Trust us, you should charge more for accounting services. If you haven’t raised your rates in the last year and a half, you’re losing out on money, plain and simple. Many cringe at the idea, seeing it as “nickel and diming”, but the costs of doing business change every year, and with each month you are a more experienced professional! Chances are, as an enthusiastic accountant, you’ve probably taken many steps to improve yourself, your workflows, and your practice in the last year too!
The truth is, there’s absolutely no reason to fear charging more for your accounting services You’ could even have been adding value to your services, even if you didn’t realize it!
Examine what you charge- and why
First and foremost, if you’re still billing by hourly rate, you should think about totally changing your pricing model. That may sound daunting, but the fact is most of the business world has moved to a value-based price model, which has many advantages.
After thinking about your model, take a look at each client individually- do a quick rundown for each one. Such assessments are no-brainers for brand new clients, but how often have you re-assessed long-time clients?
If you already employ a value-based pricing model, it’s quite possible scope creep has occurred and you’re doing more for your client than you were initially. Even if you’re billing by the hour, if you’re providing more value than you were at first, it’s an obvious sign you should raise your hourly rate.
What value have you added?
Make a list of what you do for your client now and what you did for them initially. Spelling this out will help convince the client and motivate you.
For instance, you may have started out doing taxes and have added services like business relationship consulting, payroll, or accounts receivable management. If that’s your situation, you have a clear cut case- the client is simply getting more than they were in the beginning.
If you haven’t added such value, consider it. Accountants everywhere are expanding their practices to incorporate many more services. By doing so, they’re making themselves explicitly more valuable to clients. Niche services and additional accreditations are popular and savvy value-adds you may already be giving clients.
But aside from adding additional services, gaining experience is a value-adder in and of itself. You may have started out with a lower rate because you had little experience. If enough time has passed, that’s not the case anymore- you don’t need to woo clients with low prices when you can woo them with rock solid experience and success stories instead .
No matter your specific situation, I can guarantee you have added value over time- it’s just a matter of figuring out what! If you know more about your clients’ fiances than they do, charge more for accounting services.
Pass on cost of technology
Finally, make sure you’re not eating the cost of any technology that benefits your client. Any application you’re using from the App Store is really benefitting your client, you’re just the one operating it.
Think of it this way- the client should be paying for the App itself, and paying you to operate it for them. This is another tangible cost that you can mention when you inform your clients that you’re going to be raising your rates, which brings us to the final question- how exactly do you inform clients?
Just do it!
You need to take a two-pronged approach.
Make a public announcement via your newsletter or website informing all of your customers that your rates will be changing. Make sure it’s positive and be sure to include language that emphasizes how happy you are to have added so much value for your clients over a given time frame. This will let all clients know that it’s an across-the-board increase and that you’re not just targeting them.
Also reach out to clients individually- by email or by paper letter, depending on each business. Write them a personalized note thanking them for their patronage, but also detailing the exact value you have added over the course of your relationship. Focus on the positive- mention how their business has grown and relate how you have been an invaluable factor in this growth.
Overall, you’ll be surprised at how many clients have no problem with a rate increase. But don’t be afraid of losing a client- the fact is, if they aren’t willing to pay what your services are worth, you shouldn’t be working with them.
Worst case scenario- you part ways and are now free to find a client who will pay what you’re worth.
Let us know what your experience has been with raising rates or communicating rate changes to clients- what has worked and what would you have done differently?