Want to know the biggest killer of any monthly accounting or CFO work?
After speaking with over 7,000 accountants, I’ve seen the area where these engagements go south and it all boils down to 1 word…
Resentment for the client starts to build when the accountant begins to realize the amount of work and effort that goes into the engagement that is eating away at the profits…
And even worse…
When they start to lose money.
So how do we fix this mess?
A couple of options I’ve seen successfully work for firm owners includes either:
1. Restructuring the Old Engagements… …and/or…
2. Sell in New Clients with the Correct Pricing & Scope
If you move forward with option 2, you are able to get an understanding of how the engagement is progressing in order to determine if you can go back to your old engagements and restructure the pricing/scope.
But how do you go about identifying the right pricing structure for these types of engagements?
I define the scope of accounting & CFO services into 4 different tiers:
Tier 1: Sub-account Management (AR, AP, Payroll, Inventory, Fixed Assets, Cash, etc.) Tier 2: Monthly Accounting (Bank Recs and the Month-End Close)
Tier 3: Controller Services (Complex Accounting, Multiple Entity Structure, Consolidations, Accrual Accounting, etc.) Tier 4: Chief Financial Officer (Forward-Looking statements, Monthly Financial Review Calls, Financial Dashboards, etc.) Unfortunately, when talking to most accountants, all 4 tiers are LUMPED together into 1 low price ranging from $100-$300/mo.
When the LOW & LUMPY priced clients start reaching out to those accountants, the resentment continues to build. And the longer you engage with questions and move out of scope, the expenses associated with the engagement continue to rise.
So I want to know…
What’s the bare minimum you could offer to get the client to pay xxx? …Or…
What are the 20% of activities that make up 80% of the value you offer to your clients?
#Accounting #accountants #CFO #engagement #clients #smallbusiness #entrepreneur
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