For many accounting practices the process of annual pricing reviews is time consuming, tedious, and creates anxiety – it puts your pricing under the spotlight.
However, it doesn't have to be this way.
It is important to remember that if you have provided your client with good quality service, then half the battle is already won. You have already earned their trust.
It is also important to review your pricing to your clients regularly:
- Ensure your pricing is market related
- Identify clients where price adjustments are necessary due to growth / contraction in their business
- Identify the "bottom 10%" in your portfolio of clients – those clients where their current price is not worth the effort (including emotional effort). These are the clients where a significant price increase is necessary: otherwise, you need to part company.
Many accounting practices are guilty of having an ineffective repricing / SLA re-negotiation process, leading to significant losses in revenue, as well as an erosion of the perception of value being added in the eyes of their clients. A couple of tips to ensure this doesn't happen to you:
You first need to have confirmed the drivers to your pricing e.g.
- Payroll = headcount
- Book keeping = transaction volume
- AFS / management accounts = Turnover
- Your client needs to know what these drivers are.
- You need to implement the best-fit tool(s) to ensure the pricing calculation is automated, accurate, and consistent, AND the communication of re-pricing (revised engagement documentation) is quick, professionally handled, carefully tracked and efficiently followed up.