How to Decide on Your Firm’s CAS Pricing

Businessman and tablet with the word "pricing" above.Make sure your midlevel offering is as profitable as possible.

By Hitendra Patil
The Definitive Success Guide to Client Accounting Services

When your prospects shop for client accounting services, what they find out about pricing methods and trends defines their expectations. If you follow very different approaches to price your CAS offering, it will take significant effort on your part to educate the prospects (and existing clients) about why you are pricing CAS the way you are.

MORE: CAS Pricing and The Accounting Profession | How CAS Communications Are Different | Your Firm’s Processes Can Set You Apart | Technology and Your CAS Clients | Top Five CAS Killers and How to Overcome Them | 21 Ways to Adjust Your Practice in 2021
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As they say, it’s easier to ride the horse in the direction it’s going. It is good to first conform to the perceptions of prospects when it comes to your CAS pricing. Once you ride the horse, you can direct it to the destination you want to take it to. Once you conform to the pricing method (not the dollar value) expectations of the prospect, their anxiety and perception of risk (what value will they receive in the price they are willing to pay) reduce. After that, they are more open to evaluating the choices you present to them.
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James Lopiccolo: Sell Service, Not Hours

Small firm attacks the big issues with novel strategies.

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With Steven Sacks
The NEW Fundamentals: Thriving in Disruption

The accounting profession is “stuck in a rut,” says James N. Lopiccolo, founder and managing member of Capocore Professional Advisors, in Lake Orion, Mich.

He says CPAs can’t see “the challenges that are coming by from other non-CPA firms.”

MORE: Effective Networking is an Art | Business Development Activities Shouldn’t Be a ChoreCPA’s Best Role: Leveraging Knowledge, Not Just Process | Avoid Last-Minute Deal Making | Five Common Negotiating Mistakes | The Myths of Performance ManagementBusiness Is About Relationships | Reaching for Authenticity in Client Service |

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Lopiccolo’s answer is offering service agreements, instead of billing by the hour. Risky? Sometimes. But clients love it.

^ Download and subscribe to the podcast on iTunes here

In more than 31 years of public accounting, Lopiccolo has worked in business advisory, tax, and accounting for a multitude of industries including contracting, manufacturing, medical, professional service companies, and real estate. He serves on the Michigan CPA Association executive committee and the finance committee, and he is a two-time chair of the AICPA Small Firm Practitioners Task Force.

11 Key Takeaways:

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How to Price Client Accounting Services

Price and value balanced on scale above a tablet computerPushing the profit per person.

By Hitendra Patil
The Definitive Success Guide to Client Accounting Services

Pricing your services correctly to ensure reasonable profitability is a major decision you will make in your client accounting services practice.

MORE: How CAS Communications Are Different | How to Write Your CAS Engagement Letter | 12 Signs It’s Time to Outsource | Will 2021 Be Your Cash-Flow Year? | Identifying the Right Clients for CAS | CAS Is, First, a Communication Challenge
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Our survey results revealed how CAS firms price their CAS offering:

  • The topmost method of pricing CAS offering was fixed/flat fee, used by 41 percent of the respondents.
  • The next most common method of pricing CAS was a mixed method of pricing (a mix of hourly, fixed and value pricing), charged by 36 percent of respondents.
  • Hourly billing method was used by 33 percent of respondents.
  • About 28 percent of respondents used value pricing as the method for CAS pricing.

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How CAS Communications Are Different

Woman and man meeting in an officeHelp clients make decisions, don’t just report on what happened.

By Hitendra Patil
The Definitive Success Guide to Client Accounting Services

A successful client accounting services practice requires increased interactions with clients. Your usual non-CAS methods of client communications are not sufficient to meet the demands and expectations of your CAS clients. You must leverage new tech tools to reach out, communicate and collaborate with clients more frequently.

MORE: How to Write Your CAS Engagement Letter | Designing Your Firm’s CAS Processes | How to Create Your Firm’s CAS Team | The Technology Stack You Need for CAS | Communicating CAS to Clients and Prospects | How to Communicate the Value of CAS | Don’t Wear a Mask
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Some accounting software can help you automate client notifications (by email/text) based on customized triggers set up in the software. Similarly, automated payroll software can keep clients informed automatically. Mobile apps of core accounting software are becoming a necessity to deliver client service and communications.

Why?
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How to Write Your CAS Engagement Letter

Woman holding paper at deskDefine not just what, but also when.

By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant

“People think of us (accountants) as the compliance agents – the necessary evil.”

This sentence haunts me even today, after hearing it nearly 15 years ago from a multi-award-winning, highly experienced CPA.

MORE: Designing Your Firm’s CAS Processes | Your Firm’s Processes Can Set You Apart | Technology and Your CAS Clients | Top Five CAS Killers and How to Overcome Them | 21 Ways to Adjust Your Practice in 2021 | How to Become an Outsourced/Virtual CFO
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Perception!

Has the accounting profession’s brand been (predominantly) perceived as “compliance” only?
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Designing Your Firm’s CAS Processes

Process Touch Screen Showing Workflow DesignYou might find yourself working backward.

By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant

We have examined how you can enhance your firm’s internal processes and what factors influence those processes. In this post, we will focus more on CAS-specific processes that can give you competitive advantages. However, this post is not about the technicalities of accounting processes. As a professional accountant, you already know the accounting fundamentals required to create your processes for each of the segments of the services you provide.

MORE: Your Firm’s Processes Can Set You Apart | 12 Signs It’s Time to Outsource | Will 2021 Be Your Cash-Flow Year? | Identifying the Right Clients for CAS | CAS Is, First, a Communication Challenge
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Are client accounting services processes different than what you have been doing until now? Yes, and no.
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Your Firm’s Processes Can Set You Apart

Not just in operations, but client experience.

By Hitendra Patil
The Definitive Success Guide to Client Accounting Services

If you were to define in three sentences how your firm is different, what would those three sentences be? Write them down.

MORE: 12 Signs It’s Time to Outsource | How to Create Your Firm’s CAS Team | The Technology Stack You Need for CAS | Communicating CAS to Clients and Prospects | How to Communicate the Value of CAS | Don’t Wear a Mask | The 8-Step Method for Launching Client Accounting Services | What CAS Is … and Is Not | Client Accounting Services: The Definitive Guide
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Read those the next day and judge for yourself if your competitors can say the exact same three sentences to differentiate their firms. If yes, you will see why this is a significant challenge for your firm’s growth aspirations.
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12 Signs It’s Time to Outsource

Four businessmen standing on world mapALSO: Seven COVID-driven client needs.

By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant

When you are the key person to make things happen at your firm, you want to invest as much time in “business development” (not just marketing and sales) as humanly possible. Your firm’s growth will make you feel that producing and delivering your services is an essential core business function for you, but some of it is not.

MORE: How to Create Your Firm’s CAS Team | Technology and Your CAS Clients | Top Five CAS Killers and How to Overcome Them | 21 Ways to Adjust Your Practice in 2021
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Freeing up yourself to spend more time focusing on the things that add value to your practice and help set it apart from the competition is the most essential differentiating growth strategy you will ever deploy. The same principle applies to your experienced, talented staff.
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How to Create Your Firm’s CAS Team

Plus how to boost their skillsets.

By Hitendra Patil
Accountaneur: The Entrepreneurial Accountant

“We do not have the staffing for client accounting services.”

Non-CAS firms cite this as the topmost reason for not being able to offer CAS. Nothing could be further from the truth.

MORE: Technology and Your CAS Clients | Will 2021 Be Your Cash-Flow Year? | Identifying the Right Clients for CAS | CAS Is, First, a Communication Challenge | Which of Your Existing Clients Are CAS-fit? | Client Accounting Services: The Definitive Guide
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Experience of firms that offer CAS, including that of small firms with fewer than five staff members, proves beyond doubt that you do not need more staff to start offering CAS. Even solo practitioners provide CAS. The only thing you need to begin your CAS journey is to be ruthless, relentless and fearless to leverage newer and cloud technologies. Automation, integration and even artificial intelligence make it easier, faster and cheaper to perform some repetitive, time-consuming work of accounting firms.
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