Do you ever wonder what tax season would be like without billable hours? What if there was no minimum number of hours you had to work? It seems like a fairytale that couldn’t possibly come true.
Here’s a little secret, it’s not a fairytale. Accounting firms all over the world are doing it, and you can too.
Switch to value-based pricing
Another one of those terms you’ve heard floating around, but don’t really know where to start. It’s simple, price a project based on the value you are offering your client. As a firm, I’m sure you’ve raised your prices in the past. Sure, you might have lost a couple of clients, but I bet most stuck by your side. That’s because they find value in what you do for them. So instead of billing based on the 10 hours that went into their tax return, bill based on the value that you add. Now, that brings up a good point. Are clients willing to pay more for their 10 hour tax return? Probably not. I guarantee you, though, that they are willing to pay more for your expertise and advice. With that said, make sure you are using those three letters behind your name on work that is meaningful. It’s then that you can determine the true value of your services.
Add value – easier said than done, right? It all sounds great, but how will you miraculously come up with the extra time for you to spend on higher-impact projects? Outsource (stay tuned for our post on exactly how to do that). Let someone do the basics for you. I know, I know – it’s tough to let go of control. But all of these things (value-based pricing, outsourcing, staff retention) go hand-in-hand. You’ve got to loosen the reigns and let others do the things that you and your staff don’t need to be doing. This will not only save time during dreaded tax seasons, but it will open the door for technical growth, advisory services and client satisfaction.
Trust your team (no more budgets!!!)
As mentioned above, it’s tough to let go of control. If you know your staff is working 60 hours at a minimum and they are 90% billable, then you know the work is getting done. But is it getting done in the most efficient and effective fashion? No. Imagine a world without budgets: you tell your staff “complete these 5 tax returns, take as much time as you need on each, and go home after.” I bet you’re thinking, hahaha yea right. But really think about it. I bet your staff would become more efficient & effective, they would grow technically, and even more work would get done. Putting a budget on a tax return accomplishes three things: 1) staff rush to get through it to stay under budget (or even worse, staff fudge the numbers a bit...I mean they have to get to the 60 hour minimum, right?!) 2) the amount billed to your client (if you haven’t adopted Step #1 above) is skewed because the same budget has rolled over from year to year and 3) limited technical expertise is applied to the tax return because there’s no time left in the budget for it! So trust your team to get the work done. Trust their expertise and let them use it. You’ll be surprised at the outcome.
I know tax season is a few months away, but now’s the time to start thinking about making some changes. Give it a try and see what happens. If you fall on your face (which you won’t), you can always go back to the good ole’ billable hour and 60 hour minimum, but I promise you won’t want to.