“There are a huge number of people doing their accounts themselves,” said digital practice owner Elaine Clark. That’s why she’s now asking prospective clients to say how much they want to pay.
Never one to shy away from market disruption, Clark has launched a ‘name your price’ service in response to a debate on AccountingWEB over whether accountants are charging too much.
Rather than setting out a fee structure for clients, the service, offered in addition to the firm’s low fixed fee pricing, invites prospective clients to suggest how much they want to pay and to outline the services they require.
With cloud accounting spawning more sophisticated clients, Clark concluded: “If clients are becoming more informed and more knowledgeable and able to do the accounting that they need to do, then how much support do they need from an accountant?”
Pitched at microbusinesses that may not have the budget to spend on expensive accountancy fees, Clark said the people who use the service are those who may need an accountant to get them started or into a routine, and then only require an accountant’s service “from time to time”.
According to Clark, cloud accounting has demystified what accountants do, prompting more people to question their accountancy fees: “People are much more aware and familiar with what accountants do, so it gives them the opportunity to get value for money.
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“It puts the value where it should be: in the skills and knowledge of the professional they input from; the rest of it they can do themselves,” she said.
Prospective clients have to be realistic, which opens the door for a bit of negotiation. “That’s an opportunity for us to sell them the service that they do need.”
The future of the traditional way of doing things
This begs the question: can traditional practice pricing models survive? Clark doesn’t think so. “I don’t think there is a traditional firm in the country that has not seen some squeeze on their fees right now,” she said.
She equates the situation to that of estate agents, where low-cost online players such as Doorstep and Purple Bricks have undercut the commissions and margins of the high street agents.
“I think there’s a view that we’re not a business at all and of course, we charge these fees in the same ways that lawyers have charged those fees in the past.
“What we have to look to is how much the market has changed over the last 10 years, particularly with the introduction of iPhones and mobiles. It’s blown apart all the traditional business models.”
The numerous pricing conversations on AccountingWEB compound the idea that fees are squeezed at the moment. In a recent Any Answers thread started by a sole practitioner who needed advice on pricing, AccountingWEB member Matrix commented that fees were stagnating among startup clients: “As a result, these are no longer my ideal client and I have stopped targeting them on my website.”
What do you think? Has the current climate forced you to rethink your fees? Are you ready for a professional marketplace where clients are empowered to name their fees?
About Richard Hattersley
Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.