Many, but NOT all accountants, charge fees by reference to the time they spend working on a client’s affairs. Most accountants in practice still complete timesheets to show how much of their day has been devoted to each different client and to each different aspect of management, administration, marketing or other ‘non-billable’ time.
Thinking back to when I was in practice it was many years before I realised that a timesheet may have uses as a management tool but that it did not ‘prove’ how much time had been spent doing anything. It was a guide, nothing more. In my talks to accountants, eg: ‘How to make more profits from your smaller clients‘ I ask accountants what they would bill in a variety of situations. The answers prove that the timesheet is a guide and that the ‘time costs’ that it reveals are rarely the same as the fees billed (or that could be billed).
In previous posts on this blog I have considered many related topics but, todate, I hve not made any direct reference to either Ron Baker or the VeraSage Institute (a “revolutionary think tank for professional knowledge firms”). I’ve been aware of Ron since first reading his book ‘Professionals Guide to Value Pricing’ in 2001.
Today I rectify that omission and do so by reference to a new post on the VeraSage blog: All accountants charge for their time. NOT!
The blog post refers to a Q&A found on a number of accounting firm websites (possibly as it comes as standard in a template web page):
“How do accountants charge?
All Accountants charge by time. The longer it takes to prepare your Return the dearer it’s going to be. Some businesses sell hamburgers. Real Estate Agents get paid commissions, and ACCOUNTANTS SELL TIME.”
This is a sad misconception. It’s based on a misunderstanding and it’s a misleading myth. Accountants may try to determine SOME OF their fees by reference to time. They may try to charge fees by reference to their time records but TIME is not generally what accountants sell. If it were then the corollary would be that TIME is what people who want an accountant set out to buy. And they don’t.
In my view accountants sell (or should focus on selling) Trust, Confidence and Peace of Mind. Indeed a quick Google search reveals an increasing number of firms who state this on their websites. These are 3 of the key qualities, if not THE 3 key qualities, that clients seek when they want to appoint an accountant. If prospective clients do not quickly trust you, have confidence that you will do the necessary and give them peace of mind that they can rely on you, you will not keep them as clients; indeed they may not appoint you in the first place.
What do you think you sell as an accountant in practice?
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