As a CPA, you work hard to provide valuable services to your clients. But have you ever stopped to consider if you're charging enough for your expertise?
Many CPA firms operate with average charge rates between $100 and $120
This may indicate their pricing is too low or they aren't creating enough value for their clients. Top-performing firms are achieving charge rates of $200+ and revenue per professional FTE over $250K. These firms have discovered the key to balancing the value they provide with the prices they charge, resulting in satisfied clients and a thriving business.
Low charge rates can lead to the majority of clients falling into the 'Insanity Zone'
This means that target clients are neglected, and opportunities are missed. The consequences of under-pricing your services can ripple through your firm, causing stress for both partners and team members, and making it difficult to attract and retain quality staff.
So how can you start the process of re-evaluating your pricing strategy? Begin by analyzing your current client base and identifying the value you provide to each segment. Consider the time and effort you invest in each client, and the unique services and expertise you bring to the table. This will help you determine if your pricing accurately reflects the value you deliver.
Next, research your competitors
Assess the going rate for comparable services in your market. By understanding the industry benchmarks, you can ensure your pricing is competitive while still providing a fair return for your expertise.
Don't be afraid to have open and honest conversations with your clients about your pricing
Transparency and communication are essential in building trust and nurturing long-term relationships. By addressing your pricing strategy and working to create more value for your clients, you can elevate your CPA firm and pave the way for sustainable growth and success.
Taking Action:
If you're interested in more insights like these, consider signing up for our Renewsletter: https://www.renewgroup.com/newsletter. Alternatively, if you'd like to discuss your CPA firm's specific needs, feel free to schedule a call with us: https://www.renewgroup.com/contact.
About the Author:
Colin Dunn, a Chartered Accountant with extensive experience in the accounting industry, is passionate about helping accountants transform their firms and lives. With over 25 years dedicated to creating content for to help CPAs improve their profitability, Colin shares valuable insights and strategies, such as lessons learned from tax season, to enable accountants to improve their firms, live a better life, and reduce stress. Colin believes that CPAs can create a better work-life balance by learning from past experiences and applying these insights to their firms, allowing them to spend more time with their families and pursuing hobbies and leisure interests.
About Renew Group:
Are you tired of being on the diet but not seeing results? Most consultants to the CPA Profession do lots of talking and deal in 'fluff'. But there's no accountability and no focus on RESULTS. At Renew, we start with your numbers. Our firms complete a Pareto for Profit analysis EVERY YEAR, set new targets to improve their profitability and then 'weigh in' regularly. We give you a roadmap to transform the profitability of your accounting firm by accessing our content, collaborating with other firms on a similar path and being held accountable by our coaching team and your peers.
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