I know lots of accountants who simply aren’t charging for all of the work that they’re doing.
Are you one of them?
It’s why one of the first things I get members of my mastermind & coaching programme to complete is called ‘The Pricing Maximiser’.
It’s a spreadsheet with every service you can offer along with lowest, average and highest fees that other members of the programme are charging (the highest usually being practices based in the London area).
And when people complete this tool, two things happen:
- They can easily identify the services that they are undercharging for
- They can easily identify the services that they aren’t charging for at all
It’s so easy to end up doing extra things here and there that you don’t end up charging for.
For example, a client might come in asking for a mortgage reference letter and you find yourself inclined to say you’ll just do it for free.
After all, they’re a great client, they pay on time and it won’t take long, right?
But what you need to realise is that all those little things you do for clients for free add up over time.
These little time vampires soon mount up and start to slowly suck away at your time AND your profitability.
You wouldn’t expect to go to a restaurant and get extra food for free just because you’re a regular and you get on well with the owner, so why should clients expect accountants to provide them with extra services for free?
You need to charge your clients for everything you do for them. No matter how seemingly small or insignificant
It all starts by setting clear expectations from the outset.
Be clear in engagement letters upfront that any additional work will be quoted for and won’t start until payment has been made or payment terms have been agreed.
You need to set the rules of play with clients and make sure that you stick to them yourself.
So how do you get your team to stick to them as well?
I’m always hearing from practice owners that their team members are some of the biggest culprits when it comes to giving little bits of work away for free when clients phone up and ask nicely.
One way to get team members following this way of working is to set them additional work order KPIs.
This would ensure you can track they are actually charging for these small tasks and not just doing things for free because clients have called up and asked them to do it.
It also means that your team have to start asking your clients the right questions when they speak to them.
Asking them what else is going on in their world and if there’s anything else that you can help them with.
Another way to make this easier can be creating a ‘menu’ or pricing list that has a breakdown of all your prices…for absolutely everything, including all those small tasks you might otherwise complete for free.
This means your team members can just refer to the pricing list and bill the clients accordingly for each task.
This pricing list could simply be in excel, but I find software like GoProposal and Practice Ignition work perfectly for this type of item as they help with the additional admin work (letters of engagement etc) that come with it.
You could also choose to have this pricing list available publicly on your website. Whether or not you do this is entirely up to you and what you feel works best for your practice. I know some experts who recommend having this available publicly and some who don’t.
I suggest you think about what will work best for you and do that, as both ways of working have their merits.
So, are you charging for everything you should be charging your clients for? How much time and profitability are you simply giving away for free?