What should I charge? 6 ways to make sure your price is right

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Over the last ten years or so I’ve seen the role of accountants change. You are no longer only there to make sure your client has hit all their deadlines. More is needed from you!

You are needed as an advisor. Clients fear making a mistake and you are there to support them. As a result, your charges should reflect that.

The problem

If you are going to serve your clients well you need to have time for them. To free up time you need to set your prices at a high enough level. Frequently, accountants are run ragged as they are working long hours and not pricing high enough.

When I first started working for myself 18 years ago, I had no idea how to run a business. When I rang up my Association and asked them what prices I should charge they said, “It’s up to you”. Not very useful! I’m glad to say they’ve improved over the years!

Remember clients are buying:

  • peace of mind
  • tax savings
  • solutions to their financial problems

You are helping them to resolve any issues and deserve to charge them a reasonable price for your time and expertise.

Solutions

So how do you know what to charge for your services? How can you be sure that your client will think you are value for money? How do you ensure that you are paid for the work you do?

Here are some steps you can take to ensure you have set your charges at the right level and that both you and your client are getting the best deal.

  1. Give the client a fixed fee which is payable monthly

Therefore, you’ll both know where you are with your cashflow. By pricing consistently and openly you’ll both have certainty. In order to move from billing at the end of a piece of work to billing in advance, plan ahead.

Finish off their last piece of work, say to 30/6/22, and invoice for that. Then invoice them for the year 30/6/23 and ask them to start paying monthly from 1/7/22.

I know that a lot more accountants are doing this now but there are still some who wait until the work is finished to invoice.

  1. Offer different packages

Make sure each package clearly outlines what is covered. If you are asked to do something not included in the package then charge for it. In future, the client may upgrade to a package which includes the extra work.

  1. Differentiate yourself as an accountant

You are not interested in being the cheapest accountant on the block. It never works as a client who is shopping on price will never value you and the service you offer!

In order for them to value you, the service you offer needs to focus on them and what they want. Once you know this you can review their strengths and weaknesses and help them to improve their business.

  1. Concentrate on the outcome for the client

When you quote for a piece of work concentrate on the outcome your client is going to receive. They don’t care how you do it, only that it is done! This will demonstrate that you are value for money as they will see the benefit.

  1. Be clear from the outset what your client wants

If not, then you can end up doing more than was planned and the client won’t be charged.  This is called scope creep.

How to avoid scope creep:

  • Prepare in advance and ask detailed questions when you first engage the client
  • Have regular check-ins with the client; their business may have changed and they may need extra support as time progresses
  • Keep your billing system up to date to ensure the job remains profitable
  • Build up some slack into your plan just in case things change.

  1. Check that your client process is efficient

Ask yourself:

  • What do I want to achieve?
  • How am I going to do it now? What issues/steps can I remove from the current process?
  • How can I involve my team in the process?
  • Educate the client

I frequently find, nowadays, that clients think, ‘I have an accountant and a software package so I don’t need to do anything.’ They need to know what information you need, how to get it to you and how frequently.

Remember it’s important to price in a way you feel comfortable. For some accountants, this will be by finding out what work the client needs them to do and then calculating the price or offering them a specific package. It may be that a pricing software package can do the work for you. The good thing about using a package is that the client can see the information that you have entered and are more likely to accept the final price. Also, there is an element of finding it easier because you can say, ‘Its not my fault the price is high, it’s the package!’

Further resources

Mark Wickersham – Effective pricing for accountants and Founder of Effective Pricing Software.

James Ashford – Selling to Serve and Founder of Go Proposal

Accountex – 11-12 May 2022 Excel, London. This is a free event which will help you to find solutions to your business issues; there are over 180 CPD sessions available.

The role of an accountant is changing and you need to make sure that your prices reflect the amount of time and expertise your client is getting from you. Does what you charge reflect the outcome for the client? The only way to know is to build in regular reviews of your pricing to your business planning. Know your worth!