Value pricing - A New Way to Run Your Practice

This course will help you understand value pricing vs. hourly pricing and how implementing the use of QuickBooks Online Wholesale Pricing will transform your business. We will discuss the benefits of value pricing for accounting professionals and their clients. Learn about the trends and relevant results from Intuit's 2013 Average Billing Rate Survey. Discover how to create packages of your services and determine price levels. We will discuss wholesale pricing for QuickBooks Online, how to get it and incorporate it into your packages and pricing to make your business more profitable.

My name is Michelle Long, and I'm glad that you're joining us today. I am a CPA and the owner of Long for Success. I'm the author of of several different books-you can check those out on Amazon if you're interested-co-host to the Ultimate Accounting Beacon, an award-winning virtual conference for accountants and bookkeepers. Our next one's coming up in July if you'd like to join us for that. I'd also invite you to join my LinkedIn Group. It's a great resource when you have questions, as well as the Intuit Community Forum. The LinkedIn group is getting close to 60,000 members now, so if you're not a part of it please join us. I'm also thrilled to say not only am I trainer for Intuit, but I'm now an international trainer for Intuit. I've had the privilege of not just going across the U.S. and various cities across Canada, but also to Australia and London teaching other accountants and bookkeepers about QuickBooks Online, so I'm really glad to have you joining us today for this webinar on value pricing.

You are eligible for CPE credit for this webinar, but you have to stay the whole time. The other thing is in the middle of the webinar sometime, I'm not going to tell you when, I will provide a CPE keyword. I will say it a couple, two or three times, and you have to write down the keyword. If you miss the keyword, I'm sorry, I can't repeat it. You can't say, "I hit star, I had to go let my dogs out. I missed the keyword." You're going to listen and get that keyword, and then at the end of the webinar you'll be prompted to enter the keyword, and then you'll get your certificate emailed to you within 14 days after today's training. Mark your calendar. Wait a full two weeks or so, and then if you don't get your CPE, follow up, and then you keep that copy for your records, of course. If you need to download the course materials and the handouts, those are available at All of these slides are available for you to download, so you can get those.

What we're going to be talking about today is we're going to through and talk about value pricing versus hourly billing. We're going to summarize the benefits for us as accountants, as well as our clients. We'll talk about some steps to implementing value pricing, talk about how to create packages of your standard services, implementing the use of the new wholesale pricing that's available for us with QuickBooks Online. We'll talk about how to determine your price levels, your ranges, understand how the results from the Intuit average billing rate survey applies and talk to you about how you can find those and look at those. We're going to identify some initial clients to convert, and then also understand the importance to clearly define engagement letter.

We do have a lot of material to cover. I'll probably go faster on some of the stuff at the beginning, so we can use a little more time on talking about packages and things like that a little bit later, but let's start about talking about what is value pricing. We all know what hourly pricing is, we've been doing it ...



Your screen is still paused, so I'm still seeing the title slide.

Oh my goodness! Thank you, thank you!

No problem.

There we go. Now you guys are with me. They missed the little intro slides. That's not the end of the world, but thank you for telling me, you guys. I've even got it on right here on my iPad, so I apologize for not looking and catching that.

Hourly billing. We've been doing that for years. It's been a tradition in the accounting industry forever, but unfortunately, it's not a good tradition. Hourly billing really restricts us, especially now that we have new tools and new technology that allows us to get the work done a lot faster. Hourly billing is where you just keep track of your time, and then you bill by the hour based on the time you worked.

Then there's discussion about value billing versus value pricing. Value billing is when you do it after the fact. You've already done the work, and then you kind of look at it and you say what's the value and you bill according to that, so it's after the fact. Whereas value pricing is you're setting a pricing up front and before the work is performed. That's what we're talking about today is doing value pricing.

With value pricing, we're looking at the fees based on the value to our client not just the number of hours. This is where it's kind of hard, and it gets easier with experience, but right off the bat, you might have a hard time with this and that's why we want to talk about ways to get started and things like that, but it does get a lot earlier. We want to think about what is the value that we're providing to that client. One of the things we need to remember is not to underestimate the value of the benefits that we're providing.

A lot of times I hear accountants or bookkeepers say, "The client can do this themselves, it's not very hard. They could do this themselves. I can't charge that much." That's the wrong thing to be thinking about because the client doesn't want to do it themselves that's why they're coming to you. They want you to do it. They want you to take care of it. They don't want to worry about it. Yes, theoretically, they could, but they don't want to. You're providing a service that's a big value to them.

The other thing that we keep in mind is we're not just selling our time. We're selling the knowledge, the experience, our innovation, our customer service. You're selling everything that you've got. All the tools that you've learned how to use with the bank fees and QuickBooks and QuickBooks Online, your years of experience, all of that is worth something. Think about it. We all know undeposited funds-the big mistakes clients make. When you first come across undeposited funds and a problem with it, you're not sure what to do. You don't know how to fix it. It may take you 30 minutes or an hour to figure out what's going on and how do I fix it, but now that you have that experience and that knowledge of how do I fix it it may only take 10 minutes now. Should you make less money now that you know that and now that you have that skill and that knowledge and that expertise?

The other thing to keep in mind ... Now that we have all these tools available to us that make us for efficient we bill by the hour, we make less money, and that's not the way that it should work. We really have to get away from the hourly billing and thinking about how long it takes us to do things and think about the value that we're providing to that client. Sometimes we don't realize it.

Here was a good example where it really hit home for me the value of something. I was having a Christmas party, and I had all of these people over, like 30 family members over. Everything was going great. We had plenty of food, plenty of drink, everybody's having a good time, and then something that's very embarrassing as a hostess, the toilet clogged. Oh my goodness! I run to the back room and I get the phone and I call the plumber and the plumber says, "It's going to be an extra fee because it's the weekend. We have a higher rate on the weekend." I said, "I don't care. Please come. Please come now." The guy came over. It only took him about 10 minutes and I think it was like $115. My mom was like, "Oh my goodness! That's outrageous! $115 for 10 minutes of work." My mom's like, "You could've done that yourself."

Yes, theoretically, we could have done that ourselves, but we didn't necessarily have the right tool. Maybe you need a snake or some kind of tool. We didn't necessarily have the right tools that we needed. We also didn't want to deal with it. We were in the middle of a party. We didn't want to do it. We wanted somebody else to do it. I was happy to pay him $115 to take care of that problem for me. That's were we need to realize that maybe our clients can do it, but they don't want to do it. They're busy running their business. They're busy dealing with employees and trying to make sales and ordering product. They want you to deal with it. They want you to take care of it. We really do provide a lot of value to these clients. We just need to remember that and not discount the value that we're providing.

Now let's talk a little bit, too, about the benefits for the client. It's not all just about us, but the client like it when we move to value pricing. Some people call it fixed fees. You can call it whatever you want, but the client then knows what the costs and the expectations are upfront. They don't worry about how you're spending your time, or, "Oh my goodness, she's charging me $85 an hour or $100 an hour! That's outrageous!" When they're paying $500 a month, they don't worry about those things. They also feel better because they know that you understand their needs and their values.

It helps us to develop better customer loyalty actually, and when you think about it from the client perspective, what do you buy or what do you purchase that you don't know what it's going to cost? Even if you take your car in ... Let's say your car has a problem. You take your car into the mechanic and you say, "It's making a thumping sound." They say, "Well, we have to look and see what's wrong with it before we know how to fix it." Then they even call you and say, "Okay, here's an estimate of what the price is going to be. Do you want us to fix it or not?" People want to know what the cost is. They don't want surprises.

Our clients don't like hour billing, either. They like the value pricing, as well. For us, as I mentioned already, as we improve our efficiency and improve our profitability, it helps us overall. It helps our firm to be more profitable, as well as customer loyalty. The clients like that. They like knowing what the fees are going to be. It also helps us to develop a better relationship with our client. Overall, it's a win-win. It's a win for the clients and it's a win for you and your practice.

Along with that impact on our client relationship, as we're getting away from doing data entry, with the bank [feeds 00:09:21] that are available in QuickBooks Online as well as QuickBooks Desktop, but especially in QBO, because it's all automated, every night, that's coming through. This is allowing us to get away from doing data entry. We're not doing that anymore. Why should we just sit and enter the checks and enter the credit card purchases when its already there? We're doing more data management and data analysis and this is allowing us to provide a higher level of service to our clients because we're not spending all this time getting the data in there. We now can be more of a trusted advisor with our clients.

One of the things that I was always frustrated with is when the clients would view me as just the bookkeeper or just the accountant and they didn't really value what I was doing because I'm just doing data entry. "I could hire some college kid to do that. Why should I pay you so much per hour to do data entry?" Moving away from data entry is really great for us and for our clients all the way around. Again, it helps us to be that trusted advisor and really have that relationship with the clients that a lot of us want and a lot of us need. Again, it's a win for our clients and it's a win for us.

How do we get in to start doing this? This is where you guys all recognize the importance of this, but it's how do we implement it? Let's start talking about how do we start moving to value pricing? I broke it down into three basic steps. I'm considering that most of you on this call are probably in a small firm or small practitioners on your own. In a larger firm, you're going to need to involve more [staff 00:10:51]. You need to have committees and things like that. You're going to have more people involved and more considerations.

I broke it down just into three basic steps. You may need to add more depending on your situation. First, we want to start by establishing packages-a package of our services. Then we need to determine our pricing. Then we need to evaluate. This is a reiterative process. In other words, you're not just going to do it once and be done with it. You're going to start and you're going to set some packages in prices and then you're going to evaluate. How are things going? Do we need to change things? Maybe we need to modify our packages or modify our pricing. You're going to keep going through this process getting it better and better and better as you get more experience with this, you'll get better, and you'll want to keep re-evaluating and making changes.

Let's start by talking about creating packages that'll be your standard services. This is where you need to sit down and make a list of all the things you do for your clients. What are the standard services that you provide? Entering checks, entering and paying bills, entering invoices, receiving payments, doing payroll for some clients, making a list of all the [fee-ed 00:11:58] services that you do. In addition to reconciling, you provide monthly statements for them. Do you do the sales taxes? Put down all these things that you do.

Then lets try to break that down into three different packages: a basic package, a middle package, and a premium package. Why do we want three packages? You want at least three, and the reason we want at least three packages is for a very important reason. There's a magic of three and a good example of this ... You go look at any place they have small, medium, and large, or the have the basic, the middle, and the premium packages. The reason is there's a magic of three because most people will choose that middle package.

Here's a good example for you. Wendy's. You know Wendy's Hamburgers and all that? They have a Single, and a Double on their menu. They wanted to increase the sale of the Double burgers, so they asked somebody, they got some advice. "What should we do to increase the sales of Doubles? They added a Triple to the menu. The question was "What? We're trying to increase the sale of Doubles." When all they see on the menu is a Single and a Double ... If I go in to Wendy's and I order a Double, I'm like, "Man, I'm really a pig. I don't want to order a Double, so I'll just order a single." When they added the Triple to the menu, then all the sudden, "Well, gosh, I could order a Double. At least I'm not a pig and I'm not ordering a Triple." It increased the sales of the Doubles, a lot. They didn't sell very many Triple burgers but that wasn't the goal. The goal was to sell more Doubles and that's what they did when they added a Triple in there.

There's a magic of having three things that you're offering. The reason for that is the premium package, or the top of the line one, it sets the anchor. That's the highest. For your clients, they may say, "Well, gosh, I don't want to pay for the premium package. That's more than I can afford. I'm looking for some value. If I go with the middle package, that gives me the most value for my money." Most clients are going to be accepting that middle one. Keep that in mind as you're creating this. Some people even go ahead and do four or five packages, so it's kind of up to you how you want to break it down, but you definitely want at least three.

Keep in mind, like for example, on your basic package, you may have some clients that are very price-sensitive. You know them, they're all really cheap. They don't want to pay, right? "I could go get a college student to do this." For those value-conscious clients, the ones that really want to keep the cost down and with the economy the way that it is, maybe they need to keep the cost down. In that situation, you may have the client doing a lot of the tasks. Maybe you have to do some training up front to teach them how to do that and then you just come in, possibly, on a quarterly basis to review things, things like that. Your basic package might be the really lowest level of packages.

Another thing I want to point out before we keep moving on here is not every client is a good client. If they are looking for the absolute cheapest package and they keep wanting to knock you down in the price and they're just looking for the lowest price, that's probably not a client you want because as soon as somebody else comes along with a lower price, they're going to drop you. There's no point. There's no loyalty there. You don't want clients that are just interested in the lowest price. Just because your competition is charging a low price that's not reasonable, don't let them set your prices. You need to keep in mind that you need to make your own prices based on the value of the services that you're providing and the benefits that you're providing. Keep that in mind. Not every client is a good client. There are some clients that are struggling, so there might need to be a basic package to help some of those.

Then the middle package is going to be the one that is the most common services that you provide. This is going to be the one that most of your clients will choose. It's the most common that you do. It might be all the monthly bookkeeping, reconciling the bank accounts and the credit card accounts and things like that. It's the one that you do most often.

The premium package, that's where maybe you provide them with additional reports or some analysis on the reports, some ratio analysis about how things are going, stuff like that. Maybe it's a priority service and response time. "If you send us an email or call, we'll get back to you within four hours." Your premium package is going to be a higher price and just like the triple, not that many people may buy the premium package, but it helps increase the sales of your middle package.

The other thing to keep in mind is once you start talking about packaging with your clients and giving them options, you've changed the discussion away from, "Do I want to do business with you or not," to, "How do I want to do business with you? Which package do I want to choose? Which one's going to be right for me?" You want to give them these choices because it's going to help. It helps them to get value and stuff.

Let's look at a couple examples here how you might set up some different packages. These are just really ballpark examples just to get you started as we're going along. Also, if you've got some questions, go ahead and be typing those questions in there. I see a lot of you have been talking about the course materials and then providing those links. That's great.

Let's go ahead and talk about some of these sample levels here. For example, let's say we set up this silver level. In this situation, your clients might be going ahead and doing all the entries. They're accepting the transactions that are downloaded from the bank accounts, but you're coming in on a monthly basis to make sure the bank reconciliations are done and just overview things. You might have email support for them when they have questions.

Then you might add onto a gold level, where you're doing the monthly reconciliations, but maybe they have a lot of payables to deal with. The client has lots of invoices that need to be paid. You're going to do the AP management. The client might still be doing the invoicing and receiving payments from the customers. You're going to deal with the AP side and email support, as well. That might be one example.

Then you might have the platinum level where you're doing everything for the client. All the monthly bank recs, the AP management, plus you're doing the receivables for them, payroll up to five employees. Actually, for a lot of you, that might be your gold level where you're doing everything for them because that might be what you do. This is where you need to go through, list out the services you provide, try to chunk it out into different packages that you can use for these clients.

In going through and thinking about your current clients or what you're doing for them and stuff, this is where you can think about how can I differentiate? What are some additional value that I can provide to my clients? I've got my basic services for my clients. What are some other things?

A couple of things to think about is the response time, like with that email support on there. What type of support are you going to offer to your clients? Maybe the silver is they don't get support. Maybe the basic package, if they need additional support, that's outside the scope of the engagement and you want to charge them for that. Maybe the platinum level is you give them unlimited calls and phone support and email support and things like that.

This is where you've got to go through and thing about the [differences 00:19:24] there and it might be what's your response time for returning calls or returning emails? Is it 24 hours? Or at the platinum level, it might be that they get a return call or message, whatever, within four hours. The support and the response time is something to think about.

One of the things Ill hear people say is, "Gosh, Michelle, if I tell them we're going to have unlimited support with email and phone calls, that's just going to be crazy. I can't deal with that." What you'll find is when you have these support options for your clients, most of the time, if it's a new client, you're going to have more support for them up front, during the first month, and then less the second month, because you're training them and you're answering all the questions on what they need to do and things like that. As the client gets trained, then they don't need to contact you as much so instead of a lot of contact the first month, you'll have less contact the second month and then the third month, it might just be one or two questions throughout the month, and then as you go along, they don't need that much help. Yeah, the support is usually a situation where there's more up front, and then after that, there's not as much.

I've found that most people won't abuse that. However, we need to lay the ground rules: when do you contact me? When is it an emergency? How do I want you to contact me? For example, I'll tell my clients, "Look, save up until you have three or four or five questions, and then send me an email or let's schedule a time to talk about those questions. Don't call me every time a question pops into your head." I had this one client, his name was David. Bless his heart, he was trying so hard, but every time a question would come in his head, he'd pick up the phone and call me. First of all, I don't like phone calls. I would prefer email, that way I can respond when I want to. He would call, I'd say, "David, write it down, send me an email, and then we'll schedule a time to talk about it." I had to keep saying that and then I finally just stopped answering the phone. You've got to set the rules. You've got to train these clients.

You also need to tell them when it's an emergency. If you tell them, "Hey, these are my normal business hours, 8:00 to 5:00 or whatever, here's my cell phone number in an emergency. You've got to specify what's an emergency, because an emergency to you may not be the same thing as an emergency to them. When is it okay for them to call you nights or weekends, or is it okay? You've got to lay these ground rules and think about these things in addition to setting up your packages so that your clients know how to work with you and it's very clear about all that stuff.

Let me see know, we've got a few questions here. Let me see if I can look at some of these questions and we'll get some of those. People want to know about the link to the recording. Yes, we will share the link to the recording after the fact, so you'll have that available. If the client knows hourly billing rates up front, then what's different about the value pricing when they know up front? In both of these cases, prices are known beforehand.

What we're talking about ... Let's say your hourly billing rate is $100 an hour. Let's say you've been doing things ... In the past, it's taking you 10 hours to do the work each month, but now you're implementing the online bank feeds with QuickBooks Online that are coming through automatically every night. You're implementing some other tools that are making things faster for you. Instead of taking 10 hours a month, now maybe it's only taking you two or three hours a month. If I'm billing $100 an hour at 10 hours a month, I'm making $1,000 a month. Now that I'm faster, and I'm smarter and I'm more efficient and I've implemented tools, now it's only taking me let's say three hours a month. Should I get $300 a month now? That's not fair?

You really should keep getting the $1,000 a month, because that's the value that you're providing to the client. Along with that, now you've got more time so you can help the client with, "Hey, how are your margins doing? How's your analysis doing?" You can help by giving them a quick call or a quick email or adding value services to them, whether it's, "Hey, did you know your gross profit margin's going down? Maybe you need to adjust your prices." We're moving away from that.

The other thing is when we're talking about hourly prices, a client, a lot of times, if they hear $100 an hour, that brings that whole questioning, "Are you really working on my stuff? Are you being efficient? Are you looking at your email or taking calls while you're working on mine? How come it took you 10 hours? Why didn't you get that done in eight hours?" It's the whole negative connotation of hourly billing and we can get away from that when the client knows it's $1,000 a month. You'll get the work done. They don't worry about those little things like that. It helps to have a better relationship there, as well.

Somebody else just asked, "Do you create these packages and then post them on your website?" That's totally up to you. Hi, [Don 00:24:15], glad you're joining us today. Some people are posting these packages on their websites so the clients know them up front. I'm going to share one of those with you here in just a second. Some people, though, don't want to put that on their website. It's your decision. Some people may have a PDF that they create that they can send out to the client and talk about it with them that way. It's up to you whether you want to put them on your website or not. That's your choice, whichever one you want to do.

Can we set up a "Help Us Find You The Right Price" based on questions? Yes, that's a great idea, Mohammad. Which one of these services do you use? Yeah, having some questions ... I usually like to go through the questions with the client so that I get to know their business a little better, to ask them how the business operates, how do you do your invoicing and receiving payments? Are you receiving payments via Intuit Payment Network? Are you using merchant services? How are you receiving payments? You may want to talk through that, but yes, definitely you could set that up to have questions and things like that.

Do you create multiple packages within each level so that a company with a few transactions might use silver A and then silver B ... One with extensive needs, silver B. You can do that if you want to. It just depends on your situation. One of the things that I always suggest that you do is you put an asterisk by all these that say, "Prices start at $500 a month," so that if they have X number of transactions ... Maybe they have 100 transactions a month. It might be 500, but if they have 1,000 transactions a month, then yes, it should be a higher rate. I like to see an asterisk on there that says prices start at X amount per month.

The other thing to keep in mind is you've got to re-evaluate these things because as your clients grow, the prices may need to grow, as well. Just because you set a package price up front, you need to re-evaluate, perhaps on a quarterly basis, every six months, at least every year, and you should be increasing your rates every single year. Inflation keeps going up, everything goes up, you should increase your rates. It doesn't have to be a lot, but at least a few percentage points every single year so that all the sudden, you're not five years out and you're like, "Gosh, my rates are way too low. I now need to do a big increase to get them back up to where they should be." It's better to do a small incremental increase every single year.

Let me go ahead and talk about a few more things here and then we'll get back into some more questions. First of all, let's type in that CPE, or write down that CPE keyword. You'll provide it later. The CPE keyword is Nickel. Nickel. I have a nickel in my pocket along with a dime and a quarter. Nickel. If you were multi-tasking, write down nickel please. Nickel-nickel-nickel. I'm going to say it one or two more times. Nickel. I'm looking at some of the questions here, too. Some people are having great comments. You've touched the pain points ... Oops, it just moved there. Transactions grow, we talked about that. A rate sheet. Yes, having a rate sheet is a good idea. Lori says she already has a rate sheet, very good. Is keyword capitalization important? I don't think the capitalization matters here, but capitalize "N" for that keyword, for Nickel. Okay, so type Nickel in there.

Let's go ahead now and let's talk about something else to take into consideration. When it comes to QuickBooks Online, they now have something new called Wholesale Pricing. This is for accountants and bookkeepers, where we can save 30 percent for our clients every single month for the life of their subscription. If you click on that link or type in:, it'll take you to that. This is free for us. You've seen special promotions where they'll have 30 percent off or 50 percent off. A lot of times, those might be just for the first six months or for the first 12 months. This is for an ongoing basis. As long as your client is your client, as long as you have that subscription, there's a 30-percent discount. This is on new clients only.

If you've got existing clients right now, this can't apply. I know a lot of accountants and bookkeepers have been saying to Intuit, "We want to change that," so it could change in the future, but right now, it's only for new clients and it's on Essentials and Plus. You get billed for your client, so you'll get that bill for all your clients, all in one bill. If you look at Online Plus, your price is about $28 a month.

A lot of accountants and bookkeepers, and this is true globally, are incorporating that price into their services. The monthly price that you're charging might be $1,000 per month or $500 per month, and it includes the price of QBO. I have some people who say, "Oh my gosh, well why would I want to pay that $28 a month?" For $28 a month, you're not doing the data entry anymore. You're getting the automatic bank feed. Every night, you're getting those transactions imported.

For $28 a month, you're not sending files back and forth to the client. You're not worried about is the client using QuickBooks 2002 and how am I going to work with them? You're not worried about what version the client has. You're not worried about if you get a file for the client, did they cancel the accountant's copy? Did they restore the right backup copy? You avoid all those problems, all those issues. It saves us so much time and trouble and is well worth the $28 per month in a lot of ways, because it's improving your efficiency, it's saving you all those headaches. You and the client can both be in there together working. A lot of accountants are taking this Wholesale Pricing. They're incorporating that into their prices, into their packaging.

One of your package benefits is it includes QuickBooks Online, but they don't have to pay for that. They don't have to buy QuickBooks and have it on their computer at all. If you're doing everything for the client, you can give them reports-only access, so they can log in and see any report that they want to see, but yet you may not want them to mess anything up, so you can restrict their access, or you can allow them to enter the invoices on their phones and it's automatically updating on QuickBooks Online. There's just so many benefits. Now this Wholesale Pricing makes it so much easier to incorporate this into our monthly fees and our monthly packaging or quarterly or whatever you choose to do.

This is great. I'm glad to see that Intuit has finally done that for us. If you haven't signed up for it yet, go ahead and sign up for that. It is free for us as accounting professionals, then build that into your fee structure.

Here's an example of how can I go through and start determining my price level. Here's an example you'll see of a price list that Jo Ellen has put together and she said I could share that. Review the annual fees of your current clients. Take a look at some clients that you do the same work for on a regular basis. When I say regular, it could be monthly, it could be quarterly, or it could be annually. Think about those shoe box clients that you get at year end. Your shoe box clients, oh my goodness ... Wouldn't it be great if you had that bank feed set up where you're getting that data all year long and it's coming in automatically to where you just have to go through and do the accepting and matching of any transactions or just accepting it all? It's going to help tremendously if you get some of them set up.

Look at your annual fees of your current clients, those clients that you're doing the same amount for. Go through and divide that by 12. What would be their monthly? That way you're taking into consideration that we only do certain things quarterly, like the sale taxes or the payroll taxes. Look at what is it on an annual basis. Divide it down into a monthly basis. We're getting some ballparks here to get us started. Also, look at the results of the billing rate survey, Intuit's Average Rate Billing Survey. Let that help you to get some guidelines and get some insight so that your rates are not too low.

That is one of the biggest mistakes I will see people make is they set their rates too low. We don't want to do that. Again, don't discount the value you're providing and let's not set our rates too low. I'll talk more about that billing rate survey in just a minute. Then go ahead and determine what is the basic price of it with parameters. In other words, you see the little asterisk next to bookkeeping services? You should say, down there at the bottom, pricing may vary depending upon the complexity of the work or a large amount of transactions or large volume of transactions.

For example, one client may have an invoice, it may be one or two lines. Maybe they did the weekly lawn service and maybe they did some fertilizer application, so it might be just two lines. You may now have another client that has an invoice where they're selling lots of inventory, so it might be a 20-line invoice as opposed to a one- or two-line invoice. You may have some clients that have inventory, which is more complex than the service-based businesses. You may have clients that have 1,000 transactions per month and another client that has 5,000 or 10,000 transactions per month.

This is where some of you mentioned that you might have a rate sheet and you might need to go through and have different levels or you might have a range. The monthly fees may range from $300 a month up to $1,000 a month. This is where, though, you've got to get an idea of what the pricing should be to where you can say for a general service-based business like a mowing and landscape company, most of the time, it's going to be about $500. You've got a pretty good feel for that. You may be able to say for a company that's got inventory, it's closer to $1,000 a month. This comes with experience and so it comes from also reviewing those annual fees of your current clients. Look at the client. Look at the type of industry they're in. Consider the volume of the activity and what you're doing. This is going to take some time to sit down and think these things through for your business and your clients.

Remember, this is where we want to just get started at this point. We're just getting started, and you want to pick just a couple clients and then you can start rolling this out to all clients. You're trying to go through here and just get a feel for it. You'll notice here on hers, she's listed what she's doing for her monthly bookkeeping. She says reconcile up to two bank accounts and two credit cards, and then she says add $50 for each additional bank or credit card. Yet again, it's going to depend on the volume of transactions.

You may have different levels in there, as well. These are ideas to get you started, but you always want to include that asterisk there based on the complexity and the volume and take that into consideration when you're looking at the client. Somebody's asking where do we find the results of the billing rate survey? Intuit ... I have Donna and Christie, they're going to type those in there for you. They'll share that link for you on the billing rate survey.

Here is one of the things that I wanted to share with you, and I'll show you some more here in just a second. The billing rate survey, when asked ... Intuit's done this survey for many years, every couple years. I did it for them in 2013, and one of the things that we're seeing over the years is more and more people are going to a fixed billing rate. You're seeing more and more accounting professionals that are going to a fixed billing rate or a fixed fee.

One of the other things that I thought was interesting ... Let me go over here and share this with you. When we looked, and Intuit can share ... They're going to share the links with you, but here's one of the blog posts: Changes in the Average Billing Rates. When we look at the hourly rates or the changes between 2009 to 2013, it's really stayed the same or even declined a little bit. The hourly rates are actually going down a little bit. This is my surmise, what I think ... I think part of this is the economy has been hurting people and it's pressuring our fees on a downward basis. Hourly rates have been going downward.

Guess what's been going on with fixed rates? They've been increasing from $251 in 2009 up to $469 ... More and more people are starting to used fixed fees and not only that, but you don't get the push back from, "Oh my gosh, your hourly rate is too high." The clients might say, "Oh, I'm paying $469 a month for my accounting and bookkeeping? I'm happy." The average fees for fixed is going up. I thought that was kind of interesting to notice. Not only are more accounting professionals switching to the fixed fees or value pricing, but those rates are going up compared to ... Oops, I got to get back to the right one here. Hourly rates have had downward pressure on them.

These hourly rates in the billing rate surveys and things like that, that is just to give you an idea right now, are you too low compared to the market averages. Do not just use those things and bill by them, because you may have more experience, more expertise. These aren't scientific surveys so they could be inaccurate. Just as a sample guideline, just to let you know "My rates are too low" ... I see a lot of accountants and bookkeepers whose rates are way too low. If you've been charging $50 an hour, your rates are way too low. You're really not taking into consideration the experience and expertise and knowledge you have.

I'm assuming that you have the experience and expertise, that you didn't just come over from doing something else and say, "I'm going to be a bookkeeper." Hopefully, you sought that education or that background or that experience to be doing it. Use those surveys just to give you some guidelines to get going. Here are some of those fixed fees that I had mentioned and how they are increasing over the years, how they've gone up quite a bit.

We need to ask more questions in the next survey, more details about these fixed fees, to get it to be more meaningful for comparison purposes. We don't know exactly the types of clients that were involved or the types of services that were provided, average. These averages are not statistically accurate at all, they're just general guidelines just to give you an idea.

How can we get started on some of this? First of all, let's look at three initial clients that we might want to convert. I mentioned look for those that you have the regular services, big clients that you're doing the same things for on a regular basis-monthly, quarterly, twice a year, or annually. Also, look for clients that are a good candidate for QuickBooks Online. It is saving us so much time and improving our efficiency of working with our clients that I think candidates for QBO are good ones to put on the fixed fees or the value pricing.

The reason for that is we're working in the same files. Your client can be doing invoicing and estimates from their smartphone or from their tablet or from their computer. You could be in there doing the reconciliation and things like that, paying the bills, or whatever. You both can be in there working together. Not only that, but those transactions are downloaded every night automatically. You don't have to remember to tell it to update the transactions. The bank feed is automatic and the bank feed is automatic on not just your checking account, but also credit card accounts, PayPal accounts, things like that.

I would look for clients that are good candidates for QBO. Along with that, I want to mention I have some upcoming webinars as part of this Success in the Cloud series. When we talk about who is QuickBooks Online right for, we go over a whole hour of identifying which QuickBooks is right for my client, things like that, talk about the differences, talk about converting from the desktop to QuickBooks Online, all of that. There's lots of webinars coming up that will help you if you need some more help in that area.

Another thing that we want to talk about is looking for clients that don't have complex transactions. Remember, we're getting started here. We want to start with easy clients, not the hard clients. You want to start with clients that don't have a whole lot of line items or inventory on every single transaction. You also want to look for those clients that keep business and personal separate because when our clients co-mingle their funds, and they have business and personal together, which we keep telling them not to do that ... We tell them to get separate accounts, but some of them still do that. That requires more work and more intervention on our part. It requires finding out which ... What was this for? Was it business? Was it personal? It just requires more time and it's not as efficient.

Remember, this is where we're just getting starting. We're identifying [three 00:40:52] clients to just get started doing this. Later, you can work on adding the more complex clients, the clients that are a little harder, and we still want to get our clients to keep business and personal separate. Have them open up a separate bank account or a debit/credit card. If they go through Office Depot and they buy some office supplies as well as schools supplies, have them ring it up as two separate transactions to make things a lot easier. These are the kind of things to look for.

Also, look for a client that you have a good relationship with them. Some of your clients, especially some you've had for a long time, it's going to be easy to talk to them and say, "Hey, client. I want to switch to this new value pricing. Here's what I want to do. If I look at your fees over the years, this is what it comes out to be on a monthly basis. We're going to switch. We're going to convert. We're going to start doing this. I want you to give me feedback. We're going to re-evaluate each month or each quarter how things are going." You always should be evaluating these things on a regular basis, but it's helpful, when you're getting started, to do it with a client that you already have a good relationship with. Those are some ideas to help you get going there.

I had another question here. What's the best way to handle a client that's insistent on using a different accounting software from what I use? You know what? That's a great question, Sarah. It's up to you. Let's say that client has been using QuickBooks Desktop and you want to switch them to QuickBooks Online. One of the things that I found is share that sample file with them. In QBO, there's a sample company file that you can get access to. Share that with them. Go in there and talk to them. Let them see how that could work. Maybe even set up a trial for them to let them see their own data in there.

One of the things that I found is when you talk to your clients about something, it's not the same as showing it to them. A good example of that ... I had a client that I wanted her to do remote access, and she's like, "Oh no, I can't do that. I can't do that." I had come on-site to do something, and then at the end of our session, I said, "Okay, Cheryl, let's go into the kitchen here. You bring your laptop and I've got my laptop. I want to show you how this works." I sat there right next to her at the kitchen table and I invited her to do [Join.Me 00:43:01], which is the absolute easiest when you have clients that are tech-challenged. Join.Me is the absolute best for some of those clients. I showed her how it worked and how easy it was and she's like, "Oh my gosh! You're right, that's wonderful. That's awesome." I haven't been on-site to see her since. I still talk to her quite a bit. We still have a great relationship, but I don't have to drive over there anymore. I don't go on-site anymore. I had to show her that.

If your client has been using the Desktop version or using another version or another accounting program, show them. That's the best way. Set up a Join.Me remote session, go through it with them, let them play with it, let them see it, talk to them about it and that alleviates their fears, their anxieties and things like that. I just found the best way is not talking to them about it, but showing them about it, and then talking as you're showing them how it works, how easy it is ...

Somebody else said somebody uses [Team Viewer 00:44:01]. Yeah, there's lot of things that you can use. There's GoToMyPC, Log Me Anywhere, PC Anywhere, Team Viewer. I like Join.Me because it's free and it's absolutely the easiest one that I've found for clients who are tech-challenged. You tell them type Join.Me into the URL where you type in a website, type it in, hit enter, hit the orange triangle, the orange circle there, and then give me the code that looks like a phone number. It's really quick, it's really easy. There's a lot of them out there, so you can use different things there.

Somebody else says, "Would you charge more for a client who's using Desktop than Online, or one who's insisted on transferring files?" Yes, Don, I would, because if they're insistent on transferring files back and forth, that's cutting down on your productivity and your efficiency. That's other stuff that you have to deal with, so yes, I would say that their fees need to be higher versus QBO because you don't have any of those problems or issues when you're working in QuickBooks Online. I would charge more for Desktop clients.

Good questions here. I'm trying to scroll through some of the others. What is the most safe system for sharing software? I like QuickBooks Online for using the same software. I think QuickBooks Online is more safe in a lot of ways. It's safer than a computer in your own office or in your client's office. Intuit spends millions and millions of dollars on data security and securing their data centers and all that, so their security is actually better and safer than your own desktop, so I like QuickBooks Online.

Let's see, oh, he says, "No, I mean Team Viewer [in those 00:45:45]. I think all of those are fairly secure. I don't know without getting in and looking at it, but when I'm doing the remote stuff, usually when I'm doing that, I'm not looking at sensitive financial information, so that's something. If you're dealing with looking at credit card numbers or Social Security numbers, then you might need to worry about that a little bit better.

Great questions there. Let me see if we've got a couple of other questions here. Let's see. We've got a lot of questions here about the slides and yes, they're going to take care of that. "I have a number of really small clients. Is the Wholesale Pricing available for the basic QBO package?" [Vienna 00:46:28], it's not available for Simple Start. It's Essentials and Plus. Simple Start, or Easy Start, if you're in a different country ... QBO Simple Start is only $13 a month, and you could look for a special there. I saw Office Depot ... A week or two ago, Office Depot had a special where it was free for the first year. If you're going to go that route, look for some specials. Intuit has specials all the time, like I said, with the 30 percent off or 50 percent off ... You might want to watch for specials on those Simple Start or Easy Start, if you need that.

"Would you cover on-site work compared to remote work? I feel much more comfortable doing all this work from my home office." Absolutely. One of the things that I've discovered is more and more of us are doing the work from our home office and not going on-site anymore, especially because you can get receipts or documents from your clients with a file-sharing service. A lot of us are doing that and if you do need to go on-site, people are charging a premium or an on-site fee. I used to, back when I did go on-site. I used to say the minimum, if I come on-site, the minimum fee is going to be a two-hour consult. Some people charge travel fees depending on if you're in the city and it takes longer to get places or it's rural and you have to travel farther to get there.

Yes, a lot of people charge more for on-sites and that helps, too, when the clients see it can be less. Once they see how you can work together with them in QuickBooks Online, I've found that they're a lot more open to that, especially when they realize that they have access to all the reports whenever they want them and they can enter things on their phone if they want to enter an invoice on their phone. They can do that if they need to, as well.

Great questions there. Let me see if we've got any other ones here. "What is the file-sharing service you're talking about with client receipts?" One of the things that I do with the clients, they always have their phones with them, right? They have a smartphone most of the time now. Train them to take a picture of that receipt. Whenever they buy something for business, bam, take a picture of it, because the IRS and the CRA in Canada and stuff, they will accept those digital images now as a receipt. Have them take a picture of that receipt and then periodically, perhaps once a week, plug their phone in, they take all the pictures of their receipts and they save them to a particular folder. You may want to have your folders by month, but then you can use a file-sharing service, like Dropbox, Sugar [inaudible 00:48:51], Box, Google Drive, iCloud, ShareFile, LeapFile. There's a whole bunch of file-sharing services.

You don't have to worry about the security as much when it's just a receipt because there's no sensitive financial information. Dropbox, all those, they all have free services available, too, like Google Drive and them ... They all will give you a couple gigabytes free. The client can save those receipts into that folder and you share that folder so then you have access to those receipts, as well. It makes a great way to get that information from them. Do not ever put a QuickBooks for Desktop ... Don't put that working company file in a file-sharing service like Dropbox. It will cause data problems.

There's a few things that will help you there, as well. I'm going to talk about the engagement letter and then I'll have some more time for questions again in just a minute. Keep typing your questions in, but I want to go ahead and make sure we talk about the engagement letter, as well, because this is really important.

It's very important that you have an engagement letter, a letter of understanding, whatever you want to call it, because we want to clearly define the services and the support that's included in your monthly fee. This is a great tool to make sure that we're clearly communicating with the client, as well, what's included, what exactly are we doing? That way, you need to identify what are possible add-on services. For example, let's say you've got the monthly accounting/bookkeeping and all this stuff. Then the client decides to do a bank loan. Preparing documents or doing things to help them to prepare for a bank loan might be outside the scope of work, so you'd want to make sure to include that. If they need cash-flow planning and forecasting, that might be outside your basic monthly services. If they need emergency stuff on the weekends, do you want that to have to be an additional fee or is that included with your premium package?

You want to go through and set up a menu of here's my basic services and my basic packages. Here's my add-on, or ala carte, if you think about it that way. You guys are all familiar with menus. You're creating a menu of your services, what's included in your standing packages, how can you bundle things, how could you include training and setup with the basic package or is that a separate ala carte thing? These are things to go through. Write them out on paper or type them up with Word and play with it, coming up with your menu of services, if you will.

You want to make sure that you clarify what's included and what's excluded. What's an additional add-on service. This, again, is a great way to communicate with your client. You also need to communicate with the client if there's certain key things that you need. Let's say one of the things is you promise a turnaround by XYZ date or you promise that their monthly stuff will be all reconciled and good to go by the 5th work day of the month or whatever it is. That's contingent upon maybe you getting the receipts from them or you getting the information you need. You may need to put some of that stuff in there, as well. What is the stuff that the client has to do in order for you to meet your services and to meet your deadlines and things like that?

You should have errors and omissions insurance. This insurance will cover you against if you do things wrong, things like that. Most of the insurance providers will provide you with a sample engagement letter or with a template that you can use. Reach out to your insurance company for a template that you can use and customize for your own.

Also, you want to include details about the payments. How are you going to get paid from your client? We don't wait until after the fact anymore. You want to be billing upfront just like lawyers bill a retainer up front, and you work off of that. You want to set up some automated payment, so you want to make sure you're getting paid automatically. You may set it up to where it automatically does the payment at the beginning of the month or on the 10th day of the month. Whatever you and the client work out, but make sure that you've identified that and you get it set up so it's automated.

The other thing you might want to consider in your packages, and for good clients ... Instead of a monthly payment, you might want to give them the option to do it weekly or maybe twice a month. You can negotiate that with your clients if you want to. If they need to spread it out on a weekly basis to help with cash flow, that might be something that you could offer as an additional benefit for your clients.

Also, you want to make sure that you include the provision to re-evaluate this on a regular basis. We aren't going to just set this up and forget about it, especially when you're new and you're moving over to value pricing and fixed fees and things like that. You need to re-evaluate this on a regular basis. Monthly might be too short, because months can vary and especially if your client is seasonal, you need to take those things into consideration.

Also, you need to consider whether the client is growing. Are they a rapid-growth client or are they a pretty stable client, pretty consistent? Are they seasonal business? All of these things you need to take into consideration and re-evaluate on a regular basis, perhaps quarterly, perhaps twice year. At a minimum, once a year, you need to be re-evaluating this and every single year, you should be increasing your fees or your prices. Increase them on an annual basis. It doesn't have to be a lot, but at least two percent, three percent, five percent, because the cost of living keeps going up, things keep going up, and you don't want to get behind.

What I've seen a lot of people say is, "Gosh, I realize now, my rates are way too low. I need to increase my fees 25 percent." Your clients are not going to like that. Get the clients used to having rates go up every year. That's what other businesses do, that's what we should do, as well.

Let me look at some other questions we have here. Not sure if they understand they can scroll the questions that have been asked and answered so that they can see them. You guys can scroll up and down through there to see the questions and the answers and things like that. The ability to photo a receipt ... Is there a way to automatically send that into QuickBooks? You can't automatically do it, but you can attach documents in both the Desktop version and in QuickBooks Online. You've got a folder of those receipts, and you can attach that to that transactions in QuickBooks. It's not automatic, though. You have to attach it, unless you're using an app. There are some apps, like [Concur 00:55:20] that will help with some of that stuff, but you need to attach it yourself there.

Let me see a couple of these other ones here. When speaking with a customer service rep, using the Wholesale QBO, we own the company file and not the client. What are your thoughts about this? When you set up the Wholesale Pricing, you are the master admin, not the client. If the client decides to leave you or if the client goes out of business, you can take them off of your subscription, so that you're not there anymore. If the client decides to leave you and go to another accountant, you can transfer the master admin to the client at that time. It's not a problem. You can take them off, you can transfer the master admin, and take them off of your Wholesale subscription, whatever you need to. You just have to make sure to pay attention to that.

Can I provide a sample engagement letter? Check with your insurance company for a sample engagement letter. There used to be some out there on the Intuit website, but they rearranged the website and they updated it and I don't have a link for that at this time. Just Google "engagement letters," accountant engagement letters, bookkeeper engagement letters ... I'm sure you'll find lots of engagement letters out there. The best thing to do is to talk to your insurance company and see if they have one because you want to make sure you're involved with that.

Very secure file-sharing sites for sensitive data. Jeanine, that's a very good question. ShareFile, LeapFile. Those two are very secure client portals. ShareFile or LeapFile. Those are affordable, secure client portals. When it comes to some of the other ones like Dropbox or Google Drive or things like that, I am not positive about their security level, especially when you upload and download that information. That's something that you'd want to check into, but I know ShareFile and LeapFile are secure portals for accounting professionals that are affordable.

How do you make the packages appear as professional as the accepted hourly rates and not look like a burger menu? This is a new area for a client and it makes sense that it may not be viewed correctly by clients. That's where, Lori, you may have your basic menu. You have your basic menu. You may have a couple of add-on services or ala carte, if you want to. All of the, you should have a little asterisk by so it doesn't get overwhelming. The little asterisk may say, "This may vary depending on the complexity of your accounting needs as well as the volume of your activity." You may have a complex menu that you look at, but you may not present the [inaudible 00:58:05] to your client. It keeps it simple for the client with that little asterisk on there where you can talk about it more. You're right, you want to make sure that you keep it clear and concise for the client, but then you may have more details that you have available.

Let's see if we've got a couple of other questions here. Somebody else uses [SmartVault 00:58:23] and FileZilla for file transfer. Yeah, that's great, too. Let's summarize here and then I'll take a look at a couple of other questions now, but we are getting close to our time here. Let's go through and summarize. Hopefully, I've given you a good understanding of value pricing and some of the benefits. We talked about some steps to start implementing it, how to start creating some of those packages of your standard services. We talked about implementing the use of Wholsesale Pricing for QuickBooks Online, how to determine some price levels or ranges. We also talked about the Intuit Billing Rate Survey and how that can apply to value pricing. We identified how to identify some initial clients to convert, as well as understanding the importance of that engagement letter.

The engagement letter is critical, not just for communicating with the client, but also to protect you in the event of any misunderstandings or things like that. You really should have an engagement letter with your clients, as well as just because a lot of your insurance company or your insurance providers may provide you with that.

You're going to get a little thing where you're going to provide your CPE keyword. You'll get a pop-up that's going to ask you to provide that CPE keyword. You'll get a pop-up survey. You'll answer that survey and hit enter or submit. I'll let you do that and let's see, as we're going through here ... You're entering that. Let's see if we've got a couple other questions while you're answering the CPE keyword.

Some advice on clients who want me to handle both business and personal. Does anyone do [best 00:59:57] or is it best to stay away from personal? Jeanine, there's no reason you can't do the personal from them. I would charge them just like it's a business. I would set up two separate companies or two files or you might consider using cvlasses. It just depends on the situation, but you can definitely do personal, as well.

For firms using [Cheatsheets 01:00:16], if they want to shift to value-based pricing, will there be any problem now that they've invested in the app? No, that shouldn't make any difference. Just because they're using [inaudible 01:00:30] using an app, your pricing is separate from that, so that shouldn't be a problem. You can do that.

Engagement letters are important as you need to cover yourself as well as defining the scope of services or responsibilities for both you and your client. Absolutely, Cathy. They are very important for protecting both parties, both the client and the accountant.

Let's see what else we have. What is the keyword? I'm sorry, I can't provide you the keyword. I can't do that at this time. How do we set up the auto payments? You can go through that. If you accept merchant services, there's usually an option that you can go in there and do a recurring transaction through merchant services.

Did you guys all get your CPE question answered? If so, I was going to ask you ... Yeah, there we go. I want to make sure to remind you about some other upcoming webinars that we have. If you'd like to join me for the the Success in the Cloud series, that's a great one. Lots of free webinars coming up that I'd like you to join me for some of those, sponsored by Intuit Academy.

Also, upcoming, we have Appify the Processes, where we'll talk about some different apps to integrate with QuickBooks Online and QuickBooks Desktop. Ultimate Accounting D-Con is coming up, as well. If you want to join me for some of those things, that would be great. I do see that we are over the time limit, so for those of you that need to jump off, thank you very much for joining me today. Glad to have you on this webinar with me. I will look through some of the other questions here and see if there's some other things that I can answer in the next few minutes.