COVID-19 has taken the world by storm. Most people on the planet, including tax and accounting professionals, have been impacted in some way. We have been working around the clock to ensure that our business clients feel some sense of security in these uncertain times.
In response to this worldwide crisis, shelter at home orders have caused us to close our traditional brick and mortar firms, changing the landscape of how we operate overnight. Working remotely, we have had to adjust how we meet deliverables, as well as how we meet with clients.
Faced with this new reality, firms have had to make modifications to their current pricing and service offerings to keep their doors open – or at least to keep their Zoom accounts active.
Nicole Butler-Davis, CPA, of Butler Davis Accounting mentioned to me, “Getting pricing right is now more important than ever before. I say this because as businesses are closing their doors, accountants and tax professionals are in a unique position to truly advise clients on relief funding, loan consulting and cash flow planning, budgeting, and forecasts.”
Even before COVID-19, pricing had always been a hot topic, an ongoing conversation since the dawn of time. Whether it’s hourly, flat fee, or value pricing, we all have had our moment when we asked ourselves, “Did I charge the right amount?” However, after speaking with several accountants across the world, it is clear to me that there is no definitive right or wrong answer about pricing, especially during these crazy times.
I’ve also come to realize some firms are seeing an increase in revenue, while others are seeing a drastic decline. Sherrell Martin of Nitram Financial Solutions said, “My pricing and fees haven’t changed. Everything has been business as usual. In fact, I have gotten more leads as people are experiencing an increased need to have clean books.”
The reality is that general, niche, and service-specific firms will all be impacted differently. Jacob Schroder of Ascend Consulting LLC opened my eyes to this realization by saying, “I think this depends on your firm makeup. Tax-heavy firms are likely seeing revenue delayed due to the deadline extension, while project-based firms are seeing things cancelled or delayed because discretionary spend is decreasing.”
Based on the conversations I’ve held with my colleagues, I want to offer you a few alternative strategies or new methodologies in pricing to help keep your firm financially sound in 2020.
Be flexible. Collecting payment from certain industries right now may be tough. For example, we are all aware the restaurant industry has been hit extremely hard. Our clients in this space may not have the ability to pay because their dining rooms are closed. Instead of kicking these restaurant clients to the curb, consider flexible payment options, including deferring payments for a few months, or asking for smaller, more frequent weekly or biweekly payments.
You could also create a scholarship fund providing services to the clients on your current roster that are most in need. This scholarship would provide them with an allotted amount of donated time from you or your team. You can even get your existing clients involved by asking them if they would like to make a non-deductible cash donation to the fund. This way, they can also participate in efforts to support fellow business owners in need, while you and your firm still get paid.
Let me be clear. I am not saying you should give your services away for free. But, these alternative options could create a lifelong client by not only showing them you value them, but also value your business and don’t mind giving back to your community.
Remember, it is your expertise in accounting and/or taxes that is helping them get through this temporary rough patch. That education has and is continuing to come at a cost. You should be compensated for it.
Don’t discount your fees. As much as we all want to help our clients, you have to remind yourself that you, too, are running a business. Your priority should be ensuring that your business is successful, and you can’t do that by continuously giving away or discounting your services.
However, this is your firm and you get to choose when you work for free; I just implore you to not let your clients bully you into this pricing strategy.
So, Instead of trying to squeeze money from the clients you know are struggling, consider the relationship you have established prior to the coronavirus and place a value on it.
Bartering could be an option on the table if you know your clients are low on cash. The tax nerd in me wants to remind you that bartering is a taxable event, but the good human in me wants to remind you this is a cashless transaction. Feel free to give a little, but make sure you get a little, too.
Avoid scope creep. The Coronavirus Aid, Relief, and Economic Security (CARES) Act brought along with it the opportunity for us to provide value to our clients by helping them apply for loans through the SBA and other lending institutions.
As much as we want to help our existing clients get through this tough time, I want to remind you to look at your original engagement agreements to see if these additional services were a part of the deal. If they weren’t, then I highly recommend you explain to your clients that this additional assistance will constitute additional fees.
Again, I want to remind you that you are running a business. Your clients should understand that you can perform these services, but you have to ensure your firm is protected in the way you are trying to help them protect their businesses.
If you want to throw this service in with their existing engagement, make sure you emphasize that you are performing these duties even though you weren’t contracted to do so. Highlighting this fact should also make it easier to increase your fees when it’s time to sign a new engagement letter.
Get creative. Now is the time to experiment with ideas to bring more revenue in the door. Look at your current service offerings to see if there is any way to actually scale or automate them, making them more affordable for those in need.
Can you offer an educational webinar at a moderate cost for those who need help, but can’t fully afford your services? Have you considered offering speed dating appointments that are half the time and half the cost, ensuring clients still get some face time with you to get their questions asked? E-books and online courses are also creative alternatives to create additional streams of revenue. Don’t be afraid to do some research to see if these could be a good fit for your firm.
Give from the heart. Time is something we can’t get back, but compassion is something we can give a lot of. If you feel you have a moral obligation to do more, DO IT. Lean into that feeling. I know there are tons of accountants that are sharing their gifts with the business community. We are helping businesses feel that they are a part of a larger community that desperately wants to see them succeed during these tumultuous times.
As an example of answering the call, my good friend andd colleague, Andrew Wall, CPA, CMA, of cpa4IT, created a Facebook group dedicated to answering questions for free for the small business community in Canada. I’m sure he won’t be offended if you borrow this idea and create a community of your own!
The bottom line
No matter what pricing method you choose, remember communication is the key. Making sure you and your clients are on the same page when it comes to fees and services assures a continued great relationship and less liability down the road.