Discuss value pricing this tax season
February 04, 2016

Accountants see the majority of their clients between February and April - that is, after they've gotten all their tax forms collected, but before the filing deadline. They'll be doing a lot of work during these three months, and advances in accounting software allow them to get the job done more efficiently than ever before. Yet this efficiency is left unrecognized if individuals continue billing by the hour. Instead of relying on the same methods as before, accountants should talk with their clients about the benefits of value pricing.

What is value pricing?
Value pricing is a concept where the worth of a specific service is based on its end result. This outcome is determined by a number of factors, including client satisfaction, quality and customer demand. It's the opposite of hourly billing, which is based on the idea that the price of a service is determined simply by the amount of labor involved.

Value pricing, essentially, assures a certain level of quality and puts power in the hands of consumers. They'll know they're getting the exact service they've paid for. Meanwhile, accountants won't lose out when completing difficult work in less time than before. 

Bringing the idea to clients
Customers may resist the idea of value pricing at first. After all, hourly billing has served them well in the past. It's a reliable method with straightforward expectations, and clients have a clear understanding of their bill. Also, they'll consider tax season a hectic period to enact change. Yet value pricing creates mutually beneficial relationships between accountants and clients - both parties leave feeling good about the situation. Clients know they're getting the service they pay for, and accountants know their work is respected.

When proposing a value-based structure to clients, accountants must begin with a conversation. The Journal of Accountancy said this is the time for individuals to understand their client's needs and what they expect to see during tax season and the rest of the year. They can ask questions relating to a client's growth plans, business operations and service standards. Accountants should also use this discussion to detail their experience and the scope of their work. They need to assure customers this new pricing scheme will prioritize quality.

Accountants should then ask their clients what price they're willing to pay for an optimal experience. Value pricing is equal parts service and customer expectations. Having this information helps accountants create a pricing scheme satisfying for all parties.

Your time and skills are valuable. Let Sage help you adopt value-based pricing to benefit you and your clients.

Nexus: G-WEBCD5