Hi my name is Steve Chase and I am just starting my bookkeeping practice. I'd like to hear from other bookkeepers on how you plan on billing your next client. Forget about the past, if I came to you today and was needing you to do my QBO bank reconciliations and show me my P&L each month how would propose your fees to me?
"Growing Your Business"... is the purpose of this discussion. Lets create a healthy debate on the merits of hourly billing vs value based billing.
Value pricing is the way to go. It was such a hot topic at QB Connect last year and I think I attended all of the sessions on it. I have been part of Mark Wickersham's group and read all of Ron Baker's books. Ron Baker is a wealth of knowlege on how to do this. He has written some fabulous books.
Basically, you give 3 levels of prices with 3 services. The first one being the cheapest and most basic. The second one should be what the client has reached out to you for. The third one is the bells and whistles one. I price it as all inclusive, meaning I pad it with the cost of Hubdoc, QBO and my time (unlimited questions/access) during business hours.
Hector and Michelle Long just did a webinar on this. I highly recommend following QB Power hour, especially for someone just starting their own business. I have been following Michelle for as long as she has been teaching QB to ProAdvisors and she is my personal favorite. I got to finally meet her in person at QB Connect (and she gave me a hug). She is wonderful teacher and compassionate human being. Love her!
Great question Steve!
I have recently discovered the art of value podcast with Kirk Bowman who is a thought leader on value based pricing. It is amazing!
Hector Garcia interviewed Kirk on this youtube link https://www.youtube.com/watch?v=Zs1NXPrxLDM
And they talked about Rabbi Daniel Lapin on Kirk's 100th podcast, http://artofvalue.com/foundation-wealth-wisdom/
Love to see what others think about this concept.
For me, I mostly bill hourly, but have value pricing available for more predictable work, such as monthly bookkeeping/accounting tasks. Most of my clients come to me with a lot of clean-up work required, amended returns to be filed, and needing additional compliance work to meet requirements for government contracts. Every client is very different in their needs and complexity, and I often handle a lot of ad hoc situations, making it more difficult to provide a value pricing format. I do try to offer value pricing when it makes sense to do so, but most of my work is still hourly simply because of the unpredictable nature and complexity of my work.
Thank you @lynda for the Ron Baker reference. He is great! I have searched him online and found several recorded webinars he did. They are fantastic. I'm looking forward to reading his books next.
https://quickbooks.intuit.com/accountants/resources/value-pricing/ This is a great link with his 4 part webinar series that are awesome.
It is super helpful to hear how others charge. I don't own a bookkeeping business, but I do own a virtual assistant business and my business partner and I are contemplating this same question as we grow and expand. When I first started, I charged an hourly rate, then added a monthly minimum. We are considering offering value pricing next. Thank you for the insight!
Congrats on starting your firm. I'm in the beginnings stages of starting my own practice. So, i know the pain. 3 podcasts that helped me iron out a lot of my questions and answer some that I didn't even know I needed to ask are below. I have an app that I can build playlists for the car and listen to at 2x speed.
Grow my accounting practice - These guys are goofy, but they always have useful information and solid guests.
The Successful Bookkeeper - Associated with the Pure bookkeeping system, a turnkey system for building a bookkeeping firm, I haven't bought in, but most likely will when I'm further along.
Growing your firm - Done by the Jetpack workflow people. They are a project management company designed for bookkeepers, I am not a customer but will be when it is time.
Best of luck, if you have any questions let me know. No reason to go at this alone.
Thanks Adam. Yes I am liking the Grow my accounting practice and The Successful Bookkeeper. They have been very helpful.
Thanks for the other resource of Growing your firm
This is great. As I grow I am trying to find the best way to bill my clients. An hourly rate seems so amatuer to me.
I wouldn't say Amateur, the biggest players in the industry operate on the billable hour model. But it is not in line with your clients best interests. So, out of date may be a bit more appropriate.
I see the same way we purchase tickets to a concert. We expect the performer to give us a valuable show. The performer does his best to deliver value in the best way he knows how to. If the performers were billing by the hour and you paid at the end of the concert you would probably not enjoy the encore as much if they took it real slow and kept adding minutes to their play list. The billable hour is 99 years old and when I take on a client that I will be working with month after month I think it makes sense to create a monthly price flat rate. If you want to learn more about this topic I would suggest Kirk Bowman's The Art of Value Podcast.
That's such a great way to look at it @SteveChase. My business partner and I plan to switch to value pricing very soon. I just checked out the podcast and stumbled upon this quote:
"If you bill by the hour, there's an artificial limit on your income." – Jonathan Stark
This may be the push I needed to change the process in which I bill. Thank you!!
Is Kirk Bowman the person who first taught you about value pricing?
From a "client" view on this, I do not at all like hourly pricing. Makes me feel limited to what I need my accountant to do. It is so much nicer to know ahead of time what is owed. It makes me want to use my accountant for more things.
GREAT read @SteveChase !!! Definitely, something I was looking for...I was intuitively leaning towards value pricing. However, I think, I still need actual factual to see the true "value". It became even more of a haggle when a client asked me to itemize the task/duties that I performed for the hourly billing invoice I presented. I instantly appreciated QBO audit log. However, it became more work than I anticipated. Thus, my rethinking and utimately my desire to revamp my pricing method.