Pricing Is One of the Hardest Aspects of a Business To Nail Down
You are so not alone if you struggle with pricing your products and services!
“The single most important decision in evaluating a business is pricing power... If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”– Warren Buffett
Even the most seasoned of business owners wonder and worry if they are doing it right.
My neighbours* recently retired from the restaurant business (in case you are on the fence about retiring - they say it is fabulous!).
They auctioned off some supplies and equipment and they kept some for their use. One of the things they kept was an ice machine. Not a rinky-dink little ice machine, but a high-quality restaurant one that pumps out copious amounts of crescent-shaped ice** for cocktails - and the ice, they decided to sell it***.
They have a cornered market on it.
The lake that we live on is very social and boy-oh-boy we love our docktails
We can boat or golf cart over to the resident ice machine rather than get in our cars to drive into town to buy “okay” ice
They put a note in our lake chat saying they had this mecca of ice and that is was $5.00 for a really big bag or cooler of it. Awesome, we were all in.
Then they put a note in the chat lowering their price.
Whaaaat!!
They lowered the price of a coveted product that had only dodgy competition.
They lowered their price because:
That dodgy competition was cheaper
They are really, really nice people
I’m relaying this story to you because this sounds exactly like the reasoning - for keeping prices lower than they should be - so many accounting professionals use.
Tech Tip - QuickBooks Online
- All of my template workflows include details like this, and my Standard Operating Process Guides are start to finish standards for apps and internal processes.
Don’t let the Balance Sheet become a dumping ground!
I once worked on a clean-up file that had a clearing account used solely to move old uncleared deposits out of Un Deposited Funds. And this crazy account had never been reconciled.
I am not crapping you.
Of course, unreconciled accounts like this lead to overstating income and create havoc on the Balance Sheet.
Reconcile your clearing accounts!
This goes for the likes of your payment processing app clearing accounts - Plooto, Veem, Melio and the like...
How do you avoid this?
Of course, you list accounts that need to be reconciled in your checklists (aka; workflows).
But to absolutely make sure they don’t get missed:
Change accounts that are clearing account types to bank account types in the COA, so they sit in the overview tab
And always reconcile from the overview tab
Featured Template
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15% off discount code: BLOG
Google Form questionnaires to vet prospective clients for "fit and feel".
Do you really want to spend your day with clients who don't fit?
Who don't value you?
Who don't pay you enough?
These Google Form questionnaires help you determine if a prospect is going to be a good fit. They also help you understand their business better so you can accurately price your services.
What you get:
Easy to customize to fit your process and company branding, there are 3 different versions of Prospective Client Questionnaires for you to choose from depending on your needs:
Short "vet for fit"
Medium length "we need to know more"
Long version that combines the above 2 questionnaires
Forms are one of the most powerful tools you can use to create systems, communications and automation in your firm.
Set up a quick meeting with me to discuss how I can craft up cool, custom forms to vet prospects, survey current clients, gather personal tax return information… don’t feel limited to my templated forms!
Join Your Peers Here
- Financial Cents Webbie - How To Price Your Bookkeeping Services
Thursday, July 28, 2022
1:00 PM - 2:00 PM
Shahram Zarshenas, CEO of Financial Cents, and I will be hosting a workshop where we will be chatting with everyone about pricing.
What’s going well, what’s not working, idea sharing on all things pricing.
This isn’t a Kellie & Shahram yickity-yack session; it’s an actionable workshop where you will leave with a list of quick-to-implement pricing ideas!
We will all be cameras on, mics open - this is about you, so let’s hear your voice and see your face!
Sociable
- said in your head in a loud sing-songy voice
Adam Markowitz asks “where does an accounting firm go to hire someone in-house to improve processes” in this thread.
David Leary started a thread on misuse of the words reconcile and closing the books “early” here.
Jason Staats muses “Accountants Are Too Slow To Increase Pricing” on YouTube
Future Firm is doing a summer giveaway worth over $10,000! My templates are one of the give-aways :-}
Simply yours, Kellie :-}
::Shameless Call To Action::
I sell bookkeeping templates, standard operating process handbooks and client guides.
15% off discount code: BLOG
*The wife, only one of the loveliest persons ever, reads my blog. She is going to snicker at this note and still probably not raise their price on the ice…
** In case you need a rabbit hole on ice, here you go.
***To offset the hydro of course - smart.
PS: Have peers you would like to share my blog with? Send them this link to sign up.
