7 Strategies to Boost Your Accounting Revenues
Sandi:Hi everyone it’s Sandi Smith Leyva and welcome to 7 Solid Strategies to Boost Your Accounting Revenues and Serve Your Clients Better. I’m here with Michelle Long and super excited to have you this morning on our complimentary call.
I’m hoping you opened your chat window and found the PowerPoint. For those interested in downloading the PowerPoint you can go to AccountingvCon.com/recording-2 and if you’ll open your chat window you’ll see the link and click directly on the link and go there and get your PowerPoint to follow along cause we know a lot of you like to do that.
We have some sponsors we want to honor that made this webinar possible today and made it complementary to you: Intuit, Funding Gates, Right Networks, Zen Payroll, Xero, Bill.com, ZoHo and Sage. Thank you so much to our Platinum sponsors. We have two Silver sponsors: TransferMate and T Sheets and they all do really cool things to help you improve your business. We have Bronze sponsor, Smart Vault.
We also have complimentary CPE for you today. If you’d like CPE you will need to qualify and be on the line for at least 50 minutes and answer 3 of 4 polling questions we have during the presentation.
We’re going to be talking about strategies for implementing the most profitable way to price. I know you love this topic about value pricing and so we’ll talk about that first. Michelle will be sharing with you the latest in virtual office technology and so she’ll have a lot on that. I’ll be sharing with you 2 new revenue streams you can consider adding to your business. These are pretty easy actually and you don’t have to have a lot of technology knowledge.
Then Michelle will wrap up with 3 ways to expand your accounting platform to serve clients more effectively. Then I’ll close it with one resource where you can find out more about how to implement the solutions we’re talking about today.
I’m so thrilled to be here with Michelle Long who is a legend in our profession. She’s been honored with all sorts of awards, Top 100 Champion, she’s also in the Top 100 Pro Advisors, she’s written a couple of books, author of QuickBooks Practice Set and also Successful QuickBooks Consulting. If you don’t have her books I encourage you to do that. She’s a hugely popular speaker and an international trainer for Intuit.
Michelle, how is your volume?
Michelle:Hey Sandi I’m here and it sounds okay. Thank you for that great introduction. You too are a legend. I’m thrilled to be partnering with Sandi and she’s the founder of Accountants Accelerator, a great program really helping accountants and bookkeepers to accelerate their practice. She’s a wonderful business coach and one of CPA Practice Advisors Top 25 Thought Leaders and that was a great accomplishment Sandi and a proud recognition there.
You’ve been writing articles for Intuit since 2001. I remember reading your blog posts since way back when. She’s also an author and has written Marketing Clarity and P3: Pricing, Packaging and Positioning. Sandi I think you and I are giving away your P3 at one of my practice sets today as well as some other stuff she’ll share later.
Sandi I’m going to turn it back to you for a little bit.
Sandi:I almost forgot guys we have 3 prizes for you. We’ll talk about it at the end; let me put it that way. The most profitable way to price is called Value Pricing and it’s really different. I know a lot of the accountants will actually price by the hour or maybe you have a fixed monthly fee for the client. Value pricing is completely different and it’s not based on cost.
It’s not based on the number of hours. You actually start with the client when you value price and look at what the client values in terms of the work you do for them and the price is figured accordingly. Value pricing is best implemented when there is a return on investment.
For example, if you can save the client $20,000 and it’s a quick fix because you know the technology and take you only 10 hours or so to get it in place, you don’t want to be charging $50 an hour for 10 hours which is $500 if you’re going to save the client $20,000. I think that’s a little lopsided in terms of the value proposition you give the client. So you can change what you are charging the client if you use value pricing.
Here’s our first polling question if you need CPE. What method do you use for pricing today? We’ve got that worded a bit weird and that’s my fault. What method do you use is what that should be, for pricing today. You can only pick one and so go ahead and pick the predominant one.
Now the link for the recording today there is a question on that. So if you do Recordings-2. We’ve got 88% voted already for the polling question and you can hear Michelle typing and she’s answering questions.
Michelle:I’m sorry. I was going to say something about the pricing. I think it’s really interesting to see what people are doing here right now. I think the trend is more and more people are trying to move to this but it seems like they need a little help with it. I think this is a very timely question and a great topic.
Sandi:We’ve got 91% and I think there’s been one webinar in 3 years where I got 100% cause when there is a huge number of people on, some people are on their I-Phones and IPads and others are on twice so they don’t lose the connection. So 93% voted…who else needs this polling question? If you need CPE I need you to choose one even though you don’t like the answers and choose the predominant one.
We went down to 92% how did that happen…
Michelle:94% is what I’m showing.
Sandi:94% okay and we’ll close that because that’s a pretty high percentage of people voted. More than half you are doing hourly and so more than half are charging hourly which is pretty predominant and actually packaged and fixed fee, about a third of you if you combine those are doing…no more, no about a third of you are doing packaged pricing and fixed fee which is similar. Wow that’s pretty cool, 8% of you are doing value pricing and so that’s cool and we have some very advanced people on the call today then.
Let’s keep going. One of the general big picture high level rules on pricing is in order to get a higher price from the client you really have to take on more responsibility and sometimes that means more risk.
Also another thing you can do is be outcome driving and ROI focused. So making sure that what you do will give a return on investment to the client and will leave the client in better shape, which a lot of times move beyond compliance work because a lot of people don’t value compliance work very often. What I mean by compliance work is tax return prep and straight bookkeeping without any kind of advisory added to it.
I know a lot of you have been doing this for so long that when you do bookkeeping you actually add value and don’t even realize you’re doing it. So you really need to make sure you distinguish yourself. For example, if you’re helping clients with balances or collecting receivables and here is how you can speed up your cash and advisory type consulting in addition to your bookkeeping you really need to be rewarded for that a bit higher.
Millie is asking can you explain the difference between value pricing and package pricing. Package pricing is based on cost and time and it is when you figure out how much time you need to cover expenses you have. So it’s expense driven and there is maybe a percent for profit that lands in there but it’s not based on what the client values.
Value pricing is based on what the client values. Now what you might do is you can hybrid them, in other words, you could maybe have a fairly high profit percentage which is still more package pricing because it’s still more originally based on cost before you move to value pricing 100%. Value pricing requires a very sophisticated proposal and selling cycle where you’re asking the client a million questions like what are your goals? How will it make you feel at the end of the project when it is done? What kind of benefits do you expect?
So the questions are different and you really need to understand what the client will be left with. You ask questions like; what if you don’t do this project what will it cost you? That’s a bit of the difference between those 2 pricing methods.
In my own business when we sell websites, we have a package at $997 and if you’ll indulge me for a minute I’ll explain it from my services and what I offer. For example, if we’re simply selling a website they already decided what marketing channel, they already decide they need a website which pretty much most people do and you don’t need a lot of analysis about that. But they already decided on the solution – you need a website.
If we were going to move that into more of a value price solution…another thing we have is we have a package that starts at $5K which gives them a diagnostic of their strengths and weaknesses and then it suggests the channels and then we implement from there. Now that is still a package but it’s a higher end package.
Then in terms of value pricing when we do that we actually guarantee increased revenue and, of course, you’ll pay more for that because there is a guarantee and I’m taking on more risk and I should always get more when I’m taking on more risk.
So that’s the difference between how you can move along your options in terms of what you’re offering. For example, if a client came to you and already selected QuickBooks Premier even though maybe they shouldn’t be on that package, if all they want you to do is implement that then that might be the basic stuff you’d do on an hourly basis.
Moving to the next level for you, you might say you shouldn’t be on Premier you should be on Enterprise and this is going to be better for you and here is how we can customize it. Then you’ll move into a higher level.
Then the higher level for you could very well be okay let me help you with your entire accounting department because I believe we can save you head count based on what you’re doing now. Do you see the difference? How it requires a little higher skill and you’re taking more risk and you’re also doing more for the client and so the scope and responsibility changes.
Here are some more examples. Straight posting you’re not going to get a lot of money for it if you’re just straight posting like a clerical person with no degree and just maybe an A/P or A/R clerk or that kind of thing. Now you can move into more bookkeeping type work where you’re doing so-called maybe advanced where if something is coded wrong or there is an exception you handle it right then and most of you are already at that level.
Then moving to a higher level would be more like reporting an analysis. Then you can get more than the average which the national average, by the way, is $64 per hour according to Intuit’s 2013 rate survey.
Then as you add work flow improvement, training that last for years then you can start charging those higher fees. So see the difference even though we’re keeping with the hourly model the value you’re offering the client is different.
So in summary or some additional tips, to get a higher price confidence is huge. I gave a speech at 7 this morning and I was saying some of you are in your own way as far as charging more because some of it is being confident enough to practice in front of a mirror that you can get the rate you deserve. Also some of you may need to communicate the value you provide the client because the client doesn’t even know what you do because if they did they wouldn’t need you. So sometimes you need to tell the client all the things make up how you got the skills you have.
Another thing is just get good at what you do. Get good at the technology; get efficient and effective in how you can help solve the client’s issues.
Now we’re serious about this. How many clients do you have on the new QBO, QuickBooks Online? The new one and so there is a classic one and a new one. Michelle?
Michelle:Yeah the new QBO is the one that has the left navigation bar in blue and so you know you have the new QuickBooks Online if it’s got the left navigation bar in blue. I think most people have converted to it by now but still not everyone. There are still a few older people on the old or the classic QuickBooks Online.
How many clients do you have on the new one with the left navigation bar? Answer that poll question for us and Sandi that was a great discussion on pricing. I know that people are always interested in hearing that. Go ahead and answer this polling question quickly so you can get CPE credit.
Sandi:We’ve got about 86%. I think all the answers, you can pick one and if you use Xero choose none. Some of you don’t use QBO and that’s okay…actually quite a few people.
Sandi:Yeah all my clients have upgraded in the last 2 weeks. Yeah no choice that’s right Mark there is no choice. They’re moving it because pretty soon there will be an update to some of the browsers and the old QBO won’t work anymore and that’s why they’re picking up the pace and getting everyone converted.
Sandi:We’ve got 91% voted and so if you need CPE quickly hit that button. You’re allowed one bathroom break because we have one question you don’t have to answer. But it’s only an hour so it’s pretty short.
Let’s see what everyone says. Wow yeah that’s surprising isn’t it?
Michelle:It is surprising that 48% of you have none and only 1 to 5 clients at 47%, wow! Do you know what Sandi? That’s a great opportunity I think. I think that presents a great opportunity for people to start moving to the cloud and having a virtual office. This is where it’s going to allow us to serve our clients better. We’re going to be able to work with our clients better where we have anywhere, anytime access.
Let’s say you’re on vacation on a ski trip or go to the lake for the weekend, no matter where you’re at and a client needs you, you can log in and access not just to the files but also your notes and things all the stuff you need. So some of the tools we’ll need when we’re trying to work virtually and go to a virtual office, you have to have some kind of client portal or file sharing service.
A lot of us have used things like Share or Lead File and those are called client portals and there is better security, especially if you’re doing taxes and things like that where we have sensitive financial information, you want to make sure you have something that has really good security with those types of things.
On the other hand, sometimes we just need a way to get the receipts from our clients. Maybe we trained our clients how to take a picture of the receipt and upload them once a week and we need to get access to that and so we may use a file sharing service like Drop Box or Box or Google Drive. There’s a number of them we can use.
But one thing we have to get away from is sending QuickBooks files back and forth to one another. That is so inefficient trying to worry about file compatibility, trying to get the file from the client to do the work and send it back and all that, we’re trying to log in remotely. All those things are wasted time, inefficiency, it hurts our productivity and it hurts our profitability and so we want to get away from that kind of stuff.
The other thing we need access to is our client notes. We need to be able to have access to our notes and there are things we can use like Ever Notes or Microsoft One Note and there are a number of different ones out there and most of these are cloud based where you can access them from a tablet or your phone.
Let’s say you’re out and about and talking to the client and make a couple of notes and you can save it on your phone and have access to it from anywhere using some of these things.
Also, we always have to-do lists, right? Every accountant and bookkeeper I know has to-do lists and we have to pay particular attention to deadlines and due dates. We need all these essential tools to help us manage our practice and work with our clients, but we need to do it in a virtual office to make it more efficient.