Get ready: Employees, customers, prospects and, yes, even management will all be learning new ways of doing business under the "new firm" model. Why? Hear me out.

Gone are the days of billing a fee for a tax return or financial statement. Now, it's a collaborative partnership where a trusted advisor leads a small-business chief executive through accounting, tax and consulting services. Prospects no longer only come via referral from your town or city; they come to you through social channels as well - which means you may be working with new customers from around the world. This is a different way of doing business. That's why it deserves a new way of being sold, value-positioned and priced.

Why are pricing and value creation so important in today's new world? Why is billing by the hour no longer good enough? Here's my straight-from-the-hip answer: because the world has changed and customer expectations have changed as well. Customers have changed. Tools are constantly evolving and there is a demand for more frequent customer communication. More frequent interaction requires an adjustment to your pricing model - or you might find yourself billing your client for a tweet.

Using the cloud and social media fundamentally changes the relationship and communication expectations with your client and within your firm. This is one of the key factors of disruption for many accounting firms. It's not the software itself that is disruptive - most cloud software is just like any on-premise software.

The key difference, however, is that everyone can see the latest version of the software and data in real-time.

It's the ability to communicate and deliver insight in real time that creates a new value proposition. These insights have more value than the two minutes it took you to update an online banking transaction - but if you don't change your pricing model, how is the exponential value of the insight and transparency going to be billed and captured? It won't, unless you intentionally price and communicate the value upfront. This is what fundamentally changes when you move to a cloud firm, and most accountants don't truly understand how disruptive it is for those still using the traditional business model.

In the cloud, you can't do the work and then bill time as normal; you'll need more clients because the technology will decrease your labor needs dramatically.



The hardest part of changing to a value-pricing firm is you - and transforming the way you think about time, delivering service and value. You must also be able to understand and articulate your "true value" to your customer, and it's not in a bank reconciliation. Time doesn't matter, whether you track it or not. Time has no bearing on the engagement with your new social and cloud-based client. Whether it takes two minutes or two hours is not relevant to the value you are offering. Insight can't be measured in a time increment and therefore can't be sold as one.

Think about this: I guarantee your client might respond, "I can do that in five minutes myself." Sure they can. But can they offer the additional experience and insight that you do? I'm guessing not. What should your response be in that situation? Tell them this: "I don't sell my time. I sell my value to you as a small-business owner."

The old way of firm communication doesn't meet the needs of today's customer, or even today's accounting professional. The firm model is broken and requires a rebuild. It's about collaboration - with your clients, employees, vendors and solution providers. All social, cloud and value-pricing tools enhance connections.

The value-pricing model is going to encourage communication with your clients. They won't be afraid to call because the "clock" will start; instead, they will have agreed to a fixed price upfront. When they call more, you can respond more proactively. It's this type of accountant who should be priced differently, because being proactive is of higher value to the customer. These additional services can and should be sold upfront as part of the engagement. Most accountants will be pleasantly surprised at how many customers actually want and are willing to pay more for this kind of access.

Communication has always been one of the biggest challenges traditional firms faced in the pre-cloud and pre-social world. Now add the fast turnaround that today's clients and the Internet demand of firms. Communication and transparency are increasingly critical in today's business environment, and most firms are failing miserably.

A new need for services always creates a new opportunity for pricing. How do you bill for two minutes when you reply to a text from a client? Do you bill for 15 minutes instead? You could, but I don't think your client would appreciate it. Time measurement, after all, doesn't adequately reflect the value to your customer's business.

We know that it's the real-time that creates the chaos within the firm. This chaos is not necessarily a bad thing, but it becomes essential for firm management to rethink 100 percent of its processes for delivering financial statements and consulting engagements. And yes, that includes pricing.

Jody Padar, CPA, MST, is CEO and principal of New Vision CPA Group, as well as an adjunct professor at Oakton Community College. She speaks nationally on various technologies and taxation.

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