Principal Prolifica Co.
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7 Ways to Quantify How You Help Clients

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Hourly pricing has long been the standard for accounting services. But it's not necessarily the best pricing model. There’s a language of value that clients understand and your firm needs to speak it. Otherwise, the value of your services gets lost in translation.

Feb 23rd 2021
Principal Prolifica Co.
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To help your clients understand the true value of your firm, you have to quantify--and price--services differently. Begin by using value-based or fixed-rate pricing.  As pricing expert Ron Baker points out, “There is not a customer alive that buys the professional’s time. Nobody goes to the doctor to buy an hour. We can’t buy time from one another, yet we are essentially selling time with a ‘billable hour’ model.”

Value-based pricing requires a client-first approach. Clients do not care how much a service costs your firm in overhead or labor. They care about what that service can do for them. What difference will it make in their life, their business, their profitability, their peace of mind?

A recent report from the Hinge Research Institute shows that clients are willing to pay more for services that deal with their most significant accounting problems and issues. The key question is “What’s the value for the client?” not “What’s the cost for the firm?”

Try these approaches to communicate and quantify what you do in a way that matters to clients.

1. Dollars Saved

Here’s a key question to ask when setting value-based pricing, according to Baker: “What is the client’s cost of not solving this problem in dollars?” Helping clients understand money saved makes it easy for them to see the value of a service.

You won’t have the exact numbers for each client; use questions and realistic scenarios to properly explain a firm's bookkeeping services to professional tax prep that can save client dollars.

Questions to ask clients:

  • How is your business affected by cash flow issues?
  • How would accurate budget forecasting save you money?
  • Have you ever lost money due to poor bookkeeping?

2. Risks Reduced

Lack of knowledge can make all the difference. Your firm’s knowledge keeps your clients from error-filled financial statements, which reduces the risk of costly mistakes on reports and forecasting. “For tax returns,” says Michael Carney, CPA and President, MWC Accounting, “it’s compliance with laws to produce the most accurate tax return for our clients.”

Numbers to use with clients:

  • Percentage or amount of taxes saved for clients, on average
  • Value of fees and penalties clients can avoid with accurate tax prep
  • Cost of higher interest rates and lost investment opportunities due to poor forecasting

3. Problems Solved

There are two ways to quantify problems solved. In the first, more objective approach, you list the potential problems clients will face, alone, without professional services for payroll processing or cash flow analysis. The problems may be easily solvable for a professional. But they are neither small nor simple for a busy client with little financial expertise and many other things to do. Give examples and an estimation of the problems prevented and/or solved by each key service.

When your services satisfy a client’s emotional needs, they become more valuable, says Liz Farr, CPA. You’re not going to become a financial therapist, you are going to show that your services reduce anxiety by providing convenient and reliable access to a trusted financial professional. Use the questions below to put a number on anxiety reduction. Price accordingly.

Questions to ask clients:

  • How many times a month do you have a financial question?
  • What are your main frustrations in financial planning?
  • What’s always on your financial to-do list that you never get finished?

4. Tasks Handled

Listing either the tasks or transactions included in each service measures the value for your clients and clearly defines the scope of the service. Defining scope is key with value-based pricing. Clients need to know what they’re buying, and firms need service boundaries to avoid leaking profits. “If you aren’t in a position to define your scope clearly,” says firm consultant and CPA Ryan Lazanis, “then you likely don’t understand the situation well enough to be able to price it.”

Numbers to use with clients:

  • Total transactions (per month or quarter) included in bookkeeping services
  • Tasks eliminated by payroll processing service and automation
  • Reports and analysis generated by outsourced CFO services

5. Hours Saved

Hours saved are based on the amount of time a client would spend doing the work. The value you provide isn’t how long it takes your team to complete a tax return or prepare a financial statement, but on how long it would take your client.

Start asking questions and clients will sell themselves on the value of your services. They know the pain of staying up late to balance the books, fill out the form, or sort through complex tax regulations in search of a clear answer.

Questions to ask clients:

  • How many hours does it take you to process payroll?
  • How long does it take you to ensure that your tax forms are accurate?
  • How many hours per week do you spend on your company’s financial records?

6. Expertise Provided

In quantifying expertise, look at the accumulated knowledge and skills available from your firm and your network. What certifications and specialties are held by your team? And what resources can you access that are not readily available to folks outside the financial profession?

 There’s a growing demand for specialization from financial service providers; specific and deep expertise is valuable for your clients. According to Ty Hendrickson, CPA and founder of The Sales Seed, “If you are pitching to a prospect where you know that you are the industry leader in that particular area and have more in-depth knowledge that can provide them better service, this should be highlighted in your pitch.”

Numbers to use with clients:

  • Salaries saved by using outsourced CPA, CFO, or strategic advisory services
  • Clients served within your firm’s focus industry or specialty
  • Combined years of experience accumulated by all members of your firm

7. Goals Reached

Your clients have financial goals, and your services are key to achieving them. Quantifying value is wrapped up in “the achievement of the financial goals set out at the start of the engagement for our financial work,” says Carney.

You can use past client experiences, and pull out the numbers to demonstrate value. Did you help a client reach a savings goal? Did your analysis reduce overhead so a client was able to grow their business? Past cases are powerful evidence, but so are the goals held by current and prospective clients: ask questions, clarify, and quantify.

Questions to ask clients:

  • What would you like to change in how you’re saving for the future?
  • What area of your finances creates the most problems?
  • What increase in annual revenue would be ideal for your business?

As you define and focus on the value provided by each service, you offer more effectiveness and benefit for each client, as well as more efficiency and profitability for your firm.

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