Flex CPA Firms – “How Much Do You Charge For Remote Services?”

Defining the right price for remote services

A mistake many newly-minted Flex CPA firms get sucked into is in the matter of rates. In your head, it is simpler to just charge enough to cover your expenses plus a mark-up and call it a day. What separates a top performer is tailoring rates for each client individually.

Sounds like a lot of work, right? It’s worth the extra work.

Tailoring rates for each client case-by-case means you don’t leave any money on the table. For one client, they might be willing to spend 10x as much a month as another client FOR THE SAME WORK. The trick is uncovering the budget.

This is different than most Flex CPA firms who go into a new client meeting with the same number each time.

Here’s what happens if you go into a new client meeting with the same number: Say you charge $20 an hour for your work. Most of your clients will probably just say “Yes, that’s fine.” But then you’ll get some wild-cards who will try and get fancy. “How about $15 an hour, I know someone who does this exact work for $12 an hour so I’m paying more for you, what do you say?

At this point, you’re then sunk. You’re playing the “how low can you go” game with your time and money. This is not the game you want to be playing as now you’ve just been pushed up against the wall.

Unless you have some compelling value adds you’ve prepared for, more likely than not, most Flex CPA firms will stammer and say “Ok, $15 is fine.” You shake hands and out you go now losing $1000’s with that client this year.

Instead, you want to control the conversation. Now, this isn’t a negotiation post, that’s for another time. This is simply about uncovering how much your client is willing to pay. You might think it’s not fair one client pays more than another for the exact same service, but value is in the eyes of the buyer. If 10 people go into a Tesla dealership, they will most likely each pay 10 different prices for the exact same car.

When you can uncover the MAX (not minimum) a client will pay, you’ve managed to get a higher return for your time. You also get to take home more money (who doesn’t like that!).

Bryan Kreuzberger recommends using what he calls the “Bucket Technique” to uncover the numbers going on in your prospect’s mind. Let’s dive into how this technique can work for almost all flex CPA firms.

Here’s how it works:

1) Ask straightforward: “What is your budget?”

This can be a tough question to ask as it is somewhat combative. Average players will go right into talking about the hourly rate, but, as seen above, that can be negotiated down fairly easily. You want to first see what kind of number the prospect throws out to see where they stand.

This is called “Price Anchoring.” This is used in retail stores regularly, but essentially the first number thrown out usually is where the negotiating starts. You could have something great happen and a client says a number 2-10X what you charge, which would be great. Or they could say a number lower than your ideal number. The key is you want to hear a number.

You’ll then get 3 typical responses:

  • “We’re just researching.” (This means they are just wanting to hear the price and probably won’t sign on right now – BAD)
  • You’ll get a number (GOOD as you know where you stand, negotiating can start.)
  • “We are not sure, it depends.” (This is a GOOD answer as then you can go right into the Bucket Technique)

2) Utilize The Bucket Technique

Now, for any of the 3 responses above, you can go into the Bucket Technique. How it works is based on you throwing out numbers and the prospect coming back right away with what they thought.

What you need to do first is figure out how much a contract is worth to you. For regular accounting work, perhaps you wish to do a retainer per month. We will use this example.

You expect the work to take 50 hours a month. You’d like to charge about $20 per hour, that’s $1000. After that, you want to include higher numbers to make it appear that your number is actually a bargain. For the higher numbers, you could also have extra services included.

What you Say:

“Typically, clients fit into 1 of 3 buckets: $1,000 , $5,000 and $12,000 per month. How do those numbers speak to you?”

This last number is very high on purpose as it goes back to price anchoring (higher perceived value). Right away, after you mention your highest, outlandish number, they will usually tell you what their max budget is.

It’s magic.

Bryan doesn’t mention this, but I recommend for your lowest price, to add on a 10% buffer in case the prospect does what to negotiate. So, in this example, you could mention $1,100 as the baseline. If they weren’t expecting to pay that much, then say $1,000 is the lowest you could go and your prospect will leave thinking they got a great deal. If they accept, you made a 10% increase on your bottom line.

Pretty good.

This is a powerful technique all Flex CPA firms can use to uncover any and all budgets. Try it on your next prospect meeting and let us know how it goes!

Toolbox

The Ultimate Flex Toolbox For CPAs

Enter your email below to receive free access to our How-To-Guide On Locating A Flex Job, Formal Flex Work Proposal, and the Flex interview Q&A to expect.

You have Successfully Subscribed!