In April, Insightful Accountant's editorial theme centers on "Pricing Methods & Invoicing Practices." As I begin my first of several articles on this topic, I find myself going back to an article I wrote just before 2022, titled "Are You Charging Enough? Are You Charging What You are Worth?"
The article was a summarization of what was then the new Intuit® Rate Survey of ProAdvisors published in Heather Satterley's blog, "The Results of the New Intuit Rate Survey Are In"* within the Intuit "Firm of the Future Blog."
I don't think I can start discussing Pricing Methods and Invoicing Practices related to ProAdvisor—or even the businesses that ProAdvisors support—without exploring the scope of that rate survey in terms of what it identifies as the specific invoicing and pricing methodologies ProAdvisors reportedly use.
While our editorial theme will not be focused so much on how much ProAdvisors are charging, it will be concerned with the methodology. For example, if we focus on the Intuit® Rate Survey, our methods will include the four billing practices upon which their survey was conducted.
So, these are reasonable starting points for Insightful Accountant's exploration of this month's series.
The Intuit® Rate Survey was conducted based upon service offerings for the following' billing practices:
- Hourly billing: Based on the hours worked
- Value pricing: Based on the maximum amount a client was willing to pay for a service, with that amount typically set before the work was initiated
- Value billing: Defined as marking up (or frequently marking down) client invoices after the work was performed
- Fixed fee: Typically estimated based on hours (or costs) to perform (complete) the work
Of nine service-related areas surveyed, five of which were considered QuickBooks-related, and four of which were considered Other-services, Hourly billing was the most prevalent practice among surveyed ProAdvisors (and other participating professionals). Only the areas of Payroll and Tax Preparation showed a billing practice method favoring Fixed fee, and in those two areas, Hourly billing' was the second most prevalent billing practice.
Despite all the hype, training, prime-time speaker engagements, articles, and instructional seminars and webinars, ProAdvisors still favor hourly billing of their clients for most QuickBooks (and other) services they provide.
If there is an area of QuickBooks work drawing close to flipping from hourly billing to fixed-fee, it appears to be QuickBooks Set-up. It is an appropriate trend, in my opinion. Setting up a new QuickBooks account (Desktop or Online) has become so routine and straightforward that a fixed-fee amount just makes sense in most cases.
Because ProAdvisors still are using time-based hourly billing, and Insightful Accountant already covered dozens of time-tracking software apps in February (2022), it certainly does not make sense to cover the time tracking aspects of hourly billing as part of our April Pricing Methods and Invoicing Practices editorial emphasis.
Accordingly, we will focus on apps that can help you automate or streamline invoicing and speed up your cash flow by improving customer payment time.
Please stay tuned over the next few weeks as I review a dozen or so apps, and discuss related issues that potentially can help you in your QuickBooks practices.
Footnotes:
* - The 2021 Intuit® Rate Survey as published within the Intuit Firm of the Future Blog article titled, 'The results of the new Intuit Rate Survey are in' by Heather Saterley, CPA, MSI. Portions thereof have been adapted or incorporated with modification within this article. Adapted source materials related to said content within this feature by Insightful Accountant is furnished for educational purposes only.
As used herein, QuickBooks, QuickBooks Online (QBO), and QuickBooks ProAdvisor refer to one or more registered trademarks of Intuit Inc., a publicly-traded corporation headquartered in Mountain View, California.
Any other trade names used herein refer to products which may be registered or trademarked, or otherwise held by, their respective owners. They are referenced for informational and educational purposes only.
This is an editorial feature, not sponsored content. None of the vendors within this article have paid Insightful Accountant or the author any form of remuneration to be included within this feature. The article is provided solely for informational and educational purposes.
The publication of this article, nor inclusion of this product within the related series, does not represent any endorsement by either the author or Insightful Accountant.
Like what you're reading?
Subscribe to our FREE newsletter and we'll deliver content like this directly to your inbox.