Things change, and client relationships at your accounting firm are no exception. When circumstances change, initial arrangements might not be cutting it anymore. It might be time to increase your prices.
Because the circumstances surrounding your business relationships change so frequently, it’s a good idea to review engagements annually to assess your business goals, capacity, and whether or not scope creep is eating away at your bottom line. Here are some things to consider when conducting your annual engagement review at your accounting firm AND some tips for implementing changes!
Your Service Model
There are many reasons you might consider updating your service model in the upcoming year. For example, you might be considering moving to fixed fee pricing rather than hourly billing if you’ve realized there’s a lot of labor involved in your engagements that is going unaccounted for. Increases in fees could accompany this change. Your clients also might be willing to pay for additional services with your firm, like advisory. Reviewing your engagements annually can help you analyze your client’s needs – and what services they need to be added to your packages.
How much work you’re able to take on fluctuates. If your accounting firm is undergoing changes in structure or staffing, moving towards a smaller but high-value client list might be your next step. Scope creep is an ongoing problem in accounting…and you want to avoid that at all costs! The way you do that is by understanding your own capacity and your workflow inside and out. When you’re making sure all your work is accounted for, your prices will reflect that.
Your Business Goals
It’s nearly time to ring in the new year, and you’re making resolutions for your health, your happiness, your productivity… and your business! Reviewing your engagements allows you to also review what work you’ve been doing. Does that goal align with your plans for the coming year? Maybe you’re wanting to change up your service packages or niche down your firm – or simply focus your energy on more high-value clients. If that’s the case, your entire approach to your client relationships will change. That includes the cost.
Having the Talk
Talking about money is never easy, but it’s much easier to discuss price increases after reviewing all the relevant information. Use your engagement review to your advantage. When talking to your clients, you can point to specific circumstances and numbers to justify the value you bring to their business.
Reviewing your engagements allows you to take stock, set goals for the future, and decide whether or not the value you bring to your clients is being compensated fairly. Set some resolutions for your business for 2023. This time next year, where do you want to be? How much revenue will you be bringing in? What rewards will your clients be reaping through working with you? After you’ve got your goals set, your prices are the next priority. Remember, as you discuss changes at your accounting firm and in your pricing models, be confident! You DO provide value, and you can show your clients exactly what that value looks like.