When Value Pricing Works

What ECON 101 and inelastic demand curves teach us about billing rates.

rubber band iStock_000009459899SmallBy Frank Stitely, CPA, CVA

Before we turn our hymnal to page 10 and sing that old favorite "We're Not Selling Time. We're Selling Knowledge," let's consider if clients are buying what we're selling.

When you go to the grocery store, do you ask, "I'd like to buy the cow milking knowledge of a farmer?" Of course not. You ask for a gallon of milk. Customers buy outcomes, not inputs. READ MORE →

The 4 Dark Clouds Hovering Over Cloud Accounting Software

And the two professional remedies you already know.

By Frank Stitely, CPA
Stitely & Karstetter PLLC

Cloud accounting software revolutionizes our relationships with our clients, enhancing our ability to provide real-time and forward-looking tax and accounting services. At the recently concluded Sleeter Conference in Las Vegas, cloud vendors promised zero data entry, the editing of transactions in spreadsheet format and seamless integration with best of breed third-party applications.

They didn't mention, however, that their programmers redefine accounting principles by sacrificing sound internal control at the ease of use altar. Before launching your clients into the accounting cloud, evaluate the risks currently ignored by many, if not most, cloud vendors. READ MORE →

Value Billing on the 19th Hole

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. READ MORE →

The IRS and Big Data Gone Bad

Bookkeeping data is notoriously unreliable. So why is the IRS relying on it?

The Ten-Minute Bookkeeping Test (PDF)
Click to download

The 10-Minute Bookkeeping Test

By Frank Stitely

“Please give me a copy of your 1099-MISC forms.”

The IRS agent was a 25-year-old woman, with only a couple of years of experience dealing with my client.

My client was the “How-dare-you-question-me?-I’m-a-taxpayin’,-God fearin’-American” type of client – one of those guys  who think the Marlboro Man is a wimp.

But he had a tax problem. He was being audited and he had thrown out all of his paper records when he moved his office.

Missing 1099-MISC

He didn’t have copies of his 1099-MISC forms.  So he had his bookkeeper reprint them from QuickBooks.  I gave them to the IRS agent.

“Mr. Stitely, these 1099 forms don’t match what we have in our records.” READ MORE →

Will Zero Data Entry End Your Tax Practice?

Five things you need to know and three things you need to do.

by Frank Stitely, CPA
Stitely and Karstetter 

Get ready for a transformation in the tax business unlike anything we have experienced since Turbotax.  The transformation will force many of your colleagues to sell, retire, or go out of business.  It will force many of your staff out of the profession.  It will change the way you serve clients.  And, it will either result in tremendous opportunity for you or end your practice.  This transformation is zero data entry.

More Stitely: Three Trends That Will Transform Your Tax Practice or Eliminate It  |  Value, Billem & Dunn: A Value Billing Case Study  |  Why Value Billing Won’t Transform Your Life  |  The Problem with Frank Stitely? We Need More Frank Stitelys!  |  The Problem with Timesheets? Not Enough Timesheets!   |  Who’s Missing in Action From Your Workflow Processing System?   |   How to Make an Extra $72,000 by Working Smarter READ MORE →