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Automation Requires New Services and Pricing


Is the work you are doing and the work that you are charging for really what your clients want and need? You can begin to answer this question by taking a good, long evaluative look in the mirror and determining where your value lies. Is it in your ability to manually add up Excel cells and reconcile revenue, or is it in your hard won fluency in the language of business and financial planning? It’s the latter, right?

Nov 13th 2020
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As you consider what your clients need from you now, and in the future, you’ll probably find that compliance-driven work isn’t half as important to them as pointed advice and planning. In addition to finding replacement services to those outdated compliance-based ones, you will have to move past the outdated billable hour, too.

That’s okay since the billable hour doesn’t do justice to the value delivered by accountants anyway. And once you’ve undergone a software overhaul to automate away all that pesky grunt work so you can focus on your new advisory services, you’ll have to figure out how to bill for work that used to take hours and now takes seconds.

How-to Price Automated Services

When you begin automating the routine work you perform, like bank reconciliations and other bookkeeping functions, with bot-driven software, you must start thinking about pricing your services according to the value added. If you were to continue to bill for time in an automated firm, you’d either make almost no revenue, or you’d have way too many clients to serve and have a customer service problem.

Many firms get caught up in the fact that their costs when utilizing automation are significantly lower than before, which is why cost plus pricing no longer works as a blueprint. What does pricing look like then? Here are two schools of thought that are applicable:

1. Fixed pricing. You charge a set price for a specific scope of services. There is a similar set of variables that define pricing structure such as transactions or revenue.

2. Value pricing. You price before the service is performed based on the value the customer perceives receiving.

Up-front pricing is a necessary approach given the technological advances in the field. The advisory piece of accounting needs to be separate and distinct from the automated or data entry-based labor. When pricing engagements, you can have a core offering with a fixed rate and then a custom or ad-hoc offering for advisory service.

Without time and billing, alternative methods and practice management metrics have to be determined. But the really cool thing is that with the right tech stack, you’ll have all the data you need to determine new practice management methodologies. The data, because it’s automated, will be more accurate than an old-school timesheet. With the addition of automation and data, your firm can measure its employees on a variety of results-based metrics, and you’ll have the data to substantiate your findings.

Understanding What Advisory Accounting Really Means

Your job as a CPA is not to be a fortune teller, but provide subject matter expertise. What financial professionals can offer to their clients is a better understanding of the implications of financial documents and laws.

The best and most helpful thing you can do in this advisory atmosphere of accounting is to listen to your clients’ questions and concerns and answer them by providing blueprints of several different options—a few different paths their business could potentially travel down and the various outcomes, pointing out the benefits and risks involved in these options. This information gives them the autonomy and power of choice and provides insight into their level of risk adversity.

Your strength as a CPA is arming your clients with the right information to help them make the educated decisions that work best for them and their business vision. A big part of that is data and no one collates data better than software.

With your new found data, you can collate your findings into categories:

● What you know for sure

● What you don’t know

● What you wouldn’t do

These three categories can serve as the basis of an advisory approach. Advisory work can feel overwhelming for the rules-based CPA, but just remember you’re as well informed as anyone—especially when you have solid data at your fingertips.

These three categories can provide structure for information gathering, organizing and presenting to your clients. It’s not your job to tell your clients which move to make. You can simply and powerfully advise and provide relevant information.

Risk is your nemesis. Two categories of risk are risk of doing nothing or risk of taking action. No one wants to suffer loss, which means clients don’t want to suffer a loss of face, a loss of reputation or a financial loss as a result of making a bad decision.

The best way to combat risk and loss is to stay focused on the present and what you know for sure. If you focus on what you know, what your bot-derived data is telling you and how best to explain your findings to your clients, you’ll find yourself moving forward.

Put one foot in front of the other and in the process, you may just find that bot-based advisory next practices will emerge. Everyone knows what a best practice is, but it’s up to you and your firm to define and create next practices as you innovate.

You’ll Also Need New Marketing

Once you have automated and can continue to add clients without the struggle of adding teams to service them, it’s time to market!

Here are some basics to everyday marketing:

1. Go digital and pursue inbound marketing

If you’re not doing this already, your new priority is moving away from outbound activities and toward being found online. Business owners are looking for you.

Ensure you have a solid website, create meaningful content (important for search engine optimization and credibility with your audience), and make sure your site has clear call-to-action opportunities. Ask yourself, “After someone lands on my site what do I want her to do next?”

2. Use your resources wisely

Get scrappy with tactics like reaching out to your clients for guest blog posts or leveraging free templates for emails.

3. Tap into marketing resources

You’ll find a number of resources that are readily available online, some for free. Look for one-page templates, custom industry overviews and a full year of social media post ideas.

The time realized as a result of automating gives you an opportunity to get creative around growing your firm, and you can market and grow continuously. Marketing isn’t a chicken or egg problem. Grow your firm while software providers scale your backend data and accounting!

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