Billing: Why incentives matter
Ron Baker reflects on the shift from hourly to value based billing and explains how to make your pricing structures more efficient.
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Incentives and consequences
I’ve argued for a long-time that billing time is at best unconsciously unethical – it just encourages accountants to take their clients for granted. Many accountants are “value arrogant” in the sense that they believe they deserve to make a good living just by showing up. After all, they are qualified.
I agree incentives matter and so do consequences – start with partner and employee remuneration. If your strategy is to add value you should know how much value YOU added to the firm and the clients last year and your pay should be linked to it.
Are you tracking your personal value? Has your firm defined what value is?
To be effective externally (with clients) you need to be effectively internally – practice owners should start with strategy, move on to marketing, appreciate the role of sales and then the value, price and ROI can be discussed with the client.