the great debate: timesheets vs. value-pricing
the essential managment tool.
by ed mendlowitz
pricing rates
gross profit in a professional services firm: opening a dialogue
plus specific ways to improve in services, marketing, sales, delivery and support.
by august j. aquila
price it right
accounting firms focus on top-line revenue or net profit. but are they focusing on what really matters?
more: tomorrow’s leader in 9 bullet points | checklist: 18 essential steps to effective billing | how to get partners to accept a new pricing philosophy | 12 pricing factors beyond cost | 13 questions about providing value | how to shift from production to marketing orientation
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profitable businesses involve more than just selling more products and services to increase revenues. there is an old joke in the retail business: a salesperson tells the manager that they are losing $1 on every shirt they sell. the manager says, “don’t worry, we can make it up in volume.”
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is it time to manage your receivables like a real business?
consequences: are there any?
by domenick j. esposito
8 steps to great
it never ceases to amaze me how lax many small and midsized cpa firms are when it comes to managing their work-in-process and accounts receivable and optimizing their cash flows.
more on strategic planning: profitability requires discipline | the link between strategy and winning on value | focus on an enhanced client experience | solve the partner comp problem | 6 rocks in the path to growth | use compensation to shape partner behavior | the importance of m&a culture due diligence
sloppy billing and collecting policies often result in lost billing opportunities (i.e., if you don’t bill it timely, clients forget the value you provided and resist receiving a bill 90 days after the work was performed) and for a need to have a relatively large line of credit. sloppy policies also result in year-end fire drills with clients when partners “beg” clients for cash before the end of the firm’s fiscal year end.
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11 ways to move to value pricing
plus: 13 benefits clients will happily pay for.
by rob nixon
as you go through the journey of value belief and client value perception, you have to be conscious of price parity.
more on strategy: are your prices too low? | 6 steps of moving to value pricing | feel good about yourself | how to build enduring relationships | they should all be ‘a class’ clients | accountants are the last trusted advisors | how to structure your firm for success | why average project value matters
if a client has been paying $5,000 for your service and even if you feel it is worth twice as much, the client may not pay much more for it – particularly if it looks like the same service. your client might pay 15 percent or 20 percent more, but double? – give me a break. unless you completely redesign your product offering so it looks completely different, your current client will have a hard time paying the price.
but when it comes to new services that the client has never bought before – different story. there is no price parity with a new service that has not been purchased before – charge at will!
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you cannot prove your value
you can, however, help clients and prospects discover it.
by hitendra patil
accountaneur: the entrepreneurial accountant
you cannot prove your value to your clients (and prospects).
you can not.
more on entrepreneurial strategy: certified blockchain accountant: from cpa to cba | who wants to be a comptometrist? | is blockchain an extinction event for accountants? | blockchain accounting is an oncoming train | how to fly the automation dragon to your dream practice | your clients hold a secret key to your practice growth | seven lessons for accountants from self-driving cars
they need to discover it themselves.
because value is perceived in their heads.
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never charge by a time unit
3 flaws with this business model.
by rob nixon
i would love to meet the person who invented time-based billing. i think this person is a complete business moron and i would have much pleasure in highlighting the unethical behavior that this method causes. this is probably the same person who invented write-offs as well. what a complete idiot.
the premise is that if you get the charge rate right and the time to do the job right, then the price is right. nothing could be further from the truth.
more on strategy: feel good about yourself | you can’t lavish time unless you have time to lavish | changing accountants: 2 true tales | your clients on your terms | how much should partners make? | be a history maker | why ‘steady as she goes’ isn’t enough | how to calculate a value price | boost efficiency and your bottom line | marketing must generate leads
time-based billing does not value the project. the only value of a project is what the market is prepared to pay for it. i am going to challenge your thinking of time-based billing and encourage you to adopt a new model of value pricing.
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checklist: 18 essential steps to effective billing
how to get paid what you’re worth. on time. every time.
by august j. aquila
price it right
is the phrase “effective billing philosophy” an oxymoron? i’m beginning to believe that it is.
more: 6 steps to making your new pricing happen | 5 ways to get clients to accept a new pricing philosophy | 11 alternative pricing methods | applying cobb’s value curve to your firm | the four types of competition | marketing and the 5 p’s
analysis of the results of current billing and collection procedures and policies reveals that, for the most part, they aren’t working very well. the fact is, they have not worked well for decades.
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tax season 2018: average fees set for 7% increases
but fees for entity returns are down. why?
6 steps to making your new pricing happen
create bundles for each service line.
by august j. aquila
price it right
this is where the rubber meets the road. the future of pricing professional services is making the move to value pricing.
more: 5 ways to get clients to accept a new pricing philosophy | how to get partners to accept a new pricing philosophy | 12 pricing factors beyond cost | 13 questions about providing value | how demand affects pricing | how to shift from production to marketing orientation | how traditional fee methods hurt firms
while you may want to make it an option for your firm, i strongly suggest that you make it the option. i know from experience that value pricing is better than billing for your time.
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5 ways to get clients to accept a new pricing philosophy
don’t just anticipate questions, plan for them.
by august j. aquila
price it right
once your partners are sold on a new pricing philosophy, you will need to communicate it to your clients.
more: how to get partners to accept a new pricing philosophy | preparing to change pricing philosophy | ethical issues in pricing | how utility and value affect pricing | understanding the product pricing life cycle
there are five ways to get clients to understand and accept the new pricing methods. each of these methods is discussed below.
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how to get partners to accept a new pricing philosophy
5 common objections … and 5 reasons to change. bonus: an 11-point fee audit.
by august j. aquila
price it right
before you announce new pricing policies to your clients, it is critical that you and all the partners in your firm embrace the new pricing philosophy. the entire process begins with the following:
more: preparing to change pricing philosophy | 11 alternative pricing methods | applying cobb’s value curve to your firm | the four types of competition | marketing and the 5 p’s | why choose a marketplace orientation?
- the firm’s willingness to make some changes
- an analysis of existing engagements and the economic impact that a different pricing strategy will have on the firm
- a review of how the firm is currently delivering and producing its services
- the firm’s overall relationships and communication style with its clients
preparing to change pricing philosophy
5 factors to consider.
by august j. aquila
price it right
once you have decided to adopt an alternative pricing philosophy, what do you do next?
more: 11 alternative pricing methods | 12 pricing factors beyond cost | 13 questions about providing value | how demand affects pricing | how to shift from production to marketing orientation | how traditional fee methods hurt firms
changing your firm’s pricing philosophy is really a three-step process. first, you need to consider several factors before suggesting a change. second, you need to get your partners to agree that it is a good idea, and third, you need to educate your clients so that they accept and understand the new approach.
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11 alternative pricing methods
when to use each, plus the marketing and operational perspective.
by august j. aquila
price it right
there are many ways to price professional services.
more: 12 pricing factors beyond cost | ethical issues in pricing | how utility and value affect pricing | understanding the product pricing life cycle | 4 ways a production orientation can harm a firm | price to get the maximum fee | 7 issues in partner retirement planning | is it time for a partner compensation checkup?
alternative pricing methods in the legal profession have received much more attention than in the accounting profession. in fact, entire publications have been issued by the american bar association (aba) on this particular topic.
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