How can CAs optimise their client fees

How can CAs optimise their client fees

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How can CAs optimise their client fees

  • Highlights

  • Client retention a big issue for CA firms

  • Challenges with pricing services

  • Arriving at the right model

Chartered Accountants are evolving as the most trusted advisers to any business. There is a clear dearth of skilled manpower in this profession, yet CA firms are facing customer crunch.
Have you ever wondered why small and medium firms charging affordable fees are struggling hard with customer retention? You might feel “client types “or “services offered” or ‘location” can affect these differences. They might play a significant part but they are not the sole reason.
But what is the cause of such a situation? There are two possibilities -

The way the firm is managed

In the post-recession period, accountancy sector has seen the arrival of micro and online firms. But no matter the size, most CA firms have been plagued by the increasing pressure on fees. Most firms are still operating on outdated pricing methods, following time-based billing.
This is a simple billing method but it measures the wrong input, time and not the value of work done. For instance, in 5 hours your figured out how client A can claim tax exemption of Rs.1,50,000, whereas for client B you performed administrative works.

Even though you are billing both the clients in similar fashion technically only client A’s work is adding value.
To overcome this drawback try adopting value-based pricing or provide pre-packaged services to clients. Pre-packaged services involve listing all of the services you provide and attaching a price quote to it. However, the best strategy to fix the cost of the package is by trial and error. Check the maximum price your clients are willing to pay and then stick to it. When it comes to value pricing, there are two areas of concern - self-belief and communicating in advance. To determine the price of the service, evaluate the value of the service for the client, that it how it can benefit him. Remember to communicate the price/terms and what you do for the client before you start.

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The systems and processes adopted

Large accountancy firms with state of the art systems, can still end up with lousy work. At present times, you have access to multiple free or affordable software online, utilize them. But an essential part lies in encouraging your staff to adopt these new changes by providing them with the adequate training.
Without the necessary training your workforce will fail to utilise the resources at hand. Install additional screens, provide them with proper knowledge management and document management systems.

Buy electronic working papers, procedures, and checklists. Buy high-speed scanners and other suitable software tools. Take a CA loan, improve the systems and processes involved, overhaul your business to reach your goals.

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