Recent data from the Institute of Certified Bookkeepers Annual Survey Report revealed that less than 5 per cent of the industry had adopted value-based pricing as their preferred method for invoicing clients.
More than 50 per cent, the vast majority, still preferred to bill per hour, while there has been an uptake of a combination of fixed fee and hourly rate, with 30 per cent now utilising it as their preferred method.
Speaking to The Bookkeeper, All That Counts director, Lielette Calleja said there has been a reluctance in the industry because of myriad factors, including clients who prefer to be billed by the hour.
“Speaking with several bookkeepers at the Accounting Business Expo, I found that they were reluctant to shift to value-based pricing as their long-standing clients prefer they still bill by the hour. It’s a legacy issue and many just don’t want to have that confronting conversation with their clients,” said Ms Calleja.
“Shifting your business to a new pricing model takes effort and time which is something that many bookkeepers don’t have.
“The lack of education on how to price your services is a big component, and identifying the difference between value bill versus fixed bill might alleviate some concerns — more workshops on how to transition from hourly rate to value-based billing would certainly increase the percentage of bookkeepers taking up value-based billing as their preferred method.”
Laurus Bookkeeping director Cassandra Scott earlier told The Bookkeeper that the discussion over the preferred method of invoicing clients is irrelevant until bookkeepers learn to value their worth.
Ms Calleja believes the two are intertwined and has urged bookkeepers to take time to review their own business before implementing a new pricing structure.
“If you have staff, pay rent and other services all these need to be considered because at the end of the day even bookkeepers have a business to run,” said Ms Calleja.
“Once you have clarity around your own numbers you can setup a minimum pricing structure. This alone gives you value and you start to only accept those clients that recognise your value as a service product and not someone who only gets paid for the hours they work.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
With a focus on breaking news and exclusive analysis, Jotham keeps Accountants Daily readers up to date with company moves, tax updates and essential business and client strategy.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.