Accountants undervaluing their services

An absolutely fantastic article by one of the best in the business.

Read, mark, learn, inwardly digest, adapt and adopt these wise words.

I have learned so much from John Niland over the years.  You could and should too.

David

I entirely agree that there is so much more that accountants can do for their clients than a compliance type work.

I am also astonished by how ignorant both accountants and their clients are of this fact. 

Accountants need to learn how to work as strategic partners with their clients, that way the relationship is maintained, the client gets good value and the work becomes more interesting. 

Next time you pitch for a job double your usual fee...

Youll only win half as many...but have the same turnover for half the work...

If you win every job...you are too cheap anyway...supply and demand graph..move yourself up the scale

but, the charging issue is also "horses for courses". The sort of clients who only want the rock bottom price (they probably shop in the pound shop and at Iceland) are also unlikely to be the sort of clients who will ever grow their own businesses. In the grand scheme it is better to leave those for the sort of accountants who agree low fixed fees - both can then happily feed on the bottom together!

Vurtual Tax Support and Know-how for accountants: www.rossmartin.co.uk

I calculate/estimate hidden value is worth £58,500 net profit per partner and suggest the route cause is time recording. This inward focus tricks accountants into thinking time is money.

@Tom – instead of just doubling your fee, how about respecting the client, building value and commitment with a consultative approach to relationships?

Bob Harper

Marketing for Accountants

While I agree with many of the above comments and certainly subscribe to the view that our services are worth our charge-out rates, the simple fact of the matter (here in the Irish Republic at least) at present is that clients of all shapes and sizes will simply not pay what they are being quoted - it is unfortunately a race to the bottom on fees here, the place is awash with tyre-kickers who are just using quotes to go back to their existing accountants with leverage to barter down lower and lower fees - you just cannot quote what you know to be a fair fee because you will just not get it and you end up winning no business whatsoever - clients are falling off by the bucket-load, and I know of more than one Practitioner here in Dublin who has closed down their Practice in the last month after more than 20 years of being in business simply because long-standing clients have jumped ship over nothing more than lower fees - the only way to keep surviving at the minute is to get our internal costs under control, which will allow us to remain competitive with lower quotations, despite what we know the true (higher) value of our services to be

I don't agree that it is just the "bottom-feeding" small, non-growing clients who are fee-sensitive right now, and I think to take that view is rather narrow-minded and patronises the smaller clients in every Firm who, let's be honest here, are the reason that each Firm grew in the first place - it's also the medium audits and large multi-national groups who are calling for lower and lower fees in Ireland and many Practices here are crumbling - in fact, some of our best business in our Firm this year has come from our UK clients, not our Irish ones

i wish i had the confidence to double my fees .

i am 100% confident that most clients do not actually 'value ' what i do, but they do 'appreciate it'. - sadly one gets warm words and one £loads.

At the bottom end, clients who whine about £1k in fees are a pain, but acquiring £5k accounts has eluded me for aeons.

who wants to join my practice and show me how it's done?

I'm all for charging a higher fee and then adding more value for my clients.

If compliance work is charged at x the client probably values it close to 0 as it is just a painful necessity for them. If you can charge 2x and use the extra fee to provide value of y then you are clearly better value for money.

It takes courage to do it at first but I only quote fees that allow me to add value in this way. My conversion rate is about 80%. If you help the client to grow then you can grow your fee base organically too. I get a lot more satisfaction too so everybody wins.

First time I tried this technique was with a client I'd previously quoted £2,000, and who'd replied "I'll think about it."  I went back to them, used the new ideas and quoted £5,000 for essentially the same work.  This time the reaction was "That's a bargain.  How soon can you start?"

Reason?  They now saw the value in me doing it and the RoI was incredible!  For me, if it was going to be profitable at £2k, it was a no-brainer at £5k!

I can help you or anyone else see how to do something similar.  Take a look at my special message page .

I've come across this thread a bit late, but I love it.  Services tend to be intangible and harder to value than goods, so finding ways of increasing the client's s perception of value through a combination of explaining the value of what you do and increasing the value you deliver will be critical in enabling practices to survive in the face of increasing competition.

It's with exactly this in mind that online services have emerged.  Having constant and instant access to client information opens up new ways of sharing information and collaborating with colleagues and clients. It enables practices to make what they do more visible to clients and to deliver new services that clients value more highly.

There have been too many arguments that online services/cloud services/software as a service (call it what you will) are cheaper to buy and carries less overheads to maintain.  While that may be true (in some cases), the most important point is the opportunity for practices to significantly improve their value proposition.