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By Loren Fogelman

I recently polled a group of accounting professionals about pricing. Overall, 82% of those polled lacked pricing confidence, and only 5% increase their rates more than once per year. Why does this happen?

One factor is because most of us enter the workforce as an employee, working for someone else. Since we were paid by the hour, we are conditioned to connect income to time. When CPAs go out on their own, they continue to charge for their time. This is compounded by new business owners, eager for new clients and cash flow, who too often set a low hourly rate for their services.

The Upper Limit Challenge

Jordan started her practice as a side business. Although she left her employer two years ago, she kept her hourly rate at $50. That price seemed like a lot compared to what she was paid at her accounting firm. Eventually, though, Jordan hit what I call an upper limit challenge. The only way to earn more was to work more.

Winging Isn’t a Business Strategy

Jordan admits she’s not a savvy business owner. Her technical skills far exceed her business skills. Until now, her business grew by working hard and winging it.

Of course, Jordan wants to earn more money. Her current fees cover operating expenses, but that’s about it. We spoke candidly about her rates. They simply don’t reflect her expertise and years working at an accounting firm.

Have the Courage to Raise Rates

Charging more raises money-specific fears. As a result, the decision feels difficult. She was unaware of her self-worth, and beliefs around money influenced her prices.

Her primary concerns essentially fell into these categories:

• Nobody will pay those fees.
• No one else charges that much.
• I’ll lose my clients.
• How can I justify this?
• I don’t have enough experience or credentials.
• What if I can’t meet their expectations?

The One Degree Solution

Jordan’s accounting practice didn’t need a complete overhaul. A couple small, yet strategic, changes brought immediate relief.

First, Jordan discovered the truth about value. When approached from a service-oriented mindset, it eliminates concerns about greed or scarcity. Instead of thinking she’s taking money from her clients, she formed a new, positive perspective. She deeply connected with what her clients gain from her services. Her services free up their time and gives them accurate financials.

Shifting Fees Away from Time

Success occurs from the inside out. Once Jordan owned her value, all the resistance melted away. Jordan started with these five steps:

1. Start with your strengths – We started with a strengths list. Jordan discovered how she differed from other accounting professionals. It’s easier to increase rates when focusing on the benefit to clients rather than time. Here’s what I mean: Jordan helps her clients increase their profitability. What they earn from working with her is three to four times greater than what she charges for her services.  
2. Separate fees from time – Nobody wants a client who watches the clock. Tying fees to time will categorize you as an expense in the client’s mind. By Jordan partnering with her clients for a result, instead of time expended, it positioned her services as an investment. She used this calculator resource to set her new rates.
3. Success is messy – The thought of doubling or tripling rates is scary. Who will pay for this? How will I justify this? Can I meet their expectations? Jordan had the courage to follow my raise-your-rates system, even if she may have initially lacked confidence. But each time Jordan enrolled a client at her new rates, her confidence grew.
4. Stand out as the go-to expert – Rather than compete as a generalist, Jordan established a niche with law firms. She deeply understands their specific challenges and concerns. Her webpage and ProAdvisor profile outline her process and client benefits. Jordan is developing her reputation as the go-to accountant for law firms.
5. Solve a need – This is the No. 1 action that separates Jordan from the competition. She turned her introductory consult with potential new clients into a value conversation. This first meeting highlights the client and their needs. As a result, clients recognize her value and eagerly ask how to get started.

Jordan’s new clients value solutions. Over the course of our work together she doubled, and then tripled, her prices. Ditching her hourly rate offered the solution she craved, even if she didn’t realize that when we first met.

Jordan no longer views herself as just an accountant. She now focuses on being a team player who supports her clients’ growth.

The Possibilities Are Limitless

Jordan’s rates are a reflection of her self-worth. Claiming her personal value challenged her limits at first. Doing something new rather than sticking with the familiar felt risky.

Hourly rates position you as a commodity rather than an investment. An emphasis on tasks and reports makes it difficult for a potential client to determine why they ought to hire you. It minimizes expertise. By separating fees from time, clients will hire you for what you know, not what you do.

Like Jordan, start to transition from technician to problem-solver. Along the way, you’ll realize where you give your knowledge away for free because you don’t know how to charge for it. Leading with value, rather than competing on price, up-levels your practice. When you communicate value and highlight the benefits your clients receive from your service, then you’ll be on your way to earning more without working more.

Loren Fogelman is a price and profit coach who shows accounting professionals how to raise their income. She can be reached at loren@businesssuccesssolution.com.

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