Conquering the Beast: Charging the Right Fees

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Almost every CPA I mentor tangles themselves in a web of confusion and wrestles with the same beast. The confusing nail biting beast that I am referring to is pricing.

It really pains me to see fellow practitioners struggle with pricing and not setting, or getting, the fees that they deserve. And realistically, when approached properly, setting your fees can be one of the easiest things you’ll ever do in your practice.

One of the biggest problems we face as a profession is that practices have taken their capital and commoditized it into a one-dimensional billing rate, but this is a SERIOUS mistake.

As CPAs, we have three basic ways to price our services: hourly, fixed fees or value-based hybrid pricing.

Hourly billing sets the tone that your services aren’t much different from any other CPA or bookkeeping firm. This hourly billing gives no incentive to be more efficient than your competition or get your work done faster, so you’re actually losing revenue.

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About Salim Omar

salim omar

Salim Omar is the author of The Million Dollar CPA Firm. He is also a successful business owner of Straight Talk CPAs, an accounting firm, and President of CPA Marketing Genius. He has a passion for helping CPAs engage in personal growth and professional development. While he is not working he enjoys trying an eclectic fare from an Indian restaurant or catching up on some reading on the Florida coast. 

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Nov 10th 2017 17:29

I think one thing all accounting/bookkeeping/tax professionals should be prepared to do is to not accept an account if it's not a good fit value-wise.

What I'm alluding to is if a professional legitimately values their time at say, $250.00 per hour, but the client doesn't need that level of expertise, it's only professional and ethical to make a disclaimer to the potential client.

For example, something along the lines of: "While I would certainly appreciate you as a client, I don't think you're in need of my level of service. However, if you're comfortable with my fee of $[***].XX, I'd be happy to take on your job."

To further illustrate: Many years ago I came across an individual that had a two or three rental homes - not a complicated situation. So I asked him how much he paid for his annual tax return and he told me $800 (this was many, many years ago, when a more appropriate amount would have been in the $200 range). I told him I felt that amount was high, but he countered that his CPA was a "real estate expert", which I'm sure he was. But the point is, the potential client didn't need a real estate expert; he wasn't buying/selling properties, 1031 exchanges, etc. He had simple rental schedules.

Anyway, I think y'all get my point: Our goal, as is mentioned in the article, should be to provide VALUE to the client for which are fees should reflect that value.

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