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Since the early 1900s, accountants have generally been charging their clients by the hour. Hourly billing, however, does not benefit your business. This "cost to serve" pricing model rewards CPAs for billing more hours, not less. Such practices offer no incentive for CPAs to improve efficiency, project management, or effective decision making - hallmarks of outstanding service.
Simply put, charging by the outcome achieves better end results. Brian Amann talks about the business benefits of fixed-fee pricing in the Colorado Society of CPAs article, Will Hourly Billing Ever Die? “When you have an incentive to be more efficient, there is more focus on innovation, use of technology, and project management. In an hourly world, chaos is rewarded. Not so in a fixed-fee world.” Hourly billing will die when business clients demand accounting services be priced based on best outcomes, not output.
In a fixed-fee world, clients buy results. Fixed-fees are negotiated upfront and tied to achieving client-driven results around a specific scope of work. Once price is set, work can proceed without the distraction of further billing activities, allowing both the client and the provider to collectively focus on achieving best outcomes. Progress toward these results becomes the measuring stick of success.
Read the article at Colorado Society of CPAs or download now.
Will Hourly Billing Ever Die? in Colorado Society of CPAs (10016 KB)
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Brian Amann can be reached at 303.921.5310 or send an email.
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