I want to share with you 7 practical tips for how you might price bookkeeping services…
If you prefer you can watch the video here.
Tip 1 - Don’t Move Straight to Value Pricing
This is a big mistake I see often.
If you try to move from hourly billing to value pricing in one quick jump you are going to fail without a doubt.
Value pricing is a difficult concept to grasp in the first place. Trying to apply it to a complex compliance service like bookkeeping is going to make it even harder.
The move to value pricing is going to be a journey, not a quick fix, so be patient.
Tip 2 - Remember It Is Valuable
You need to recognise that bookkeeping is valuable.
The perception is often that it is a low value service, it’s just data entry. But bookkeeping can be so much more complex than that.
I know that my bookkeeper is quite expensive, but I don’t mind paying that price because I know I am getting great service. It gives me peace of mind knowing that the bookkeeping is always taken care of to a high standard.
Tip 3 - Make It More Valuable
Add value to your service.
What sort of things are important to the client? What would make their life easier, or better?
It may be that you meet with them once every month, or quarter to give them some business advice, help them interpret the numbers, and help them understand what is happening in their business and how they can improve it.
Make your service even more valuable and you can charge a higher price.
Tip 4 - Give the Client Options with Menu Pricing
People value things differently. It’s difficult to predict what each person is going to value, and you will never know how much they are willing to pay.
If you only give them one option, it may not be the right one for them - you may be leaving money on the table. But if you give them some choices, they are far more likely to buy your service.
Create a Bronze, Silver and Gold version of your bookkeeping service and allow the client to choose based on their perception of value.
You will likely find that most people will choose to pay you more by going for the middle option.
Tip 5 - Create a Brochure
Communicating the value of your service is crucial. The language you use can be the difference between winning the client and not.
To remember the structure of your value conversation and the language you want to use, I recommend creating a professional looking brochure.
This acts as your agenda in the meeting, and it can help to structure your conversation in the right way so that you can efficiently build up the value of your service so the client wants to buy from you.
Tip 6 - Never Quote an Hourly Rate
Hourly billing is crazy. Customers hate it because of the uncertainty.
They never know what the price is going to be.
No one values an hour of your time. They don’t want to buy your time - they want to buy the results. They see value in the results, so price based on that.
We have to move to value pricing. It’s so much more effective.
Tip 7 - How to Give a Fixed Price
The key here is to think about scope.
We need to identify what things impact on how much work is involved.
The primary scope factor for bookkeeping might be how many transactions there are a month.
There will be other things that affect how much work is involved as well like how many bank accounts they have, what industry they are in or whether they have overseas transactions.
From there you can develop a system where you ask the client these scope questions and based on their answers you can calculate a fixed price.
Those are my 7 top tips for pricing bookkeeping services.
If you're still struggling I did another blog called How To Price Bookkeeping In 5 Easy Steps. It might give you more ideas.
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Wishing you every success on your pricing journey.
Chartered Accountant, Public Speaker and author of Amazon No.1 Best Seller, ‘Effective Pricing for Accountants’
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