I recently filmed a video where I shared the 9 biggest pricing mistakes made in the accounting profession. Click here to watch the full video.
As a profession we are way too cheap.
It’s why we are working crazy long hours and not making the money that we deserve.
So we have to rectify that by putting up our prices.
Copying the Competition
Most accountants and bookkeepers are too cheap.
When we try to win new business, we tend to look at what our competitors are charging and use that as a basis. But if they are too cheap, it makes no sense to copy them.
There is a reason the client is talking to you. There is something about their current accountant or bookkeeper they are not happy with.
So if they want better services and better quality, they should be prepared to pay more than they currently are.
Prices on a Website
People put their prices on their website because they want to win more business. But if you put high prices on your website no one will ever contact you, it’s the low prices that draw them in.
But this just attracts the wrong type of client. The price buyer, the people that buy based only on the price.
If you want to have higher prices that are based on value, then you need to have a conversation with your client to find the perfect price for you both.
Pricing based on the hour
We have to stop time based billing.
It’s not fair on the customer. They hate not knowing the price upfront.
With pricing based on the hour, the customer won’t find out the price until the work is finished and a bill is presented.
It’s always a surprise. Some people call it ambush billing. Stop it!
Quoting Hourly Rates
If you ever give someone your hourly rate they will likely say “That’s expensive”.
The reason for that is there is no value in hourly rates. Nobody wants to buy an hour of your time.
Price psychology tells us that when you reveal that number, the client will make a subconscious comparison to see if it seems to be a good price, bad price, or about right.
They will often come to the conclusion that your price is too expensive.
Charging everyone the same price - Not giving options
It’s a fact of lie that everyone values things differently. No two people places the same value on something.
It’s what makes value pricing so difficult.
We have to figure out a way of charging different customers different prices.
Not giving a definitive price agreed in writing
Customers hate surprises.
They want to know upfront what the price will be so that they can plan and budget.
We can’t be vague.
I used to give a price range, saying “It’ll be between 200 and 300”. The client may be happy with the 200 but when the bill comes in at 300 there is likely to be a fee dispute.
So make sure you give a clear, definitive price in writing so there is no dispute later.
Avoiding Payment Terms
Payment terms are part of the pricing equation.
Price and payment terms are integrally linked together.
We must make sure that when we are communicating a definitive price, we are also very clear on exactly what the payment terms are.
There must be no uncertainty.
Not Explaining the Benefit to the Client
We are not very good at communicating the benefits of what we do.
It’s why we find so often when we present a price the clients says it’s expensive.
It’s because they don’t understand the value of the work you do. So the only thing they judge on is the price.
We have to become better at explain what we do, why we do it, the pain that we’re taking away and the benefit to the customer.
If you want to learn more about value pricing you can sign up for my free monthly mentoring sessions where I give free advice and techniques on how to improve your profit. Sign up here.
And if you want to join my Facebook Group “Value Pricing for Mark Wickersham” click here and join a community of like-minded accounting professionals learning how to price better.
Wishing you every success on your pricing journey.
Chartered Accountant, public speaker and #1 amazon bestseller of “Effective Pricing for Accountants”
Your Pricing Journey gives you access to my pricing training delivered every month in easy to digest, and easy to implement, steps.
So if you sometimes find yourself working too hard, for too little money, this programme will solve that problem.