As accounting professionals, from bookkeepers to accountants and CPAs, your training will lead you to go straight to the numbers when you want to introduce a new service to your clients.
But what if creating a profitable revenue stream requires you to go beyond the numbers?
Price definitely plays a part in attracting and keeping clients. It is true regardless of the industry. Let’s take retail for example. Walmart is the low-price competitor and markets themselves that way (their slogan is “Save Money. Live Better”). They need a large volume of transactions to be profitable. Nordstrom, on the other hand, sells higher priced items and does not compete on price. Nordstrom is known for its service rather than low prices. Anyone who shops at either Walmart or Nordstrom understands the different value they will receive by entering each store and are happy to pay the stated price in either circumstance.
At Finagraph, we strive to make cash flow forecasting and management a fundamental service for accounting professionals to provide their business clients. So how do you price these services (called ‘cash flow advisory’ services) either as part of a package or as a standalone service?
Start by going beyond the price you charge, and lead with the value you add.
Consider the following when developing your price for cash flow advisory services:
- Who are your clients? Develop a client profile. Knowing who you are currently serving and who you want to be serving is important. The types of clients you provide accounting, tax and consulting services to (i.e., size, industry) will impact the nature of your pricing. It may sound counter intuitive, however, the narrower your focus, the higher prices you can command. Finding your niche will also help set you apart from the competition.
- What result do your services provide? What need do you meet or problem do you solve? When you are looking to price your services, keep in mind that preparing a tax return and bookkeeping/accounting services are a commodity these days. Providing your clients peace of mind that their finances are in order and equipping them to make decisions based on their financial information commands a much different price point (value).
- What is your brand promise? Most accounting professionals go into business without thinking about what their clients can expect from their services. They just do the work and hope clients will stay with them for a long time. Are you known to go “the extra mile” for your clients? Or are you known for being unavailable during your busy seasons? Clarity about your brand promise allows you to have deeper and more meaningful conversations with clients that open the door to providing them more services.
- What culture are you creating for your business? Are you more like Walmart or Nordstrom? Or maybe something in between? The accounting industry is changing. Technology is making basic data entry tasks more automated. The line between bookkeeping and accounting services is being blurred. More bookkeepers are providing more than just data entry. The search for talent can come down to the culture of your business. Jack Welch, former CEO of General Electric said, “The three most important things to measure in a business are customer satisfaction, employee satisfaction and cash flow”. Your customers and employees stay because of culture. Design a culture that attracts customers that are willing and able to pay for the value you provide and employees that enjoy being able to delight your customers consistently.
Earlier we used Walmart and Nordstrom as a pricing example. How about we give you an example a little closer to home? Another professional service.
Let’s say you want to protect your proprietary business process. Which attorney would your hire to research and register your intellectual property? Would you hire an attorney that provides everything from criminal litigation and business contract reviews to intellectual property to handle this task? Probably not. You would hire an individual attorney or a firm that specializes in intellectual property. Why? Because that person or firm has the depth of experience and expertise to navigate the challenges of the intellectual property landscape. That narrow focus of service commands a higher price because of the peace of mind and guidance they provided (value).
Your expertise and experience to provide cash flow advisory services is no different. And your price should be a reflection of that value.
Getting insights around pricing and being able to deliver a cash flow forecast in minutes are just some of the benefits of being a CashFlowTool Accountant Partner. Schedule a demo with our team to find out more.