If you’re an accountant or bookkeeper, then chances are at some point you’ve had to figure out how to create proposals and pricing strategies for your accounting firm. In this inaugural episode of Gearing Up Season 2, we tackle an age-old debate in the accounting profession: value-pricing vs. selling an hourly rate.
For those of you watching for the first time, Relay is a business banking and money management platform designed for accountants and their clients, and we’re obsessed with making firms more effective and efficient. Gearing Up, hosted by Blake Oliver, CPA, is dedicated to amplifying the creative and smart ways accountants and bookkeepers overcome the day-to-day challenges of running a successful firm.
In each episode, we ask a practicing accountant or bookkeeper about one challenge they faced in their firm and how to solve it. If you’d like to share your knowledge on an upcoming episode of Gearing Up, submit your challenge + solution using the form.
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Our guest for this episode is Jeremy Wells of JWellsCFO, an accounting firm specialized in helping small business owners maximize their tax savings and build better businesses. Jeremy has over six years of experience in the tax industry; he’s a CPA, an IRS Enrolled Agent, and holds both a Masters in Accounting and a PhD in Political Science and Government.
In this article:
Proposals and pricing for small business bookkeeping services: Gearing Up episode #10
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Accounting firm spotlight: Jeremy Wells of JWellsCFO
With over a decade of experience working in higher education, Jeremy is a former college educator turned accountant. He is an enrolled agent and CPA licensed by the state of Florida.
For those that don't know, an enrolled agent is a license that's granted directly by the Internal Revenue Service (IRS). It empowers bookkeepers to represent clients on tax matters and is similar to the power that CPAs have, as far as working with clients on their individual or business tax matters.
Accounting software and technology stack
A self-proclaimed “ecosystem kind of guy”, Jeremy favors apps that are built by the same developer. As far as hardware goes, he is an Apple guy. Jeremy is fully integrated into the Apple ecosystem with a watch, iPhone and MacBook, and he applies a similar approach when it comes to his accounting software.
The Intuit ecosystem: QuickBooks Online, QBO Payroll, ProConnect
Jeremy’s accounting tech stack begins with Intuit’s QuickBooks Online. For most of his clients, whether they need help setting up books or come with an established accounting system, he uses QuickBooks Online.
On the tax side of things, he uses ProConnect, Intuit’s cloud-based tax preparation software.
Client management tools
When it comes to client management and proposals, Jeremy uses Ignition (formally Practice Ignition) to send proposals, onboard new clients and manage client billing, and Karbon templates to manage tasks and communicate with clients via email.
Additional firm tools
Rounding out his tech stack, Jeremy also uses:
Slack for internal firm communications
Zoom for client meetings like presenting financial reports or presenting a summary of their tax returns
Loom for screen recordings
Transitioning from higher education to running a bookkeeping business
With an incredible journey from academia to the accounting profession, Jeremy is not your typical firm owner. While there were initial challenges when he first started his firm, Jeremy has successfully taken learnings from his days in academia and applied them to his accounting practice.
The secret to his success? His attitude towards client relations.
And while the act of marketing, networking and growing his client base took some work to learn, Jeremy was always been an expert educator.
Once clients signed up, Jeremy’s experience working with students helped him communicate the importance of his accounting services to new clients. To this day, he continues to focus on education and explanation, breaking down aspects of taxes, accounting and general business concepts to bookkeeping clients in order to help them see the value of his services.
Challenge: How to create proposals that attract new business
Building a practice from scratch can be difficult. Over the years, as Jeremy has grown his business, he's discovered the critical role that proposals play in getting clients in the door.
For those just starting out like Jeremy once did, you know how daunting pricing and proposals can be to firm owners. Not to mention, most accountants and bookkeepers are not skilled at sales. In fact, most of them don't wanna touch it within a 10-foot pole. So how do you price your accounting services and how much should bookkeepers charge?
In his early years, Jeremy had a lot of help from his mentor, whose firm handled his billing and helped refer clients to him. But when he decided to branch out on his own and file tax returns himself, he needed to figure out a system that worked for him.
One of the amazing yet difficult things about building an accounting firm, especially a remote one, is that there aren't a lot of restrictions on what you can promise client. You can include everything from basic bookkeeping and reconciliation to advisory services, business coaching and everything in between.
As an accountant, it’s important to get really clear on what exactly what you want to offer, then put together a package that communicates the value you can bring clients. For Jeremy, he didn’t want to just do tax returns for clients. He wanted to help clients grow their businesses and truly understand their finances.
Solution: Using Ignition to create online proposals and win new clients
Once Jeremy figured out what he wanted to sell, he used Ignition to help him create online proposals. While it was initially expensive to onboard, over the years, Ignition has become a keystone tool for his firm.
Much like how Jeremy tells his clients to consider his bookkeeping services as an investment, Ignition was a big investment that:
Reduced admin time in his firm
Replaced the need for a physical office, allowing Jeremy to create engagement letters and scopes of work online
Saved his firm time and money in the long run
How to structure a new client engagement proposal
When Jeremy started writing up his own scopes of services and descriptions, he immediately realized that it was critical that he communicate the inherent value of his services clearly in his proposal. In many ways, proposal writing is like copywriting. You need to understand what your clients are trying to achieve and pitch how you can help them achieve their business goals.
“I'm not just doing bookkeeping for you because you asked me to do a bookkeeping for you, right? I'm doing bookkeeping for part of a greater good, so that you can understand your business better, so that we make tax season easier for you and me, less stressful, right? All of this goes together. And so for me, all of that combines into one price and one set of services that's gonna get you to that desired result.”
The problem with creating a long list of add-on items and adding them to the proposal is that clients will typically pick out things that they don’t think they need. Instead, package things together into one value-based, monthly package. Not only does this put you in a position of strength with it comes to pitching your services, but it can also improve close rates and the monthly value of clients.
“I'm the expert, this is why you're hiring me. I'm the expert. You don't want to deal with any of this, right? You're done trying to ad hoc, put this together on your own, you don't wanna spend hours of research figuring out what it takes to set up payroll in your state, you don't wanna spend hours of research figuring out what an S corporation really is and how to make it work. You'd rather just me do all that for you. So if you'd rather me do all of it for you, here's what it's gonna take. Take it or leave it.”
Pricing accounting services: Fixed monthly fees and value pricing
Many service-based professions like accounting, law and consultant continue to be dominated by hourly rates. But in recent years, accountants and bookkeepers have debated the subscription business model versus the traditional business model of accounting firms, which is selling time.
For Jeremy, rather than selling time, he believes in fixed pricing. As someone who entered the accounting field late, the concept of billing time never really made sense to him. In fact, to this day, whenever Jeremy needs to hire a plumber or an electrician, the separate line for labor, infuriates him.
“We had a plumber come fix our toilet, right? That we thought was leaking. And we get a bill for $200 after the fact, three days later and I'm sitting there thinking, boy, in that moment, I could have easily paid two, three, four times that 'cause I don't know how to fix a leaky toilet, right? And I'm happy to pay what I think is the lower amount, but at the same time as a business owner and as somebody advising other business owners, it drives me nuts.”
In many ways, Jeremy’s previous life as a senior lecturer has helped to shape this value-pricing belief. Afterall, universities are good examples of value pricing. If you actually calculated the cost of education down to the hour, nobody would buy it, but instead, we invest in an outcome, which is a university degree.
Jeremy believes accountants should think of themselves in the same way. Instead of selling hours for accounting services, they should sell a packaged degree with the goal of helping business owners grow this business.
Connect business banking with your accounting tech stack
Relay centralizes day-to-day banking, accounts payable and big-picture cash flow management into one operating account for each of your small business clients.
With Relay, you can:
Reconcile accounts faster with reliable bank feeds that sync directly into accounting systems like QuickBooks Online and Xero
Log in to client accounts securely with permission-based credentials
Speed up reconciliation with ultra-detailed transaction data
Pay bills directly from your client’s account using ACH transfers, domestic and international wires and checks
Automate accounts payable and approval workflows with Relay Pro
If you want to make tax preparation and year-end less stressful for you and your clients, start with your business banking. You can apply for a Relay account in minutes.
Get in touch with Jeremy Wells, CPA
Big thank you to Jeremy Wells for joining us for this episode of Gearing Up. For anyone looking for tax, payroll or bookkeeping help, you’re welcome to reach out and schedule a free consultation with Jeremy.