Accountants should do the job
first and worry about money later. Reality: The “products”
CPAs have are time and information. Give these away and you send the
wrong message to clients and hurt your business.
Inexperienced or inefficient staff
cause write-downs. Reality: Maybe it’s not the staff. If a
job has run over budget three years in a row, it’s time to rethink
pricing.
If we raise prices, clients will
leave. Reality: Some clients are price-conscious, and you
might lose a few. Nevertheless, fees have to be cost-effective.
If you do good work, clients will
appreciate it and pay without prompting. Reality: Clients
take technical quality for granted. You have to decide what services
are worth in your area and bill appropriately.
If you don’t charge for all the
work, clients will be more likely to pay the bill. Reality:
Most of the work a CPA does is invisible, so it’s not a factor.
Last year’s billing is a good basis
for this year’s price. Reality: Not true. The client is
unaware of how your overhead changes, but you need to adjust for it.
If you charge lower prices than the
competition, you’ll get more clients. Reality: Most clients
don’t know what your competitor charges. Nor do they care.
Asking slower-paying clients to pay
is unprofessional. Reality: Clients will respect you more as
a business adviser if you run your firm in a businesslike way.
If you do ask clients to pay, they
will take their business elsewhere. Reality: If they’re not
paying, they’re not clients.
Clients appreciate it when you
delay sending them their bills. Reality: Clients prefer to
know what they owe, even if they can’t pay right away.
The amount on your time-and-billing
system indicates the fair price. Reality: Timekeeping is one
aspect of your costs, but it may have no relationship to your
service’s value to the client.
What you do can’t be very valuable
because it is easy for you. Reality: Not at all. That
aptitude may be the core of your service’s value to clients.
Source: Adapted from the Management of an Accounting Practice Handbook (New York: AICPA, 2000), chapter 203, section 203.02, “Billing Myths” by David Cottle, CPA (from Bill What You’re Worth…and Collect What You Bill ). Used with permission.