Show notes
In today's episode of Building the Premier Accounting Firm, Roger Knecht and Jonathan Stark discuss the pitfalls of hourly billing and the significant benefits of shifting to value-based pricing for accounting firms. Learn how to transform your business model, increase profitability, and build stronger client relationships by focusing on client outcomes rather than billable hours. This episode offers practical strategies for making this critical transition and leveraging your expertise effectively. In This Episode: 00:00 Introduction to the Podcast 01:21 The Problem with Hourly Billing 03:31 Discovering Value-Based Fees 06:25 Fixed vs. Value-Based Pricing 09:11 Understanding Value-Based Pricing 12:25 The 'Why Conversation' in Pricing 16:16 Transitioning to Value Pricing 20:54 Project-Based Value Pricing 29:19 Upfront vs. Commission-Based Pricing 37:07 Delivering Outcomes, Not Deliverables 38:49 Mindset Shift for Accounting Professionals 43:36 Transitioning to Fixed Pricing 48:31 Client's Perception of Value 53:46 Pricing Easy Work 55:19 Podcast Conclusion & Resources Key Takeaways: Identify how hourly billing negatively impacts firm profitability and motivation for efficiency. Understand the distinction between fixed pricing, deliverable-based pricing, and true value-based pricing. Implement a "why conversation" with clients to uncover the true value and urgency of their desired outcomes. Transition away from hourly billing by starting with project-based, value-priced offerings. Leverage client testimonials and past successes to inform future pricing and marketing strategies. Featured Quotes: "Hourly billing is causing all of these problems that we had been wrestling with." - Jonathan Stark "If you're not taking any risk, then you're not going to get any reward. You're not going to make any profits." - Jonathan Stark "If things feel hard and tedious, find the easy things that deliver a lot of value and set your prices based on the value of those things." - Roger Knecht Behind the Story: Jonathan Stark recounts his epiphany in 2005 when, as VP of a software firm, he discovered that hourly billing penalized efficiency and rewarded slowness. This realization prompted a personal quest for a better pricing model, leading him to discover value-based fees. His initial struggle to convince his boss highlighted the deeply ingrained nature of hourly billing, yet his eventual success led to doubling his income and significantly improving client relationships, experiences he now shares with other firm owners. Conclusion: Thank you for joining us for another episode of Building the Premier Accounting Firm with Roger Knecht. For more information on how you can establish your own accounting firm and take control of your time and income, call 435-344-2060 or schedule an appointment to connect with Roger's team here. Sponsors: Universal Accounting Center Helping accounting professionals confidently and competently offer quality accounting services to get paid what they are worth. Offers: Are you ready for a change, both personally and professionally? Then accept and participate in the Accountrepreneurs Challenge. This is a FREE opportunity to apply best practices and make this the best year yet in your career. 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It's here you can become a: Professional Bookkeeper, PB Professional Tax Preparer, PTP Profit & Growth Expert, PGE Next, join a group of like-minded professionals within the accounting community. Register to attend GrowCon and Stay up-to-date on current topics and trends and see what you can do to also give back, participating in relevant conversations as they relate to offering quality accounting services and building your bookkeeping, accounting & tax business. The Accounting & Bookkeeping Tips Facebook Group The Universal Accounting Fanpage Topical Newsletters: Universal Accounting Success The Universal Newsletter Lastly, get your Business Score to see what you can do to work ON your business and have the Premier Accounting Firm. Join over 70,000 business owners and get your score on the 8 Factors That Drive Your Company's Value. For Additional FREE Resources for accounting professionals check out this collection HERE! Be sure to join us for GrowCon, the LIVE event for accounting professionals to work ON their business. This is a conference you don't want to miss. Remember this, Accounting Success IS Universal. Listen to our next episode and be sure to subscribe. Also, let us know what you think of the podcast and please share any suggestions you may have. We look forward to your input: Podcast Feedback For more information on how you can apply these principles to start and build your accounting, bookkeeping & tax business please visit us at www.universalaccountingschool.com or call us at 8012653777