than a company song | let’s lose the word ‘image’ | the risk in not understanding risk | what your marketing program can and can’t do | nine reasons that prospects say yes | how marketing evolved to 3.0
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according to a recent aicpa trends report, the number of people graduating with a bachelor’s degree in accounting is down, and we’ve seen a steady decline since 2015. all this while half of u.s. cpa firms have increased the number of new graduates they want to hire. a lot of us are looking for staff that simply does not exist.

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advisory work must be priced by value, not hours

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technology pushes us to handle more advisory work, which allows more value pricing. 

by jody padar
the radical cpa

as a professional in the industry, you may find some of what you do easy. just because you find it easy doesn’t mean it isn’t valuable and worth more than the time you put into it. if it were truly easy, your clients would be doing it themselves rather than paying you.

more: how hard do you work to keep your clients? | four things to know about social media | internal communications are underrated | four things better than a company song | let’s lose the word ‘image’ | the risk in not understanding risk | what your marketing program can and can’t do | nine reasons that prospects say yes | how marketing evolved to 3.0
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

undervaluing ourselves and what we bring to the table is a chronic problem plaguing accountants and cpas. why do i say this? because people pay more for the luxuries they value. let’s look at a comparison:

today, the msrp of a cadillac escalade is over $81,000 while the msrp of a chevy suburban is slightly under $60,000. if these automobiles were priced according to the time it takes to make them, plus the cost of their parts, the difference between their retail prices would probably be far less. to maximize profits, gm spends a lot of time and money researching how much their customers value their different products. certainly, the brand makes a difference, but the cadillac also offers a more luxurious package. it doesn’t cost gm a lot more money to offer these luxuries, but their customers place a much higher value on them, and gm understands that value.

pricing according to value really isn’t a radical concept!

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two factors determine firm profitability

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magnifying glass showing bar charts

you’d think accountants could agree on a common definition. nope.

by marc rosenberg
the rosenberg practice management library

if you asked the president of a fortune 500 company or the owner of a restaurant to define profitability, they would be able to give a quick, definitive answer. not so with cpas.

surely, you’ve heard the story, perhaps apocryphal, of the company that was interviewing for a new cpa firm. only one question was asked of each candidate: “how much is two plus two?” the firm that won the bid gave the answer, “how much would you like it to be?”

more: don’t make firm profitability a goal | core values: why your firm needs them | voting on ownership basis? three better methods | fifteen big questions for your next strategy session
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the same can be true of cpa firm profitability. how do we measure it? you would think that the uncontested champions of measuring financial data, cpas, would have this down to a science. but such is not the case.
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