How to Price Complex Tax Planning Work

tax value pricing Oct 24, 2021

 

Tax planning is a big opportunity to add significant value to our clients. Unfortunately, we often price it completely wrong and miss out on premium fees.

In my latest YouTube video (from a Live Webinar) I teach you strategies for getting bigger fees from tax planning. In this blog post, I’ll give you a snippet of the key principles from that video, but you can watch the whole video here: https://youtu.be/-3J-yiIjn08

 

The Key Principles

 

Never price tax planning work by the hour

 

We should absolutely NOT be pricing tax planning work based on how long the work takes, because that's completely irrelevant!

No client is ever interested in how many hours we spend doing something. The only thing that clients are interested in is the end result that we can get for them.

And the great thing about tax planning work is that we can get big results for clients.

 

Fully communicate the value and benefits of the tax planning

 

You need to think very...

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The 3 Big Pricing Mistakes Accountants are Making in 2021

Accountants struggle with pricing!

It’s not their fault… pricing is hard.

When I am helping members of the Value Pricing Academy there 3 things that keep coming up over and over again.  3 things we need to fix.

Let me share with you those 3 big mistakes in this blog post.  However, if you want the full analysis, check out this video on my YouTube channel.

 

 

 

Read on for the summary points or click here to watch the full video.

 

Mistake #1

 

You are still pricing too low!

2020 was a big shock to the economy with the emergence of COVID-19, lockdowns and travel restrictions.  Many of your clients have struggled.  Many business owners have had to shut their doors.

And things are still tough in 2021.  Arguably tougher, as businesses have to pay back the loans and tax deferrals.

When clients are struggling there is a natural tendency to want to help by keeping prices low.  The trouble is that’s not really...

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The 5 Critical Steps to Pricing New Clients

When meeting with potential clients, there are some best practices, structures and processes that you need to follow. I’m going to walk you through 5 of those critical steps…

 

You can watch the video here.

 

Research

 

The purpose of the initial meeting with a client is to understand whether or not you are a good fit for each other. A lot of that information you will uncover during the meeting with your fact-finding process.

But before the meeting, you should visit their website, but also their social channels to find out something a little more personal about them, perhaps something you have in common. This could be a great starting point to create some rapport in the meeting.

Do a Google search on them and their business. It may be they’ve been in a news article because they have been avoiding taxes. It would be useful to know that before you commit your valuable time to them.

Just do 10-15 minutes of research and make some notes of potential...

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How to Price Business Start-Up

value pricing Nov 16, 2020

When I started my own accounting firm in 1996, for the first 2 or 3 years I seemed to attract lots of business start-ups.

I spent a lot of time helping them, giving advice, telling them what they needed to do for tax purposes, how to keep their books in order – they had tons of questions. 

But I had no idea how to price.

I avoided the pricing conversation. I just answered all their questions and kept my fingers crossed that at the end of the year I would get the end of year accounts and pray that I could charge enough to make some money.

Unfortunately, what I often found was that some of those business start-ups didn’t actually make it through the first year. All that time I spent helping them for free was wasted. The businesses that did make it past that first year often struggled to pay my fees.

 

By the way, you can watch the video here if you prefer...

 

Business Start-Ups are Tough

 

For a while, I thought I should stop focusing on business...

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4 Ways to Price Clean-Up Work

value pricing Nov 09, 2020

Clean-up work is one of those services that can feel quite tricky to price.

When a client comes to you with their books and records in a complete mess and they ask you to fix them and give a price – the difficulty is the huge amount of uncertainty.  

You have no idea how much work is going to be involved. You can try asking the client to get a better idea, but sometimes they aren’t any more clued up on their books!

You might ask when they last reconciled their bank account and they tell you it was a few weeks ago, but in reality, it hasn’t been reconciled properly for 6 years.

The clients don’t know the answers and you won’t know the true scope of the work until you actually start.

It’s challenging – so how do you price that?

 

By the way, you can watch the video here if you prefer...

 

Option 1 – Charge an Hourly Rate

 

This is what most accountants and bookkeepers do, but it’s the worst possible way of...

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How to Price During COVID-19 and Tough Times

During the time of writing this blog, we are in a global pandemic causing a lot of issues for a lot of businesses. Of course, even outside of COVID19, we often go through tough times with recessions and such.

A question I get asked so often, and even more so with the current situation, is: 

“How to you change your approach to pricing when times are tough?”

It’s a difficult and delicate matter, but here are different ways you can think about your pricing during these hard times…

 

By the way, you can watch the video here if you prefer...

 

Should I reduce my prices?

 

Absolutely not!

You have to stay in business. If you don’t stay in business, you can’t help your clients! You have to stay commercial.

 

Not everyone is struggling

 

Even though times are tough, not everyone will be struggling in the same way.

Some businesses even thrive in these times of crisis.

There is no need to discount your prices for businesses...

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How to Become More Confident with Pricing

One of the things that holds us back in pricing is a lack of confidence.

Accountants and bookkeepers are terrified of hearing those dreaded words ‘that’s too expensive’. We have a fear of rejection, and so we keep our prices low in the hopes that the client will say yes.

Here’s the problem…

When your prices are too low you end up having to work much harder and much longer hours just to make ends meet.

You need to change your mindset. You need more confidence. Here are 5 things you can do to build your confidence in pricing…

 

(You can watch the video here).

 

#1 - Build Your Knowledge

 

Confidence comes from knowledge.

You need to become obsessed with gaining knowledge on how to value price.

If you don’t understand value pricing – the systems, the techniques, the price psychology – then you will always be a little apprehensive when giving your price.

It’s the same with anything in life: the more we learn...

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Why You Should Create Packages

value pricing Jul 21, 2020

If you ever give a single price to a client, you can guarantee that price is wrong.

Everyone values things differently – it’s one of the difficulties we have to deal with when value pricing.

You have no idea how much any client is going to value the work that you do, so it’s your job to get as close as possible to what economists would call the buyer’s reservation price – more commonly referred to as the maximum willingness to pay.

 

You can watch the video here.

 

Why You Should Charge As High As You Can

 

The majority of the accounting profession are undercharging massively because of the fear of rejection and losing clients.

When you undercharge, you will find you end up having to cut corners, skip out on valuable extras and not give the client the results they really want.

It’s not intentional, but because you are so busy, you end up rushing jobs, making small mistakes or missing out on potential opportunities for the client.

...

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The Concept of Optimal Pricing

value pricing May 05, 2020

Are you working crazy long hours and making very little money?

You’re not alone.

The root cause of this issue is that accounting professionals are pricing too low because we are terrified of being rejected.

We hate it when someone says ‘no’ or ‘that’s too expensive’.

So, we make the mistake of giving a price that is low because we want the client to say ‘yes’. But when they do say ‘yes’ to your first price, it means you have priced too low, and left money on the table.

I’m going to share with you the concept of optimal pricing - it’s a better way of thinking about how to price and it’s the best approach to make sure you get the maximum amount of money for every job.

 

You can watch the video here.

 

Optimal Pricing Works Like This…

 

The price for anything falls somewhere between your costs and the value to the customer.

But it’s not quite as simple as that because you want to...

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Moving Straight to Value Pricing Will Lead to Failure

value pricing Apr 14, 2020

Everybody in the profession is talking about moving from hourly rates to value pricing.

But people who are new to this journey, particularly people pricing services like bookkeeping and clean up work, all make a big mistake.

They try to move straight to value pricing in one big jump, and they get it all wrong.

 

Watch the video version here:

 

I have seen people posting things like this on social media so often…

“I had a go at value pricing some clean up work and it went so horribly wrong, I just went back to pricing based on the hour.”

It makes me so sad.

 

The problem is, for compliance services like bookkeeping, moving all the way from hourly rates to value pricing is just too big of a jump to get right.

It’s too much to achieve in one go.

Value pricing compliance services conceptually isn’t easy.

Value is subjective. You can’t touch it or feel it, you can’t easily put a number on it. What is the value of bookkeeping...

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