If you work in the finance and accountancy field, then you might have come across the concept of a fixed fee accountant before. You might have even attempted to put pricing in place to become a fixed fee accountants and to provide simplified service to your clients. No matter what stage your with the pricing model, you will undoubtedly have some questions about what being a fixed fee accountant entails and your clients will also likely have questions about what it means for them.
So, her are the answers to some of your burning questions about what it means to be a fixed fee accountant and how it will work for your clients.
What is a fixed pricing model?
Fixed fee accountants work with a set of amounts for different services, which means every accountant will pay the same for accountancy of bookkeeping services. The price of different services is determined by a number of factors, including the perceived value that you determine they have.
Fixed fee accountants rather than billing an hourly rate will charge their clients based on the service they provide, this is a model that is well suited to new technological developments which mean many tasks are much quicker to perform than they were in the past.
What are the advantages?
Hourly billing is quickly becoming outdated due to the rise of new cloud based applications that allow financial dated to be generated almost in real-time which allows professional accountancy firms to work much faster. Old hourly billing methods were based on the amount of time you spent on the work, rather than the quality of the work and its value. Many clients prefer fixed fee accountants because it means they know what to expect and they won’t be surprised by the cost of service. The fixed fee accountant pricing model allows for professionals to have a more strategic approach to client work as opposed to when hourly rates are imposed and clients are worrying about the cost of meetings. Getting rid of the hourly model allows for a much better relationship with clients and much better business results.
Set pricing models provide many benefits to their clients, including improved services, better value and a better relationship. Professionals will find that they are able to provide improved services and won’t have the pressure of billable hours hanging over them.
Is it different to value-based pricing?
Value based pricing sets the cost of services based on how valuable they are perceived to be for clients. It’s very similar but is often considered to be less easily scaled. It can be used in conjunction with set service costs.
When should it be implemented?
Ideally, it should be implemented after checking in with clients to evaluate whether or not it will add value. A thorough understanding of client pain points can help you to alleviate any potential concerns around changing pricing models. You should also seek to get advice or input from your valued clients and customers to ensure they feel like trust is being built with them and that you are showing you value their business.
How to make the transition?
The simplest way to make the transition is to do it on a case-by-case basis, maintaining awareness that certain clients will have different needs and that it may be a slower process for some compared to others. Changing pricing models can involve a learning curve and will take time and patience, make sure you spend the time communicating clearly with your clients about it as this will help to prevent any problems arising.