Are you charging enough?

Running a bookkeeping or accounting firm is challenging. With the ever-growing competition in the market, it can take time to stand out and command premium rates for your services. However, with the right strategies and mindset, setting yourself apart from the competition and attracting higher-paying clients is possible. This article will uncover the secrets to commanding premium rates for your accounting services.

The fear factor: Why we undercharge (and how to overcome it)

Let's be honest: Raising rates can be scary. The fear of losing clients or rocking the boat in a well-established relationship is a significant obstacle for many of us. We've all been there; you value your clients and worry that a price increase might make you seem ungrateful or push them to find someone cheaper. But here's the truth: You undervalue yourself and your expertise by undervaluing your services. In the long run, staying stuck at a lower rate can hinder your ability to invest in your growth and better serve your clients.

See video below, and be sure to watch the other videos in this series.

Understanding the value of your services

Before you can command premium rates, it is crucial to understand the value you bring to your clients. Our work is more than just number crunching; we provide accurate financial information and insights to help businesses make more informed decisions. By highlighting the importance of your services and their impact on your client’s bottom line, you can position yourself as a valuable asset worth investing in.

To effectively communicate the value of your services, consider the tangible benefits you provide, such as ensuring compliance with tax regulations, identifying cost-saving opportunities, and offering strategic financial advice. 

The ideal time to showcase your services is when you have a new client. These clients frequently come to you with disorganized data—often the reason they're switching firms. They might even mention this messy data as their explanation for the switch.

• “The prior bookkeeping firm never did the work on time. There were always delays.”
• “The other company never gave me any financials or explained anything to me.”
• “I always wanted to track specific metrics, but the prior accountant never had time to get to that.”
• “My bookkeeper was great initially, but then dropped off and became MIA.”

A new client sharing their challenges, especially messy data, is a golden opportunity for you. By helping them solve this problem, you can show your expertise and ensure a happy, long-term client.

Identifying your target market for premium rates

To command premium rates, it is essential to identify clients willing and able to pay for your services. While targeting a broad range of clients may be tempting, narrowing your focus can help you position yourself as a specialist in a specific industry or niche. My decision to niche my practice was the best business decision I have ever made in my 25+ years in business. I can command much higher rates than when I was a generalist serving everyone.

Our firm specializes in working exclusively with attorneys. Imagine the insights you see when 50 law firms are operational daily! By understanding your target market's unique challenges and needs, you can develop tailored solutions that justify higher rates.

Research your target market extensively to gain insights into their pain points, industry trends, and competitors. This information will enable you to customize your services and differentiate yourself from other bookkeeping service providers. By understanding your target market's financial capabilities, you can also set rates that align with their expectations and budget.

Building a strong brand and reputation

A strong brand and reputation are essential for commanding premium rates in a competitive market. Your brand is more than just a logo; it encompasses your values, personality, and the promises you make to your clients. A well-defined and consistent brand identity will help you establish trust and credibility and differentiate yourself from competitors.

Start by identifying your unique selling propositions (USPs)—the qualities or features that set you apart from other bookkeeping or accounting service providers. These could be your industry expertise, specialized software knowledge, or exceptional client service. All of these services can be your specialty. Once you have identified your USPs, incorporate them into your branding efforts, including your website, marketing materials, and client communications. Tell the world what you do and why your perfect client should hire your firm.

ProTip: To build a strong reputation, focus on delivering exceptional service and exceeding your clients' expectations. Word-of-mouth referrals and positive reviews can significantly impact your ability to command premium rates. Request testimonials from satisfied clients to showcase your track record of success.

Expertise and experience

To command premium rates, you must establish yourself as an expert. Clients are willing to pay more for services when they have confidence in your abilities and trust that you can deliver results. 

One effective way is by creating valuable content that educates and informs your target market. This could include blog articles (like this one), whitepapers, or webinars that address common challenges or provide insights into industry best practices. Positioning yourself as a thought leader can demonstrate your knowledge and attract clients who recognize the value you bring to the table.

Blog articles and YouTube videos are how I let everyone know I am an expert in legal accounting. Countless social posts and blog articles share what I know. I promise you that showing how you help others is the way to go.

I have written many articles on client costs because I know how troublesome it is to track these in an accounting system such as QuickBooks Online. We have landed multiple clients on these articles alone. The attorney will read the article and then examine how the costs are stated in their records. If they are incorrect, they call because they don’t want to do this work or know how to fix it. They need our expertise.

Providing exceptional customer service

Exceptional customer service is crucial in commanding premium rates for your services. Clients are not just paying for your technical expertise; they also value the support and attention they receive throughout their engagement with your business.

Start by ensuring timely and accurate communication. Respond promptly to inquiries and provide regular updates on the progress of their bookkeeping. Personalize your interactions by understanding your client's unique needs and tailoring your services accordingly.

Another way to provide great service is to simplify your processes and leverage technology. Streamline your bookkeeping workflows by using automation tools and cloud-based software. This increases efficiency and gives clients real-time access to financial information, giving them greater control and transparency.

Differentiating yourself from competitors

In a crowded market, differentiation is vital to commanding premium rates. Take the time to identify your unique strengths and capabilities, and leverage them to stand out from competitors. This could be specialized industry knowledge, a unique service offering, or a tailored approach to client relationships. When we meet with prospects, I always highlight our depth of expertise in their industry. I use “attorney lingo” so the client understands I know what an advanced client's cost is and how to present it in their accounting records.

Differentiation can also be achieved through strategic partnerships and collaborations. Consider partnering with complementary service providers, such as tax advisors or business consultants, to offer comprehensive solutions to your clients. We recently did this with an tax and consulting firm run by my friend and colleague, Jacob Schroeder from Ascend Consulting. His firm specializes in tax and business strategy. This marriage of our two firms provided our client with the best of both worlds! By aligning yourself with trusted partners, you can expand your service offerings and position yourself as a one-stop shop for all your clients' financial needs.

Pricing strategies for commanding premium rates

Setting the right price for your services is crucial to commanding premium rates. While it may be tempting to undercut your competitors' pricing, this can often attract price-sensitive clients who may not appreciate the true worth of your expertise.

Instead, focus on value-based pricing, where you set your rates based on the value you provide. Consider the time and effort saved, financial insights gained, and your services' impact on your clients' businesses. By tying your pricing to the value you create, you can justify higher rates and attract clients who recognize the return on investment they will receive.

Another pricing strategy to consider is offering tiered packages or service levels. This allows clients to choose the level of service that best suits their needs and budget. We like to tier our rates according to the number of touchpoints we will have with our clients and the expected response time. By offering varying service levels, while commanding premium rates for your highest-tier packages, you can cater to a broader range of clients.

Negotiating premium rates with clients can be delicate. However, with the proper techniques, you can successfully navigate these conversations and secure the rates you deserve for your bookkeeping services.

Start by understanding your client's needs and pain points. By demonstrating that you understand their unique challenges, you can position your services as the solution they have been searching for. Emphasize the value you bring to their business and the benefits they will receive from working with you.

When discussing rates, focus on the return on investment your services will provide. Highlight the potential cost savings, increased financial accuracy, and improved decision-making your expertise can deliver. By framing the conversation around the value you create, you can justify your premium rates and alleviate any concerns your client may have.

At our firm, we do not negotiate our rate or price cut. If a client expresses concern that our fees are out of their price range, we will refine the scope of work to lower the volume of work we will do and reduce the costs. But never undersell yourself or cut your pricing; you will regret the decision and not enjoy working with the client. Trust me on this one.

ProTip: The best way to reduce tire kickers is to charge an upfront consultation fee. That will eliminate any prospect who is not serious enough to pay the fees you command. You should also charge a file review fee to examine their records. We also provide a video with our quote to demonstrate the work and value we will provide during cleanup. Start your engagement with a client with an NDA (non-disclosure agreement). It shows the client how serious you are about maintaining the confidentiality of their records.

Your value is your strength

Here's the secret sauce: confidence. When you genuinely believe in the value you provide, it shows. Invest in yourself and your business. Continuously learn, refine your skills, and build strong client relationships. Find a friend or colleague and buddy up. Practice the conversations. They can be your best cheerleaders and give you the confidence to raise your rates.

By implementing the strategies in this article, you'll be well-equipped to have open and honest conversations about your rates. Confidential communication and a clear demonstration of value can help ease client concerns and pave the way for a successful transition to premium pricing. Success comes to those who invest in themselves. Embrace your worth and watch your business soar to new heights!