The 3 Big Pricing Mistakes Accountants are Making in 2021

Accountants struggle with pricing!

It’s not their fault… pricing is hard.

When I am helping members of the Value Pricing Academy there 3 things that keep coming up over and over again.  3 things we need to fix.

Let me share with you those 3 big mistakes in this blog post.  However, if you want the full analysis, check out this video on my YouTube channel.

Read on for the summary points or click here to watch the full video.

Mistake #1

You are still pricing too low!

2020 was a big shock to the economy with the emergence of COVID-19, lockdowns and travel restrictions.  Many of your clients have struggled.  Many business owners have had to shut their doors.

And things are still tough in 2021.  Arguably tougher, as businesses have to pay back the loans and tax deferrals.

When clients are struggling there is a natural tendency to want to help by keeping prices low.  The trouble is that’s not really helping.  You have to look after your own business first.  After all… if you have to close your doors (because you’ve been pricing too low) you can no longer help and support businesses.

Whilst this may sound harsh, not every business is a great business.  It’s in these tough times that these businesses get found out.  Not every business is capable of saving. 

Having said that…

Mistake #2

Many of your clients just need a little support to get through these tough times.

That could be accessing government support and other funding.  It could be advice from you on how to pivot, adapt their business and change their strategy.  These clients NEED you… more than ever before. 

You have an opportunity to add more value than ever.

When you do that, you must charge based on value.  Moving to value pricing is more important than ever.  Value pricing is a fairer way of pricing.  It aligns your goals with those of the client.

When you add more value to your clients that’s the right thing to do.  Focus on value. And when you do, price based on that value.  It’s a win – win.

Mistake #3

The pandemic has been a catalyst for change.  A change that’s been coming for many years.  For the last 12 months, we’ve been adapting our firms to a world where working from home is now the norm.

We are increasingly using technology to help us communicate and work more efficiently in this online world.  For example, client meetings are now held online without travel.  It’s saving time and making us more efficient.

Unfortunately, most accountants and bookkeepers are pricing based on the hour.  As we become more efficient through our investment in training and technology, we are simply passing the benefit onto the client.

Stop using hourly rates.  Focus on the outcome.   Price based on the outcome.  And then innovate and use technology to create a better service experience for your client whilst also reducing your costs and increasing margins.

Here is a quick summary:

• Stop being cheap just because times are tough. Put your prices up!
• Focus on adding more value than ever before to those clients that need it… and price accordingly.
• Stop using hourly rates and passing on efficiency gains to clients. Clients should pay for value, not based on time.

If you found this valuable and would like to learn more about value pricing, I run a free live online training session every month with a topic chosen by you. Attend live and you can ask me any questions you have. Click here to register and I will send you an invitation to the next session.

Wishing you every success on your pricing journey

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”