Pricing Strategies: The Real World vs. The CPA World

Businessman and tablet with the word "pricing" above.7 types and how they work.

By August J. Aquila
Price It Right

Pricing in the real world is much different than in the accounting profession.

MORE: Marketing and the 5 P’s | How to Shift from Production to Marketing Orientation | How Traditional Fee Methods Hurt Firms | 6 Questions for Planning Your Succession | Underperformers Come in Many Shapes and Sizes | 6 Focuses for Managing Partners | 10 Steps to Transitioning to a New MP | What Managing Partners Should Be Doing
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Usually, wholesalers and retailers set their prices by using markups as the product moves through a distribution channel. Producers or manufacturers usually set a list price. Think of the manufacturer’s suggested list price on the window of a new car. Car dealers will use various methods to price the new vehicle.
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Why Pricing Is the Fifth ‘P’ in Marketing Plans

Not 4. That's old thinking.

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By August J. Aquila
Price it Right: Valuing Accounting Services

Forty years ago, in 1977, the landmark U.S. Supreme Court decision in Bates & O'Steen v. State Bar of Arizona, 433 U.S. 350 (1977) changed the accounting profession forever.

MORE: How to Shift from Production to Marketing Orientation | 4 Ways a Production Orientation Can Harm a Firm | Price to Get the Maximum Fee | 7 Issues in Partner Retirement Planning | Is It Time for a Partner Compensation Checkup? | 13 Points of a Good Compensation Plan | 5 Ways to Keep Your Edge | The Toughest Job in the World: Managing an Accounting Practice | How to Become the Firm of Choice
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That decision prompted accountants to pursue a wide range of marketing activities. And, ever since that eventful day, accountants have been struggling with the meaning of marketing and the impact of marketing on their practices.
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The 12-Step Plan for Embracing a Growth Mindset

Stack of cards labeled with question marksWhen the 'production' mindset fails.

By August J. Aquila

There is no quick way to change from a production orientation to a marketing orientation.

MORE: 4 Ways a Production Orientation Can Harm a Firm | Why Choose a Marketplace Orientation? | Why Value Pricing? | Solving Underperforming or Dysfunctional Partners | The 3 Types of Partners You Need | How MPs Can Make a Real Difference
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Firm leaders need to embrace this new orientation and reward partners accordingly. To help you evaluate your firm see the table below.
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4 Ways a Production Orientation Can Harm a Firm

Men doing precision work on a production lineWhat kind of partner is more valuable?

By August J. Aquila

A pure production orientation can have negative consequences for an accounting firm.

MORE: Why Choose a Marketplace Orientation? | How Traditional Fee Methods Hurt Firms | 6 Questions for Planning Your Succession | Underperformers Come in Many Shapes and Sizes | 6 Focuses for Managing Partners | 10 Steps to Transitioning to a New MP | What Managing Partners Should Be Doing
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These consequences include a focus on internal measures, billable hours and technical aspect of tasks, and inhibit the development of a marketing orientation.
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Why Choose a Marketplace Orientation?

Smiling businesswoman offering a handshake5 basic principles to follow.

By August J. Aquila

Let's look at the different focuses or orientations that firms can take toward managing and running their practices and see which ones the traditional pricing methods encourage.

MORE ON GREAT PARTNERSHIPS: How Traditional Fee Methods Hurt Firms | Price to Get the Maximum Fee | 7 Issues in Partner Retirement Planning | Is It Time for a Partner Compensation Checkup? | 13 Points of a Good Compensation Plan | 5 Ways to Keep Your Edge | The Toughest Job in the World: Managing an Accounting Practice | How to Become the Firm of Choice
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Any organization, whether an accounting firm or not, usually tends to have one of four focuses. They are either selling-oriented, product-oriented, production-oriented or marketing-oriented.
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How Traditional Fee Methods Hurt Firms

A road sign depicting falling dollarsRule of Three and cost-plus overlook some key considerations.

By August J. Aquila

The time has come for the accounting professional to rethink the paradigm on which pricing has been based. Let's discuss the traditional methods of price setting and how they can have a negative impact on a firm.

MORE: Price to Get the Maximum Fee | Why Value Pricing? | Solving Underperforming or Dysfunctional Partners | The 3 Types of Partners You Need | How MPs Can Make a Real Difference | 5 Reasons That Leaders Fail | 11 Things All Partners Must Do | Why Partners Need Written Goals | The 6-Step Plan for Transitioning Clients

GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

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Price to Get the Maximum Fee

Piggy bank on scale with dollar signsDon't work more hours or harder; work smarter and learn how to price your services accordingly.

By August J. Aquila

Twenty-two years ago, there weren’t many articles or books written about pricing methods. Most of the literature at that time dealt with billing and collection. If you search the topic today, you will find hundreds of articles, videos and books to read or watch.

MORE ON GREAT PARTNERSHIPS: Why Value Pricing? | 6 Questions for Planning Your Succession | Underperformers Come in Many Shapes and Sizes | 6 Focuses for Managing Partners | 10 Steps to Transitioning to a New MP | What Managing Partners Should Be Doing | Do Your Partners Pay Their Own Way? | 7 Keys to Becoming an Equity Partner | How and Why to Achieve Partner Unity
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

If you search the topic today, you will find hundreds of articles, videos and books to read or watch.
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