Any billing method that relies on client ignorance is certain to fail.
By Frank Stitely, CPA
Stitely & Karstetter, PLLC
Value billing advocates exhort us to bill based on the benefit a client receives, but that’s just the demand side of the economic equation. Competition is the supply side. Here’s a little fable based on Ed Mendlowitz’s “Value Pricing: A Lesson in Applying Judgment,” where a CPA asks for billing advice and then bills a client $7,000 for three hours’ work.
“Great day, Al. Have you ever shot an 80 before?”
“No, Jay. This is my first. This round of drinks is on me.”
Jay continued, “You’ve had quite a week. First, you got your line of credit. Now the best golf round of your life.”
Al had just finished a round of golf with his banker, Jay; a neighbor, John; and John’s CPA, Greg.
“Jay, I am blessed with having great friends and advisors. You did a marvelous job. But, I should give some credit to my CPA, Frank. He put the entire package together for seven grand. That seems like a great price.”
Al saw the puzzled look in Greg’s eyes.
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