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Daily timesheets, change orders and other ways to ease your load.

By August J. Aquila
Price It Right: How to Value Accounting Services

Is the phrase “effective billing philosophy” an oxymoron? I’m beginning to believe that it is. Analysis of the results of current billing and collection procedures and policies reveals that, for the most part, they aren’t working very well.

MORE: Get Clients to Accept Your New Pricing Philosophy | Getting Partners to Accept a New Pricing Philosophy | Ethics Question: Commissions and Contingencies | How Competitors Drive Pricing | What We Know about Pricing Strategies | When Hourly Billing Hurts Profits
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The fact is, they have not worked well for decades. While it is true that most firms have some sort of billing procedure and some even have a billing philosophy that is taught to each new biller, the fact is they are seldom followed. Hence, very few firms have an effective billing and collection philosophy.
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A client who does not contribute to your bottom line is not a client.

By August J. Aquila

Once your partners are sold on the new pricing philosophy, you will need to communicate it to your clients. There are five ways to get clients to understand and accept the new pricing methods. Each of these methods is discussed below.

MORE: Getting Partners to Accept a New Pricing Philosophy | When to Use 11 Alternative Pricing Methods | Make the Value Curve Work for You | How to Leverage Demand In Your Pricing | Make the Most of Your Marketing Mix
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Believe that clients will accept a new pricing method: If you don’t believe it, you can be sure that your clients won’t either. It is not unusual for physicians, stockbrokers and attorneys to change billing methods. Actually, most of your clients will understand what you are doing if you clearly communicate with them. There is a truism that good client relationships are based on trust. The clients trust that you will do the right thing for them. If they lack this trust, no matter what pricing method you employ, you will have problems with your client.
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They have to be on board before clients.

By August J. Aquila

Once you have decided to adopt an alternative pricing philosophy, what do you do next? Changing your firm’s pricing philosophy is really a three-step process.

MORE: When to Use 11 Alternative Pricing Methods | 12 Subjective Factors for Pricing Your Next Engagement | How Utility and Value Affect Pricing | The Four Phases of Service Life | Marketing Orientation Is What Firms Need
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First, you need to consider several factors before suggesting a change. Second, you need to get your partners to agree that it is a good idea, and third, you need to educate your clients so that they accept and understand the new approach. The steps are not easy, but they are possible. And, remember, change does not occur overnight.

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Plus why.

By August J. Aquila

There are many ways to price professional services. Alternative pricing methods in the legal profession have received much more attention than in the accounting profession. In fact, entire publications have been issued by the American Bar Association on this particular topic.

MORE: 12 Subjective Factors for Pricing Your Next Engagement | Ethics Question: Commissions and Contingencies | How Competitors Drive Pricing | What We Know about Pricing Strategies | When Hourly Billing Hurts Profits
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I am aware of at least 14 different approaches to billing that attorneys can use under different sets of circumstances. Obviously, each method has advantages and disadvantages as well as marketing and operational implications. I maintain that several of these methods can be used by accountants and consultants in accounting firms when pricing their services.
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