The rush of landing a new client: There’s nothing like it. ✨
For entrepreneurs, you live and breathe for sales calls. It scratches the itch you haven’t been able to reach working for someone else. But don’t get too starry-eyed by the glow of a shiny new client. Keep your head level and establish accounting service pricing for your firm that definitively sets your business up for success in profitability and in doing the work you and your team most want to do.
Let’s dive into how to price accounting services for your firm step-by-step and why it’s so important.
Why Accounting Pricing Is Critical to Growing the Firm of Your Dreams
People hate talking about money. In fact, one in five people admit to never talking about it ever. We get it; money is a powerful force that can change perceptions of people in our lives and how they live theirs. And when it comes to talking about money in business, it gives your customer even more information.
By discussing money and establishing prices for your accounting services, you’re not only determining how you build your business, but you’re also sharing your cards with your clients about what it’ll be like to work with you. For example, a high price demands a certain amount of service and quality. A low price can signal that the client won’t get enough for their investment or that you’re ill-equipped to assess and handle the work requested. It’s a delicate balance, but the way you price yourself determines so much about your business, including how profitable it is, and guides the contents of your standard operating procedures. It isn’t enough to have a good idea for a business; you must price it accurately. With so many factors, pricing is a mix of art and science.
Pricing your accounting services can help you complete the following goals for your business:
- You can more easily scale your business with automations in billing, financial reporting and forecasting, and building your team.
- You’ll know whether or not adding a new client to your roster is feasible at any given time.
- You can attract and retain top talent with steady client work and established processes and workflows.
Fixed vs. Value Pricing: Which Model Makes Sense for Your Business?
This is where the rubber meets the road.
Determining if you should price your accounting services with fixed-fee or value-based pricing is the ultimate crossroad in your journey to becoming an accounting firm owner. And the only one that can truly know which one works best for you is, in fact, you.
With fixed pricing, you’ll determine what price corresponds to your services for any client type or size that asks — and only do that once. This means creating one accounting firm price list and applying it to an onboarding and selling process that can be easily automated. This model allows you to more rapidly respond to prospective client inquiries, since you’ll insert your fee schedule into any sales deck or proposal and let your automated processes and team fly.
TL; DR: Taking away the variation in pricing allows you to automate your business processes more easily and with less time invested.
The value-based pricing model allows you to price each client based on the value you bring to their company. Although this is the definition of variable, this format can improve your profit margins on services to specific clients.
For example, a blue chip prospective client fills out your lead form. You learn that they are firing their big firm in favor of better service or more depth in service offerings. With value-based pricing, you can customize a retainer agreement to accommodate both the scope and depth of your anticipated work.
TL; DR:Adding variety to your pricing means there are more moving parts with each sales pitch, but can be more profitable.
How to Price Accounting Services with Value to Your Clients in 5 Steps
Finding the right price for a service doesn’t necessarily mean it’s the cheapest. Instead, you want to make sure what you’re spending your hard-earned money on is worth the investment also. Follow these steps to price accounting services for your firm that provides both you and your clients value:
Step 1: Have a conversation with your prospective client.
This conversation can be in-person or over the phone, email, or video conference. Asking the right questions in this conversation can help you determine if this client is a good fit for your expertise and how you’ve created your business. When both of you walk away from the conversation, you should both have a good idea of whether or not your services are what they need and are willing to pay for.
Use these questions and build them into your initial consultation call or form on your website:
- What have you learned about accounting services or what services you need in your search so far?
This question gives you an understanding of where they are in the decision-making process and how familiar they are with hiring or working with an accountant or bookkeeper. Having this context can help you determine the value you’re bringing to their business (if value-based pricing) or if your pricing aligns with their budget (fixed-fee pricing).
- How do you handle your accounting right now?
Get an idea of what they’re doing now and how much they like it. Any complaints can be used in your pitch to seal the deal. If you have a certain product or offering that matches with a complaint, you can lead with that in your proposal and support of pricing. Also, knowing if they do nothing or DIY can determine fit on your ideal client type and how you’re set up to assist them with implementing a formal accounting process.
- What are your business goals in the next month? Quarter? Year and beyond?
Understanding your client’s business goals helps you meet their needs, and dig into
areas where you can add value as a consultant and expert in your field. Tying business goals to your finances is what we’re explaining to you right now in this blog, so go ahead and do the same!
Step 2: Gather requirements and determine scope of work.
Once you have the initial conversation and answer the above questions, you can discuss technical onboarding requirements like software, communication preference, and anticipated meetings throughout the engagement. In your proposal, include the answers to your questions above and pair them with associated services or packages from your accounting firm price list.
Step 3: Present your proposal.
Creating a standard proposal template for accounting clients you’re pitching is a great way to organize your thoughts and key selling points. It’s also a chance to impress them with both the time you spent to prepare, as well as your organization. You can use the questions above to tell the story about what you can offer them and outline the slides in your presentation.
Step 4: Negotiate and come to an agreement.
Now, you have to talk money and time. Exchanging the two is how business was created and continues to work. If your client is talking price down, reinforce your pricing with the pain points they mentioned in your initial call. Or, if they’re expecting round-the-clock availability, make sure to mark that line in the sand if you can’t deliver on that, be it related to your business model or own personal preferences.
Step 5: Implement your new client.
Don’t put your feet up just yet. Once you’ve done the hard work in the selling and agreement phase, you still need to make it happen. This can mean integrating software, sharing passwords and banking information, gathering and documents, and more. And you also need to get the agreed upon statement of work from Step 2 into action with you and your team’s workflow and process.
Pricing Accounting Services Made Simple with an Accounting Practice Management Software
When it comes to pricing your accounting services, there is so much to consider from both a business model and growth perspective. Ensuring your firm is priced appropriately only sets you, your clients, and your staff up for success in the long run. Not only can you finally build the company you’ve always dreamed of, but you can also grow it beyond your ability to service clients.
Try Jetpack Workflow free for 14 days and get your business setup for success once and for all. Manage your accounting practice with seamless workflows for clients of all sizes and get a headstart on scaling your firm.