Just in case you haven't noticed, over the years I've had some discussions with various members about Value Pricing (VP).
The members who disagree with me seem to think VP is about ripping clients off. They prefer a "time/cost plus notional profit" approach to pricing, sometimes using timesheets sometime not.
I come at this from the position that time/cost pricing is selfish/self-centred and effectively makes the profession unethical. Continuing with time/cost pricing will make the accounting profession irrelevant. The conclusion is that accountants will just do is more accounts/tax returns as they gradually become more efficient forced by prices falling.
Many existing practitioners may get out before they experience too much pain, but what about the future?
When you understand VP you appreciate it is the only approach to pricing that:
- Puts the client first
- Fully aligns the accountant and client
- Encourage and rewards innovation
- Drives down costs on low value work
- Maximises value for everyone (clients, practice owners, employees and society)
Pricing is fundamental to strategy so it seems sensible to me to understand as much as possible about such an important topic. At the end of the day being an accountant in practice requires much more that technical knowledge of accounts/tax. But, there is another reason to fully understand VP.
Business owners expect/need this extra knowledge (especially now) and an accountant who does not understand VP and just prices with cost/plus will probably only be able to talk to their client about things like job costing.
Over the years I have invested time and energy to build my knowledge of VP through:
- Reading books
- Attending seminars and Webinars
- Accountants (and other professional) who have adopted VP
- Using VP
I'm interested to know where you have gained your understanding. What have you actually done to build your knowledge of VP?
Bob Harper
Replies (380)
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My dear chap
@Nigel - what part of alignment do you think clients will object to?
Paying for advice that:
Reduces their taxIncreases their profitSaves them timeIncreases their wealthReduces their stressGives them more freedom to do what they enjoy outside work
I do all that already. I am sure that all the posters here do that already. It is what any half-decent accountant does. Now tell me again why I need to join the Church of VP?
Hopefully yours,
N
that's not new
@Nigel - what part of alignment do you think clients will object to?
Paying for advice that:
Reduces their taxIncreases their profitSaves them timeIncreases their wealthReduces their stressGives them more freedom to do what they enjoy outside work
I could go on but you get the point.
@Shirley - the first step is to understand why you have not adopted VP. You seem reluctant to be specific?
Bob
that's not new Bob in fact it's as old as prostitution itself (or was that accountancy? Can't remember which of the two essentials of civilization came first.)
Civilisation
that's not new Bob in fact it's as old as prostitution itself (or was that accountancy? Can't remember which of the two essentials of civilization came first.)
Neither - comedy was first. Quite appropriate, really :¬)
very good
that's not new Bob in fact it's as old as prostitution itself (or was that accountancy? Can't remember which of the two essentials of civilization came first.)
Neither - comedy was first. Quite appropriate, really :¬)
I notice you went with the S not the Z ! bloody American spell checking....although my oxford dictionary said Z and listed S as an alternative...have the yanks bought Oxford too I wonder.
Mugs?
"Paying for advice that:
Reduces their taxIncreases their profitSaves them timeIncreases their wealthReduces their stressGives them more freedom to do what they enjoy outside work"
You think accountants are miracle workers. We can do some of that but there are limits. Our clients are not fools.
It would appear that you think by saying you can do all this, and wanting paying, you can achieve it when in reality you are looking for gullible mugs.
You really are...
@Kent - reading a few posts makes me say a little bit of information is dangerous.
...an ignorant [***]!!!
When someone demonstrates quite clearly that you're wrong you can't respond in any other way than insults
Peddle your ideas expecting what....?
Based on your complete lack of success over the last 5+ plus years and the way you conduct yourself on here I'm not surprised the only accountant to sign you up is an AAT with no practice experience.
God help you and them
and their clients (with a bit of luck they'll see the light and find a decent accountant).
.
I was idly wondering if it had occurred to Bob that lots of clients do actually value compliance work done properly. And by properly I mean doing basic stuff such as saving them tax, looking at their bookkeeping, seeking improvements to their business if anything springs to mind.
Not least if they have had some iffy solo accountant or bigger firm's unsupervised junior fudge it up before hand.
Could this be his epiphany?
Important point
I just thought I'd take advantage of the opportunity to type this sentence.
May I?
I just thought I'd take advantage of the opportunity to type this sentence.
Take this opportunity of nominating this post for the "Most Useful Post of the Thread Award"
Well - I liked it anyway!!!
Thanks Mwngiol
JCresswellTax was right
If I said to my clients that I could:
Increase their wealth,
Reduce their stress,
Give them more freedom to do what they enjoy outside work, and
Help them to achieve excellence.
I am sure they wouldn’t be able to get out of the door fast enough and label me a bullshitter.
offer
If I said to my clients that I could:
Increase their wealth,
Reduce their stress,
Give them more freedom to do what they enjoy outside work, and
Help them to achieve excellence.
I am sure they wouldn’t be able to get out of the door fast enough and label me a bullshitter.
I would stay if you offered added value, say a high class hooker for half an hour for free. That's satisfied 2 to 4 you can get on with 1!
Leave the label for Bob
If I said to my clients that I could:
Increase their wealth,
Reduce their stress,
Give them more freedom to do what they enjoy outside work, and
Help them to achieve excellence.
I am sure they wouldn’t be able to get out of the door fast enough and label me a bullshitter.
I would stay if you offered added value, say a high class hooker for half an hour for free. That's satisfied 2 to 4 you can get on with 1!
Blimey ...
... spend the morning adding value to a client and see what happens!
For the record, the £200/£2000 job comparisons was just that, I prefer the £750 financial statements/CT600 jobs, big enough to get out of bed for and small enough to not loose sleep over when you're in it.
But, that is personal preference - horses for courses, I wouldn't boast about the size of my average fee, or belittle anyone for theirs, we alll find what we prefer.
Also Bob, I never said you couldn't add value on a £200 job, in fact it is probably easier, and most likely on a percentage rather than absolute basis probably a lot more value than you could add to a £2000 job.
As I see it your VP model uses compliance work as a loss leader, so if you priced compliance on a cost/time basis and all other work on a value basis you would actually achieve higher income and profits than your model, the alleged only credible pricing model!
@Peter - no I am saying that if accountants changed their business/pricing model they would be better.
Bob
Hogwash, can you substantiate this? They may make more profit, they may make less, but better assumes quality of advice given which depends on many variable and has no direct co-relation with your pricing model. How good you are detemines what your value is not vice versa!
Deluded
Perhaps Crunchers has most value with AAT accountants with no practice experience.
Deluded me thinks...much to learn....mmmm
I'm with BKD now ...
... much more of this and the ozone layer will be gone.
Bob, learn the difference between being enthusiastic and bening patronising.
I suggest you read Dale Carnegie's book
Well said that Man
Bob, learn the difference between being enthusiastic and being patronising.
Comments Closed
Unfortunately, due to the number of personal / disruptive comments in this thread, comments are now closed. Out of respect for the constructive points raised in the debate, we'll be leaving the discussion up.