Last month, I took a look back at some of the pieces I’ve written for AccountingWEB over the years, and how they hold up today. This month, I’m looking at more recent years, and some of the issues that still face the profession today.
“Whenever I speak to accountants about creating a cloud practice, the most common question is, “How do I charge my clients?” Ten years ago, maybe even five years ago, if I would’ve posed this question to a new accountant, I would have received a resounding response of: "Hourly billing. Hourly billing has been the traditional way that accounting professionals charge their clients, but much like accounting operations as a whole, this model is changing (and in my opinion, for the better).”
In this piece, I illustrated a value-based pricing model and how it could benefit accounting practices. Today, I still talk regularly about how technology enables accounting professionals to complete their work more efficiently, while remaining fairly compensated commensurate with the value of the work.
Just because you become more efficient, doesn’t mean you should be earning less. There is a difference between what an accountant wants and what the client wants.
Often, we measure our work performance by the length of time spent, but really the client wants the answer faster and they’ll pay more for it. By taking full advantage of technology and its ability to minimize lower-value time consuming work like data entry you can get your practice to a point where you can change your overhead costs and make more profit.
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Understand the mindset of the customer, they appreciate the quality of the work, not the hours logged.
“The two biggest hurdles you'll face in convincing either type of client to switch to cloud accounting are pricing and security. A shoebox client may have to make an extra investment in a cloud solution, but the time savings and the seamless bookkeeping process is worthwhile. And desktop clients may believe purchasing a license is cheaper than a cloud solution, but they aren’t factoring in the maintenance costs of desktop software, hardware and all the surrounding software licensing needed. It’s up to you to educate them on the money and time savings associated with cloud accounting.”
Today, price point is still an important consideration for clients, particularly small business owners. Earlier, I recommended switching to value pricing, which provides an amount small business owners can budget for; helping assuage any concerns they may have around technology pricing.
Although cloud security is always a concern, people are more familiar with it and there exist more documented ways to validate if technology is secure; making it no longer as much of a barrier. This sentiment has changed in the short space of just two years.
Millennial clients in particular expect to work in the cloud so they can see their numbers when they want them. It’s a more trusting environment because people are using cloud applications everyday: email, social media and more.
I would argue that any hurdles around security that accounting professionals faced in moving clients to cloud previously have been replaced by the learning curve of small business owners adapting to multiple applications. While desktop applications were a one-size-fits all package, with cloud accounting platforms, accountants and their clients are able to build a custom package or stack to suit. In some instances, they have the ability to choose from more than 500 different applications that integrate seamlessly with the core accounting platform.
An accountant and their client can create a best-of-breed suite of cloud accounting applications for their specific needs and vertical. The challenge is making sure your staff and your clients are comfortable using these applications most effectively. Putting in place a learning plan internally and externally is an important step in the learning process.
“Obtaining “for life” status is predicated on taking the time to explain the benefits of the cloud to your customers. Without it, you won’t have the information you want and they won’t have the guidance they need. If necessary, try the ultimate selling point: having a trusted business partner who can access data from the cloud directly correlates with better financial health for customers.”
The sentiment that, as accounting professionals, we want our clients to appreciate and value the work we provide them will always ring true. Like many, you want your clients to cherish the relationship they have with you and believe that the money they spend with you is worth every cent.
Later this year, I am releasing a book on the very topic of how to become the cherished advisor to your clients. By expanding your accounting services beyond the cloud, you can become the person that your clients can’t imagine running their business without.