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How to turn advice into paid advice

4th Apr 2024
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Are you running an accountancy practice? Or is it running you?

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Answering quick, off-the-cuff questions from clients is helpful and accommodating, but it can lead to two consequences. Clients don't fully appreciate or respect your value and you don’t get rewarded for your years of experience.

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So should you charge for answering these types of questions? And if so, how should you approach it?

Let's address the 'Should you …' factor first of all.

Should you charge for answering these types of questions?

Your ability to answer instantly is testament to your qualifications and unique experience. If the answer was easy from the client's perspective, they wouldn't be asking you.

Many accountants are used to charging for time rather than value. So it hardly seems worth it to charge for a brief reply. However, this means you're not being rewarded for the value you bring.

Consider this story.

A factory faced a crisis when a critical machine stopped working. The factory's engineers couldn't fix it, so they called in an expert. The expert assessed the situation, took a hammer, and gently tapped the machine in a specific spot, immediately fixing it. The expert submitted a substantial invoice, and when asked for an itemised breakdown, he responded:

   - Tapping with a hammer: £1
   - Knowing where to tap: £9,999

In value-based pricing the price is determined by the value provided to the client rather than the time or effort expended. It highlights the importance of specialised knowledge and expertise in solving complex problems efficiently.

Unclear about value pricing? Watch this free video to get greater insights: 

WATCH VIDEO

How should you approach charging for answering these questions? 

Use your discretion, but remember that demonstrating value and charging for it can increase respect and appreciation from clients. 

Of course, there will always be people who want everything for nothing, but do you really want to work with these clients? They’ll never respect or appreciate you properly. They’ll continue to want more and more for less and less and you’ll feel like a slave to them unless you make a stand. 

You’re a professional and that word should not be taken for granted. You are part of a noble profession and as such you should be well rewarded for the great things you do and the difference you make.

Here's an effective approach:

  1. Don't answer immediately. Tell the client they've asked a great question.
  2. Seek to understand the reasons behind the question… What is the client looking to achieve? Why is it important? What problem are they trying to fix? What’s this problem costing them (time, money, effort, opporuntities)?
  3. Explain that it requires investigation to ensure accuracy; explain the consequences of getting this wrong plus the benefits of getting it right.
  4. Tell them that you’ll investigate and come back to them… Later that day, the next day, in a week… 
  5. Inform them of the fee to investigate and provide an accurate answer, in writing. Say that you’ll happily talk through and discuss next steps to avoid those consequences and achieve those benefits. (£50, £300, more!)
  6. Ask if they’d like you to proceed on this basis.

‘But I charge a fixed fee… all inclusive’ you say!

It’s important to be clear in your ‘fixed price agreement’ that, whilst they can ask you questions from time to time, any additional work will require an extra work order.  

You might say, ‘well, I can answer the question there and then.’ But that’s because you’ve spent time and effort and possibly money educating yourself.  So you’re doing yourself a disservice by giving an answer straightaway. 

Remember, the client doesn't know you could answer quickly and easily. 

This isn't about ripping off clients.

It's about demonstrating that your knowledge and experience have taken a significant amount of your life to acquire. 

As technology improves, the time it takes to produce compliance work will decrease. 

Now is the time to shift to value pricing rather than time-based billing. People don't value your time; they value your expertise. As long as you can demonstrate the value to clients, they will happily pay for your value.

Learn more about value pricing principles in this free video. 

How to turn advice into paid advice - AVN Inspiring Accountants - Shane Lukas image
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 https://AccountingWeb.pages.ontraport.net/ProfitablePricing