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Accounting Advisory

Cashflow advisory guide: How can I price my services?

Pricing is a balancing act. You don’t want to price too high and put clients off, but at the same time you want to ensure your team is properly compensated for its work. After all, your practice is a business too – that needs to be profitable and can’t afford to undercharge or overservice. 

Like getting clients interested, pricing is closely tied up with how you communicate value. You can lay the groundwork with value-based conversations early on, but by the time you get to pricing, the same messages need to land even more clearly. 

There’s nothing worse than seeing clients complain about your prices, only to go elsewhere and up paying more. With the final article in this series, we want to help you put the systems and behaviours in place to be confident in the way you price. Here’s five tried-and-tested approaches to consider: 

1. Communicate value in a compelling way 

Cashflow issues can prevent business owners from doing the things they care about. Maybe it’s paying their kids’ school fees, putting money aside to renovate a kitchen or saving for a family holiday. Either way, your support can help clients make their personal goals a reality, which is an enormously compelling pitch. 

James Ashford, who runs GoProposal, which helps accountants price effectively, stresses the importance of speaking to your clients as people, first and foremost. This means going beyond purely business objectives to uncover your clients’ personal goals – and linking your solution directly to those goals. 

If you’re moving away from hourly billing to value-based pricing, it’s absolutely vital that your team frames your services in a way that really means something to your clients. In this context, you focus on the benefits of your service, rather than it sounding like just another business cost. 

How you can take action: 

Shifting into ‘discovery mode’ doesn’t always come easily to accounting professionals, especially for more junior staff. So build confidence among your team by training them to think like entrepreneurs and empathise with the realities of running a business. 

2. See if bundling works for your practice  

Value-based pricing goes hand-in-hand with bundling. A common approach here is bundling together tools and services that complement each other, like Fluidly for forecasting alongside Xero for live reporting, as part of a wider package. 

Separating value-based pricing bundles into tiers is even more powerful. Tiered pricing simply makes clients’ lives easier, by sparing them a long list of options. And if a business is just starting out, they’ll immediately know which option is right for them. Ultimately, it shows that higher-priced packages involve higher value work. 

Take Raedan, a forward-thinking firm that works with creative businesses, which tiers its three pricing packages in a crystal clear way. The packages showcase three very different types of offering, showing what clients miss out on if they simply opt for the ‘essentials’. 

How you can take action: 

If you’re going for tiered pricing, invest the time in a clearly-signposted pricing page that shows the different options available to your clients. 

3. Remember pricing isn’t an exact science 

The truth about pricing is that it will never be perfect. But that’s no bad thing – it gives you room to adjust in-line with changes to your clients’ businesses, your own practice and events outside of your control, like the current pandemic. 

That’s why every practice approaches pricing in a different way. Take TaxAssist, one of the UK’s largest networks of accountants, which doesn’t follow a tiered pricing model, instead going for pricing tailored to each individual’s needs

The only way you can figure out a sensible price point for your business is by getting something out there, which you can fine-tune. Of course, constantly changing pricing can create complexity further down the line, but there’s nothing wrong with trying pricing out and it not working. The real mistake is inaction.

How you can take action: 

Don’t be afraid to ask clients what they think. Next time you speak to a long-standing client, ask them their honest opinion of your pricing and the value they’re getting, so you can calibrate from there. 

4. Be open, straightforward and honest 

Clients will generally know what you mean when you talk about things like payroll, VAT returns and tax planning. But ‘advisory’ can feel more vague, and means different things to different people. So be clear with your clients about how you define the advisory element of your services. 

Take MAP, a firm based in Manchester, which describes its advisory offering as a ‘Co-Driving’ function. Rather than sitting in the ‘driving seat’ on the client’s behalf, MAP’s approach is more about assisting with decisions and facilitating business success. 

Use this same level of clarity in the way you communicate what is and isn’t included, along with your expectations from the client, so you don’t fall victim to scope creep or overservicing. What’s more, if you’re doing more for your clients in the current circumstances, you should be able to justify a higher fee.   

How you can take action: 

Accounting services should be a two-way relationship, especially if you’ve set expectations clearly from the start. If an existing client isn’t delivering on their side of the bargain or your service levels have changed, make sure you have the appropriate conversations.

5. Get your own house in order first 

Consistency is key when it comes pricing, whether it’s the numbers on your website or the figures your team quotes to customers. Tools like GoProposal and Practice Ignition can help here, by ensuring everyone is singing from the hymn sheet. 

It may seem obvious, but make sure your firm has a sustainable cashflow runway too. Your practice may well have underlying cashflow problems of its own, especially if it has recently lost clients. With less money coming in from fees coming in each month, you may have to tweak existing pricing to remain profitable. 

So make sure you practice what you preach, by forecasting overheads, income and investments relating to advisory and feeding that back into your pricing model.

How you can take action: 

See how your practice can automate the admin, whether it’s through practice management software or forecasting. If you haven’t already, consider investing in a proposal and pricing tool to drive consistency across the board too. 

 
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