Accurately pricing clean-up projects is something many accountants have experienced, yet few have done well.
Here’s a typical scenario: You’re approached by a potential client who has a messy account with numerous transactions that needs to be cleaned up so they can fulfill their professional and legal obligations. You review the project, agree to take it on, name a price, and quickly find out the issue has far more layers than you originally thought and will take even more work to clean up. But, you already charged them. What do you do?
A session entitled “Value Pricing for Experts,” which was led by Mark Wickersham, Ron Baker, Kirk Bowman, and Paul Shrimpling at the 2018 QuickBooks Connect conference, attempted to offer some guidance on the issue.
During the small, round-table discussion, Wickersham spoke with attending accountants and bookkeepers who feel they are still struggling to accurately price their services in a time when charging by the hour has gone out the window. Participants voiced additional challenges, such as not getting all the information from a client and feeling pressured to give customers an up-front total to help them decide whether or not they wanted to move forward with the hiring process.
Wickersham’s recommendation? Break everything down into stages or milestones.
So, after the client tells you about the issue, set some time aside for a discovery session and charge for it. Then, come up with a proposal for the steps you would need to take to solve the problem and the different solutions that might be feasible.
When you bring these back to the client, there are several other measures Wickersham suggests taking to ensure you’re compensated appropriately for your time. First, he recommends letting the customer name the value: In other words, after you’ve explained the potential consequences of not fixing the problem, listen carefully to their reaction. The more upset they are, the more you can charge.
Second, offer different pricing packages so you don’t miss out on clients who may not have as many resources as bigger clients. For the first tier – the lowest priced one -- you’ll essentially explain to the client how they can solve the problem on their own while taking care of a few tasks. For the middle tier, you’ll do the work yourself and for the third, most expensive one, you’ll do the work and advise the client on how to avoid getting themselves into a mess in the future.
As an added bonus, Wickersham notes this is the perfect way to pre-qualify your clients. “We think we have to win everybody and we don’t,” he says. By incorporating a value-pricing model into your business structure, you’ll ensure you only spend time on the customers who are serious about hiring you.