What is a #RecipeforSuccess? Developed by QuickBooks ProAdvisors®, the #RecipeforSuccess campaign provides key ingredients and steps for accounting pros and their small business clients to achieve success.

A growing number of firms, including my own, have learned that they can provide their clients greater value by agreeing on a fixed price up front. If you haven’t made the switch yet to fixed pricing, this recipe can show you how. Part 1 was all about setting up your firm and processes to price for profit. Part 2 covers how to implement fixed pricing.

Master Chef: Laura Redmond

Key Ingredients:

• “How It Works” documentation
• QuickBooks Online (QBO)
• Systems to manage workflow
• Analytics

Directions:

Step 1: Set expectations. For success during the service delivery, it is important that the client receives the exact service that they expect … and that the firm avoids having to perform work that wasn’t factored into the pricing. In addition to the service package value description, create more detailed “How It Works” documentation to communicate clearly what services they are paying for in the service package, frequency the work will be performed, maximum amount of work included, the firm’s responsibilities and the client’s responsibilities. Include whether the client must meet certain requirements, such as using a participating bank in order for your firm to use QBO’s bank feed functionality. If you have defined your firm as 100 percent paperless and cloud-based, note that in the details of your service packages.

Step 2: Close the deal. Once the perfect service plan has been selected, incorporate all of the details of the agreed upon work, pricing and expectations into a service agreement. Include general terms and conditions for how your firm works, such as how the client and firm communicate, the payment terms, and any one-time setup fees. Payment can be scheduled to automatically process electronically at the start of the service period, improving the firm’s cash flow and forecasting.

Step 3: Manage workflow. If you are going to fix your price, you must control your cost, primarily labor. Furthermore, you want to make good on the expectations you set during the sale. Organize the setup, delegation, scheduling, performance and tracking of all of the firm’s work. Have a system for assigning work to staff and providing them with resources, such that services are performed efficiently, effectively and consistently with exactly how they’re detailed in the checklists you created. This optimizes your firm’s workflow, especially in common situations such as when the work isn’t performed often enough to be remembered the next time it is performed, when you lose an employee or they go on vacation, when you are training new staff, or when there is a custom set of instructions to perform for a particular client that is different than the norm. Scope creep becomes less likely when your staff are following step-by-step instructions defined, and then scheduled, by the firm.

Have a system for watching the firm at work –a bird’s eye view of all of the work assigned to all staff on all clients. This visibility allows the firm to view work status (completed, in progress and not started) in order to meet due dates, manage the firm’s and the client’s expectations, measure the labor resource and workload associated with a fixed price engagement, perform your work as a firm proactively instead of reactively, and allocate firm resources ahead of time to determine whether you can take on new clients, or when you may need to hire new staff.

Step 4: Analyze results. Evaluate whether an engagement was a success. Look into how close you were to estimating the cost or time spent on a job, what the average actual time is to perform a particular service after many instances, or the number of days it takes to complete a task from the day it is first assigned to start until completed. Learn something about past jobs that you can use on future ones. Find inefficiencies, innovate and improve processes.

In summary, when the firm assumes the risk of the engagement, they gain control over their profitability. Fixed price engagements allow us to capitalize on our knowledge, experience and expertise. They push us to innovate with a focus on servicing the customer. The value to the client is in the result; focus on that. An improved experience increases value, which increases price. Add to that a well-organized and optimized workflow for increased profitability

You control the services you offer. You control the packages sold. You control the price. You control how the work is performed. You control the profit. A firm that has its knowledge capital defined, and its sales and service delivery systems in place, is poised and ready for growth.