Bookkeepers and accountants are moving away from hourly billing due to one primary problem: hourly billing essentially puts a wall between us and our clients. Consider a these key issues:
• Rather than turn to us, clients may try to figure it out themselves because they are worried about how much we will charge them. This isn’t right! We don’t want our clients reluctant or afraid to call us.
• Clients are concerned with keeping fees down, so they are reluctant to ask for additional services, such as budgeting, cash flow and forecasting – areas in which we could really help.
• We are not selling our time. Whether it is monthly bookkeeping, payroll, taxes or something else, we are selling our knowledge, skills and experience to get the job done for the client. Every year, we have more experience and expertise – which, of course, is extremely valuable. Every year, with advancements in software and digital data delivery, it takes less time to complete the tasks but the same amount of expertise to interpret the data and use it to earn more profits.
With value billing, we charge our client a fixed fee based on the value of the services provided. Accountants and bookkeepers can operate more efficiently using technology like QuickBooks. For example, we can set up bank and credit card accounts to automatically download transactions every night. Combined with rules we can create, we can automate the majority of the data entry.
As a result, instead of spending 10 hours per month to get the work completed, it may now only take 2-3 hours per month. Plus, Cloud services such as DropBox helps us save even more time and improve efficiency because we no longer waste time sending data files back and forth. Should we earn less money when we're still providing the same end result for the client?