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There’s good news: Most SMBs consider their accounting firms trusted partners. As your firm grows and you incorporate more technical solutions to increase accuracy and efficiency, you’ll also need to strategically evolve your pricing structure to meet the needs of your clients and firm.
There are many ways to price AP and AR services, but some models offer more opportunity to scale.
Take a look at these 3 examples.
Model 1—Hourly billing
In this model, firms set a rate and charge clients based on time spent on engagements. This system is familiar and easy to calculate; however, it prioritizes time spent over efficiency. Firms that use AP and AR automation to increase efficiency may end up losing money with this model.
Model 2—Flat rates and fixed fees
Firm set a fixed price for services across all clients. This model incentivizes efficiency since clients pay the same no matter how long a project takes. The sooner a project is completed the more profit a firm can realize. Plus, clients like this model because it means they know precisely how much their bill will cost.
Model 3—Value pricing
Value pricing is set based on the client's perceived service value. It offers a regular, recurring price but may change based on the client. This method requires a more extensive discovery process; however, it strategically centers on client needs, accommodates advisory focused service, and measures results instead of time spent.
The most important thing when pricing services is to align prices to the value you provide.
Strategically determine your pricing structure based on your location, clients, and other factors. Many firms build a customized hybrid structure incorporating aspects of each model listed here.
Learn more about pricing accounting services—including AP, AR, spend, and expense management here.
