The topic of pricing is the most requested topic I have had in 19 years advising Accounting firms. Just recently I did a webinar on the topic on had close to 3,000 people listen in. I think it is so popular because Accountants are not taught how to price their intellect and value contribution.
As as result of not being taught how to price appropriately most adopt the archaic “Rate X Time = Price” system. It’s outdated, doesn’t work for efficiency and certainly encourages the wrong behaviour at the team level.
I have devised a formula for pricing “Value Belief + Value Perception + Value Contribution = Ideal Price”.
So to get to the ideal price you must believe in yourself/team/project, put your value across in an articulated way and make sure you are contributing to the clients situation.
If you are not contributing to your clients results, you do not believe in the work that you do and you cannot put that across to your client then expect to have low margins.
What holds Accountants back from pricing appropriately are limiting pricing beliefs (see picture) and talking too much in inputs (things we are going to do) rather than outputs (what the client gets as a result of the work that you do for them).
All of this can be fixed with appropriate training. The type of training I am talking of has helped our member firms be 29.8% (on average) more profitable per partner than the rest of the Accounting profession.
To help you out we have created an ‘office / home study’ training program just on the topic of pricing. It’s 11 modules of video based training. It comes with checklists, forms, letters, workbook, examples, templates and a price list of 275 services priced by 300 Accounting firms. You can investigate and buy the product here.