All you need to know about accounting services pricing

As a bookkeeper or accountant, you may assist with a wide range of financial activities for businesses regardless of their size. Your role is a crucial part of any company, as many financial tasks can feel overwhelming for business owners to manage on their own.

If you run a firm or offer financial services to clients, formulating your pricing strategy is essential. With fair and competitive pricing, you not only enhance your clients’ businesses but also strengthen your own.

This guide will help you grasp everything you need to know about pricing accounting services as a bookkeeper or accountant, saving you the stress of setting incorrect rates.

What are the factors influencing the pricing of accounting services?

A lot of aspects affect the way you decide pricing for your accounting services. Listed below are a few things you should keep in mind before fixing the price for your accounting services.

• Keep in mind your expertise and skills: If you are a beginner, you should be charging on that line until you get a few clients. Then, as your skills and certifications go up, you can charge accordingly. Most experienced accountants and bookkeepers charge premium pricing for their accounting services.
• Know the geography and industry standards: These affect the way you plan your pricing. Do research on what other accountants and bookkeepers charge. Financial services provided in urban areas might cost higher than the ones provided in rural areas. This will give you an idea of how to derive your pricing. If you think you hold more skills than the market, you can have your pricing higher too.
• Understand the business size and requirements: This gives you a clear idea of how to plan your pricing. For instance, a large business might need complex accounting activities compared to smaller ones, and hence, the pricing would also be higher.
• Discuss and decide on the services offered: Not all services demand the same pricing. A basic accounting activity can be charged lesser than the complex ones.
• Consider your budget: Include all the charges, such as your software subscriptions, office supplies, and other company expenses, to make sure that the price of the platform fits your budget in a way that lets you cover the expense while staying profitable.

What are pricing models and strategies for accounting services?

As a bookkeeper or an accountant, you might be in charge of multiple financial activities for a business. Deciding on how to charge your clients is essential, as it will determine the suitable way to get paid. Common pricing models for accounting services include the following.

Hourly pricing

This is basically when you charge the client for the number of hours you work for them. You decide on a specific amount per hour and calculate the total amount based on the total hours you work. While this is one of the common models used across the industry , this, in some cases, can lead to exploitation.

Suitable for: Start-ups, small businesses, and companies that need fewer accounting services.

Fixed rate pricing

Fixed rate or flat rate pricing is where you get a fixed amount on a monthly basis from the firm. This ensures you get a stable monthly income and also makes it easier for the clients to plan their budget and avoid surprise costs.

Suitable for: Businesses with recurring needs, bundled activities, or long-term clients.

Project-based pricing

This can be found mostly in one-time projects, where you will give a flat fee for a particular project and get the payment once it is done. This pricing can also vary depending on the complexity of the project and would require the clients to be clear about their expectations and goals.

Suitable for: Businesses with one-time needs and defined deliverables.

Value-based pricing

As the name suggests, this focuses more on the value of the particular task than the time or days spent on it. For instance, improving a client's finances will obviously cost more than tax filings. This requires clients to have a deep understanding of the particular task and how it can impact their business.

Suitable for: Businesses with complex challenges, businesses that focus more on the outcome than the cost spent, and those that require strategic insights.

What are some common challenges faced?

Having your pricing figured out has multiple benefits. But if you are not doing it right, you might end up experiencing the disadvantages too. Here are some common challenges faced by accountants and bookkeepers while planning and implementing the pricing for accounting services.

• Some bookkeepers and accountants underestimate their skills and set rates too low. This, in turn, affects their income.
• In certain cases, the client might refuse to pay a large amount as they don't realize the value of the work that's been done. It is important for you to define the job and the value it adds to the business.
• As there are a lot of people out in the same job, bookkeepers and accountants tend to reduce their costs just to get clients. Competing only on pricing is going to hurt your pocket and also diminish the value of your work.

Bottom line

Finding the right pricing strategy for your accounting services might include a lot of trial and error. But once you find the right one for your business, the process becomes hassle-free. Keep in mind the type of service you provide and the value of it before deciding on the pricing. Remember, having a lower price in the market is not the only way to gain visibility. Plan the right pricing strategy that helps both you and your clients grow.

With the help of practice management software like Zoho Practice, you can smoothly manage everything from client onboarding to deep financial analysis. This, in turn, helps you achieve seamless operations.

Want to learn more? Try Zoho Practice for free today and explore how it can help streamline your accounting workflow.