Accountants Round Up

"All Accountants Charge For Their Time. NOT!"

By Ed Kless: If this were not so funny it would be pathetic. Actually, as Willie Wonka says, “Strike that, reverse it.”

Recently, we at VeraSage became aware of an accounting firm’s Web page that had a series of questions and answers regarding fees. Among the litany is this gem:

How do accountants charge?
All Accountants charge by time. The longer it takes to prepare your Return the dearer it’s going to be. Some businesses sell hamburgers. Real Estate Agents get paid commissions, and ACCOUNTANTS SELL TIME. The more presentably you submit your accounts, the quicker we get it done, and the more cost effective it is. We only have 8.0 hours per day to sell and we would not be in business if we gave our product away.

Read complete post All Accountants Charge For Their Time. NOT!
Source: VeraSage, 6 February 2009. 2006 © Verasage Institute. All rights reserved.

"How To Value Price: Just Do It!"

By Ron Baker: I’m finding it incredibly difficult to keep up with all the chatter in blog on value pricing in the accounting, legal, advertising and IT worlds.

Ed and I were discussing this incredible wave of interest in value pricing yesterday. It seems to be a confluence of events: a teetering economy, continuous challenge from customers looking to cut costs, firms trying to maintain margins, challenges in attracting and holding on to talented knowledge workers who don’t want to define themselves by how many hours they bill, etc.

Read complete post How To Value Price: Just Do It!
Source: VeraSage, 16 January 2009. 2006 © Verasage Institute. All rights reserved.

"The Firm of the Future"

By Ron Baker: The reigning paradigm of how to manage a CPA firm hasn’t changed for more than a half-century: Revenue = People Power x Efficiency x Hourly Rate

Unfortunately, this model has several limitations. First, it overemphasizes every marginal dollar of revenue—and hence any client—as beneficial. But low-value clients consume a disproportionate share of a firm’s precious capacity, while keeping it from reserving capacity for its most valuable clients.

Read complete article The Firm of the Future
Source: Journal of Accountancy, November 2008. Copyright © 2008 American Institute of Certified Public Accountants. All rights reserved.

"Clear, Smart Pricing"

By Ron Baker: As a frequent flyer, nothing is more annoying than having to stand in long security lines, watching the TSA [Thousands Standing Around] pat down little old ladies in wheelchairs.

Fortunately, Dan Morris turned me on to Clear, a Silicon Valley company that enables you to move to the front of the security line in airports where they are present. San Jose airport got Clear long before San Francisco, but once it came to SFO, I signed up. 

Read complete post Clear, Smart Pricing
Source: VeraSage, 17 October 2008. 2006 © Verasage Institute. All rights reserved.

"One Criminal Attorney’s Approach to Value Pricing"

By Ron Baker: I received the following email from James Franks, a criminal defense attorney, in response to my series of articles in The Complete Lawyer:

I just read your article regarding who is in charge of value in your firm. The article is brilliant. I know because I’ve been saying these things to my fellow attorneys for years. I am senior in a two person firm.

Read complete post One Criminal Attorney's Approach to Value Pricing
Source: VeraSage, 22 July 2008. 2006 © Verasage Institute. All rights reserved.

"Sellers Change Pricing Strategies, Not Buyers"

By Ron Baker: The history of commerce teaches us that almost every single innovative pricing change has been done by sellers, not buyers. This is because most pricing strategies are often changes in business models—that is, how companies monetize the value they create.

Yet, across the professional knowledge sector we hear endlessly how firms and their customers are going to have to jointly get rid of the billable hour. This is nonsense. 

Read complete article Sellers Change Pricing Strategies, Not Buyers
Source: VeraSage, 2 May 2008. 2006 © Verasage Institute.

"Nickel 'n Diming"

By Bill Kennedy: Would you like an iron-clad, guaranteed way of annoying your clients and ensuring they think twice before calling you? A friend was venting this week about the bills he was getting from the firm supporting his accounting system.

Every time I call them, they bill me for fifteen minutes.

Read complete post Nickel 'n Diming
Source: Energized Accounting, 11 May 2008.

"The Origins of $.99 Pricing"

By Ron Baker:  Matt Homann over at the [non]billable hour has a post citing a study on the psychology of odd-numbered pricing.  Matt then suggests you might want to set your hourly rate at $297 per hour rather than $300.

As you can imagine, there are several flaws with this.  Here’s the comment I left on Matt’s post:

Read complete article The Origins of $.99 Pricing
Source: VeraSage Institute, 24 April 2008. 2006 © Verasage Institute. All rights reserved.

"The Airplane Metaphor"

By Ron Baker: I’ve been having an e-mail discussion with Bob Harper, of More Software in the UK, during this past week over an article he wrote about the airplane analogy we use here at VeraSage. 

Officially, it’s known as the Adaptive Capacity Model, which I used originally in The Firm of the Future to illustrate Baker’s Law:  Bad customers drive out good customers.

Read complete post The Airplane Metaphor
Source: VeraSage, 24 February 2008. 2006 © Verasage Institute. All rights reserved.

"He Who Says “A” Must Say “B”"

By Ron Baker: I don’t know Tom Kane, but thanks to Stephanie West Allen for sending me a recent Blog post of his, ”Has Your Firm Tamed That Damn Billable Hour Yet?”

It’s utterly amazing to me how someone, on the one hand, can say they support Value Pricing, and then on the other insist that timesheets are absolutely necessary.  He’s arguing they are necessary from a cost accounting perspective, which is nonsense.

Read complete post He Who Says "A" Must Say "B"
Source: VeraSage, 17 February 2008. 2006 © Verasage Institute. All rights reserved.