Do you know what the majority of accountants that come to me have in common?

Most of them make the same huge mistake in the way they structure their pricing. Or, rather, they don’t have any structure at all. The majority of them charge their clients for the time that they spend on their tasks.

While this may sound fair – you get paid for the time that you spend working – it doesn’t work in the long run. In fact, it devalues the services that you provide to your clients. Why?

If you use hourly-based pricing, you’re no different than all the other accountants out there. Your client treats you as a mere service provider. They have a problem, they ask you, you do the work, you get paid. Unfortunately, this means there’s no room for a true partnership and collaboration.

Often, when companies find the right accountant it’s a partnership for life (of the company anyway). But if it’s an hourly-based work, it’s hard for you to truly show what you’re capable of. Which means that even if your client stays with you, they don’t benefit from your services as much as they could.

Of course, this is not the only problem. Hourly rates also prevent firms from scaling.

Think about it like this.

If the client pays by the hour, you get paid the same amount no matter how complex the task was.

And just because an accountant finishes a task quickly doesn’t make it any less complex. This means that you (or your employees) get paid the same amount regardless of the task.

There’s no incentive to offer more complex services and provide your client with extra value. This makes it hard to scale your business or stand out from the crowd.

And the worst is – if you are charging your clients by the hour, you are losing money on a daily basis.

Imagine how much more you could charge if you separated complex services that add extra value from basic tasks any accountant can do.

Simply speaking, if you want to grow, there are way better pricing models to consider. Hint: price up front, get rid of hourly rates all together and keep the time sheets – $1 per hour.