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Pricing Strategies for Accounting Firms

Implementing an effective pricing strategy for your accounting firm can help you provide the best service to your clients whilst enhancing your own business. We’ll focus on shifting to value added pricing strategies which allow you to provide a customised accounting service for each client. 

In this article, we will look at:

What are pricing strategies for accounting firms?

Pricing strategies for accounting firms are the fees and price lists that an accountant charges a client. However, the way that you implement pricing can say a great deal to your client about your accounting firm.

Here are the main pricing strategies to adopt in your accounting firm:

  • Hourly billing: Calculated after the service is completed, the total number of hours is multiplied by the hourly rate. This traditional pricing method requires tracking time.

  • Fixed pricing: A set price is established for a service, regardless of the client. The price is calculated before the service is provided

  • Value billing: You will establish value and create a bill for the client to pay after the service has been completed. This is still totalled by multiplying the number of hours by an hourly rate and markup.

  • Value pricing: A unique process is used to create a price based on creating value for the client by their wishes. The price is negotiated and agreed on in advance, in line with the client’s perception of what value is. 
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What pricing strategy should accountants use?

Traditional Hourly Pricing

A traditional pricing strategy used by many accounting firms is centred on an hourly billing system, charging a client the exact number of hours it took you to complete their accounts. However, this pricing method is considered outdated and does not offer the best price for your accounting service, nor the best productivity for the client.

This method of pricing is cost-plus pricing where you would total your costs and add on a profit margin. However, hourly flat-rate accounting services do not work in the best interests of the client and have the potential to create a false perception of your skill set, work ethic and reputation. 

For example, if you are charging a low hourly rate that excludes key services such as forecasting, payroll or preparing financial statements, this may suggest to the client that you are unskilled, unqualified and won’t provide a good service. However, a high hourly rate may be out of the financial reach of many clients who may not view the service as value for money.

Value-Added Pricing

The most effective pricing strategy for accountants focuses on creating more value for clients. Pricing your accounting services by implementing an accountant and CPA price list that adds value to your services will speak volumes to your clients and help draw business to your firm. 

Creating value for clients looks at each client differently and tailors the service and the price individually. You will need to enquire and assess what value means to each client and negotiate a price that suits both yourself and the client.

How much should I charge for accounting services?

Use our accounting service calculators to work out how much you should charge for your services. Enter your details into our accounting pricing calculators to estimate your service cost and pricing structure, giving you an idea of how to charge clients for your services.

Hourly Rate Pricing Calculator for Accountants

Calculating your accounting service hourly rate is simple. Enter the number of hours worked, then enter your hourly rate. Click Calculate to determine your hourly rate pricing.

Hourly Rate Pricing Calculator

Total Earnings: $0

Value-Added Pricing Calculator for Accountants

QuickBooks value-added pricing calculator for accounting services helps you determine the final price of your value-added services. Enter the number of hours worked, then enter your hourly rate to determine the price of your hourly pricing. Now enter your profit margin and click calculate to determine your total service price.

Value Added Pricing Calculator

Total Price: $0

How to price accounting services in your firm

Before setting your pricing list, here are the top 5 factors accountants should take into consideration when pricing their accounting services:

1. Creating Value

Your main focus when working out an accounting price list is how to create value for clients. Value pricing for accountants centres on the client and what they want and need to boost value. The price you charge the client is based on the value you can give to the client. You and the client are working towards one aim of creating value for the client.

Adding value will help build trust and improve your client relationship. Every client is different and holds a varied perception of what creates value for their own business. Therefore, ask the client how you could best add value to their business and together determine the services you can offer to provide value and the services you provide. 

You can offer clients tailored advice on the best apps for QuickBooks or build a training program to help educate clients on using QuickBooks Online to add more value to their retainer. These value-added services will help to improve your clients' financial literacy and help them view you as an important part of their business.

Clients love value, more so than a low price. So, never be frightened to charge the client the fee that you think suits the service they need. You can charge a much higher fee to a client if they know they are getting value added to their business. 

Watch this video for further information on value pricing.

2. Negotiating Price

When considering valuing pricing in your CPA pricing structure, you need to assess the meaning of value to a client. Use an accounting quotation template and make notes to draft the service the client wants from you. 

Never be too intimidated to suggest a price for the service the client wants. If the client is not happy with the price, you can negotiate and amend the service offered for a lower price. 

An accounting service’s pricing structure and bookkeeping service rates are a way of valuing an accounting practice. Never undervalue your skills and expertise when drafting your bookkeeping quote template.

3. Menu Pricing

When considering how to charge for accounting services, a menu pricing technique is a popular upselling method to use. Clients can pick the level of service they want for the price charged. 

For example, you may use Bronze, Silver, and Gold packages, each with a different level of service for the client. Each package will have a different price attached, with customisable extras available also.

The benefit of using a menu pricing technique is that the customer will feel as though they are in control as they can choose their own package. However, you have created the packages and priced each package to provide your business with a good profit.

4. Niching

A key strategy to use when considering how to price bookkeeping services is finding a niche or a specialism. What makes your accounting services better than other accounting services? Why should the client choose you?

Embracing specialisation is a key technique to grow your accounting service offering, finding a niche that other accounting services do not offer.

Watch the following video to find out further information on effective selling strategies.

5. Subscription Pricing

Recurring revenue models, such as subscriptions, can provide a guaranteed income for your accounting firm. Clients subscribe to your services on a weekly, monthly or 12-month basis, typically signing long-term agreements in the process.

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Grow your accounting business with QuickBooks Online Accountant

QuickBooks Online Accountant has a wide range of features for accountants that allow you to increase the value of services you offer to your clients. Sign up for QuickBooks Online Accountant for free today and start managing your practice and clients all in one place.

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