pricing, fees & billing rates

the future of fees

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are you raising yours to close a salary gap?

by 卡塔尔世界杯常规比赛时间 research

when the 2024 rosenberg national survey of cpa firm statistics asked prominent consultants what’s coming down the pike in the accounting profession, an upheaval in fee structure came up a lot.

more: when staffing falls short, clients get culled | how accounting firms are dealing with retirement | next five years are critical for accounting firms | staffing turnover’s down, but why? | what’s your firm worth? private equity wants to know | the new pipeline: outsourcing and offshoring | is this the last year of accounting’s golden age?
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first, the good news: net fees are growing rather nicely.

  • net fees at firms billing more than $2 million jumped an average of 10.7 percent.
  • growth at firms billing over $20 million leaped by 12.5 percent.
  • even small firms, those with $2-5 million in revenues, grew by 9.1 percent.

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using change orders with scope

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how is a change order like taking your car to a mechanic? read on.

by jody padar
radical pricing – by the radical cpa

change orders are the result of a well-scoped process. they occur when a client adds a service not included in their original engagement or when a manager or partner requests a service be scoped and priced separately. the client decides whether or not to proceed with the change.

 

more jody padar

the radical cpa

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the process of a change order is similar to taking your car to the mechanic for an oil change. during a diagnostic, they find you need a tire alignment as well. the alignment is not included in the services you bought, but you’re curious to know how much it would cost. depending on the price, you’ll add it to the original quote, or you won’t.

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do as little as possible

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older businessman taking a coffee break

and still have happy clients.

by ed mendlowitz
202 questions and answers: managing an accounting practice

question: i have many clients who always expect me to do extra work as part of our fixed-fee agreement. how can i get paid extra for work beyond the scope of our agreement?

more: want to merge? here are 23 things to request | i’m just starting out; why join an association? | i’m 76. should i slow down? how? | ask for what you’re worth | two options for collecting past due fees | when board service gets tricky | eleven ways new staffers can help bring in business | busy season is over, so it’s time for some resolutions | want to merge? six steps to take | how to start providing family office services
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response: this is a recurring theme, and one that has many answers. one approach: don’t take on the extra work.

here is another approach.
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who needs to understand scope?

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don’t make the mistake of allowing a partner to scope the engagement alone.

by jody padar
radical pricing – by the radical cpa

partners, managers and accounting professionals must all understand scope to deliver the right amount of work for the engagement.

more jody padar |the radical cpa

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everyone needs to be aligned. everyone needs to know what the customer ordered, how to deliver it and where the work ends.

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when to walk away from a prospective customer

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enabling your team to fire clients supports the ethos that your team is your most valuable asset.

by jody padar
radical pricing – by the radical cpa

there are few ways to sink an accounting firm faster than winning bad clients. they will rob your profitability, steal your sanity and cause havoc among your staff and other client relationships.

more jody padar

the radical cpa

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ask yourself these questions and be prepared to walk away if you don’t get the right answers:

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the new value pricing paradigm with david yeghiaian and michelle river | gear up for growth

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a 1,200% gain in billings.

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gear up for growth
with jean caragher
for 卡塔尔世界杯常规比赛时间

accountants struggle with moving from the traditional billable hour model because they have concerns about accurately estimating costs, managing expectations, and measuring work in progress. this change requires a shift in mindset and firm-wide accountability, which can be challenging but necessary to remain competitive.

gear up for growth spotlights the best strategies for smart and effficient growth in today’s competitive landscape. more gear up for growth every friday here.|  more capstone conversations with jean caragher every monday | more jean caragher here | get her best-selling handbook, the 90-day marketing plan for cpa firms, here | more 卡塔尔世界杯常规比赛时间 videos and podcasts here

david yeghiaian, chief strategy officer for kerberrose, and michelle river, ceo of fore, llc, and developer of advanced pricing methods®, show how pricing impacts profitability, client experience, cross-selling, and firm growth on gear up for growth, with jean caragher, president of capstone marketing, and powered by 卡塔尔世界杯常规比赛时间.

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how to scope before you price

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it’s a learning process that benefits both you and the client.

by jody padar
radical pricing – by the radical cpa

accurate pricing relies heavily on thorough scoping to measure the engagement, and good scoping defines the deliverables, sets the client’s expectations and calculates the labor it will take to get the job done.

 

more jody padar

more pricing

the radical cpa

from success to significance: the radical cpa guide

radical pricing

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with that said, here’s how your scoping process helps you determine the ultimate price:

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when to increase scope and when to let it go

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the most crucial aspect of scope is for everyone to know precisely what falls within the lines of the scoped services and what does not.

by jody padar
radical pricing – by the radical cpa

there’s a time to increase scope and a time to let it slide. let’s explore these two options.

it’s professional responsibility to inform a client when a request is out of scope. in this instance, you have two options: either make it a separate engagement or include it in the existing service package. it’s important to have everyone on the same page about what is within scope and what falls outside of it.

more  jody padar | pricing | the radical cpa | from success to significance: the radical cpa guide | radical pricing

it would be best if you always built into your pricing agreements a 20 percent buffer to protect you against pricing mistakes. this doesn’t mean you should do work outside the scope for free, but if a client asks for a service not included, you could decide to let it go if the amount is immaterial.

however, if the value is greater or you need to investigate further, be clear with your team and the client.

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determining a price … and when to change it

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consider at least five issues when deciding how much to charge clients for your services.

by jody padar
radical pricing – by the radical cpa

what is the lowest monthly fee paid by any of your clients? you probably don’t want to bring on any new clients at a lower fee, so use this as your new business baseline. no one enters your firm without paying this baseline monthly service fee.

more jody padar

the radical cpa

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however, the question remains whether the client will be billed on a fixed-price or value-priced basis. here are five issues to consider as you make this decision:

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seventeen questions to ask when scoping

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asking the right questions proves critical in selecting the right-fit clients.

by jody padar
radical pricing – by the radical cpa

using subjective questions helps you assess what the prospective client considers valuable. this means understanding which services and solutions they see as having the biggest impact on their financial health. it also gives you insight into where they are hurting most in their business.

more: which clients should you scope? | perfecting the client needs assessment | create more meaningful kpis | five reasons to ditch timesheets for good | six steps to creating a standardized practice | value pricing requires defining your clients | stop selling time | three critical factors drive the value pricing trend | stop looking for talent that does not exist
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this process is time-consuming because it sets the stage for your relationship moving forward. take your time and collect all the data, documentation and subjective input so you can gain a holistic view of the customer’s current situation. let’s take a look at some of the questions you can ask and why they are important.

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which clients should you scope?

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the process should align you with the client on the value and which services will be delivered.

by jody padar
radical pricing – by the radical cpa

scoping is a time commitment, so know that the client is worth the commitment and they have the revenue to back it. start by setting a minimum price point you will charge for the assessment process. if the client falls below your threshold price point, it doesn’t mean you’re not going to scope them, it just means the process will be less complex and can probably be done within an hour.

more: perfecting the client needs assessment | four steps to scoping for alignment … and the #1 rule to remember | here’s how profit sharing improves your firm | productize services for consistent client value | four ways automation pushes the paradigm shift | how value pricing impacts your employees | why pricing is so disruptive | accounting disruptors are heading your way … with deep pockets | advisory work must be priced by value, not hours
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for smaller clients, it helps the process if they arrive at the assessment with all the necessary information. you can look at their quickbooks data and tax returns to get a strong sense of what they need and how long it will take to deliver. scoping a small, straightforward client will become second nature with time. but be careful about being too casual when scoping smaller clients. if you miscalculate, you are still opening your firm up to risk.

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perfecting the client needs assessment

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standardization will make you more efficient, effective and profitable.

by jody padar
radical pricing – by the radical cpa

a client assessment is an onsite or virtual session where you observe the client’s accounting system on which you’ll be working. this is your opportunity to see how they run their business: their software, their processes and who does what. this is when tasks and responsibilities are clarified and assigned. both the client and your firm need to understand their responsibilities in this new partnership.

more: four steps to scoping for alignment … and the #1 rule to remember | getting aligned on scope helps your team and your clients | create more meaningful kpis | here’s how profit sharing improves your firm | five areas to ground new metrics other than time | five reasons to ditch timesheets for good | productize services for consistent client value | digitize clients for standardization | six steps to creating a standardized practice | four ways automation pushes the paradigm shift | are you the key signal caller for your clients?
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

 

this assessment also allows you to fully understand the client’s service needs. it is a real-world assessment of services, budget and the work required to provide deliverables. it will also allow you to understand what it will take to onboard them. again, this assessment goes both ways. it’s worth assuming you have competition, so take advantage of this time to impress the client with some consultative advice demonstrating the value you bring to the table – this is especially true if you are charging for the assessment.

one of the key benefits is the ability to limit your risk and as you:

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hourly billing doesn’t cover the value; now what?

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a lesson in applying judgment.

by ed mendlowitz
202 questions and answers: managing an accounting practice

question: i helped a client get a bank loan, negotiated the rate and fees with the bank and had a tight covenant loosened. i prepared a personal financial statement, prepared a compilation statement for the business, projected financial figures and accounts receivable projections and reviewed and discussed them with the bank, and had numerous conversations with bank and client.

more: ask for what you’re worth | the top tip for reviewing tax returns | you have to start somewhere | two options for collecting past due fees | you can’t win with lowballing | nine reasons not to specialize | when board service gets tricky | yes, you have to share work papers | hiring experience vs. training inexperience | eleven ways new staffers can help bring in business | should you merge? here’s how to chart your path
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

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