Bill What You're Worth

• Introduction
  • Once Upon a Time in the Ukraine
  • Why Some Accountants Earn Much More Than Others
  • Three Top Reasons Accountants Do Not Earn Enough
  • A Word About Terminology
• Chapter 1. Pricing Methods in the CPA Profession
  • Cost-Driven Prices Versus Value-Driven Prices
  • Pricing and Risk
  • Cost-Driven Rates Versus Target-Driven Rates
  • Investment Versus Value
• Chapter 2. How Much Do You Really Earn?
  • The Partnership and Generally Accepted Accounting Principles Problem
  • The Financial Analyst's Dilemma: Generally Accepted Accounting Principles Versus Economic Reality
  • Analyze the Profile Firm
  • The Key to Improving Profitability
• Chapter 3. The Pricing Myths
• Chapter 4. How to Set Prices
  • Chargeable Time or Billable Time?
  • Five Factors That Affect Your Prices
  • When to Use Value Pricing
  • When to Use Results Pricing
  • When to Use Fixed-Price Agreements
  • Packaging Your Services
  • How to Raise Prices
  • Unleash the Power of Unconditional Service Guarantees
• Chapter 5. How To Discuss Prices With Clients
  • Train Clients to Pay You Well and Promptly
  • What "How Much Is This Going to Cost?" Really Means
  • Turn a $438 Sale Into a $238 Sale Without Really Trying
  • Do Not Make It Look Too Easy
  • Your Pricing Communicates Your Value
  • How to Use "Cottle's Law" and "Cottle's Corollary"
  • The Problem With Price Estimates
  • How to Avoid Professional Panic
  • Ask for a Deposit
  • Be Flexible
  • The Preferred Client Approach
  • Five Important Tools in Negotiating Prices
  • How to Handle Price Objections
  • How to Handle Procrastinators
  • How to Handle Price Complaints
• Chapter 6. Build a Better Firm With Better Clients
  • Why Are You in Business Anyway?
  • How to Recognize a Good Client
  • Evaluate Clients Realistically
  • Pick Your Five Worst Clients and Fire Them or Upgrade Them
  • Fire the Least Profitable Clients
  • Increase Your Minimum Individual Income Tax Price
  • Raise Prices on Aggravating Clients to $200 Above Standard
  • Give your "Widows and Orphans" to Another Accountant
• Chapter 7. Seven Causes of Unplanned Write-Downs and How to Avoid Them
  • What Are Write-Downs Really?
  • Cause 1: Estimating the Engagement Incorrectly (Miscalculating the Cost to Do the Job)
  • Cause 2: Not Specifying Clearly What Is Included in the Price Estimate and What Is Not
  • Cause 3: Inefficiency (Sometimes Laid at the Feet of the Employee's Supervisor)
  • Cause 4: Bad Scheduling
  • Cause 5: Bad Supervision
  • Cause 6: Inadequate Skill in Managing the Client Relationship
  • Cause 7: Unwillingness by the Accountant to Confront the Client
• Chapter 8. How to Set the Right Standard Chargeout Rates
  • Why the 2-Percent Rule Is Dead
  • Three-Step Formula for Setting Standard Chargeout Rate
• Chapter 9. Motivating Staff to Bill What They Are Worth
  • Define Chargeable and Nonchargeable Time
  • Use the 50-Minute Hour
  • Adopt Daily Time Reporting
  • Round Up, Not Down
  • Use Peer Pressure
  • Require Second-Owner Approval on Substandard Invoices
  • Invoice Promptly
  • Invoice Progressively
  • Let Employees Draft Invoices
  • Do Not Compromise on Prices
• Chapter 10. Get It In Writing
  • Engagement Letters
  • Change Order
  • Use the Invoice to Sell the Service
  • Client Termination Letter
• Glossary
• Bibliography of Recommended Reading, Listening, and Viewing
  • Books
  • Audio Programs
  • Video Programs
• About the Author

Why Some Accountants Earn Much More Than Others

When it comes to economic opportunity, the accounting profession is the proverbial level playing field. All the players have about the same education; they possess well above-average intelligence; it only takes a few thousand dollars of capital to start a practice; and most accountants practice in similar marketplaces with similar economic conditions. In other words, the profession truly has equal opportunity.

Then why do some accountants make so much more money than others?

• Is the accountant who makes $400,000 a year twice as smart as one who makes $200,000? Not likely.
• Does the $400,000 accountant work twice as hard? No way!
• Has the $400,000 accountant simply been in practice longer and thus have a head start? Sometimes, but not always.

Then what does account for the wide differences in financial performance between accountants?

Key Point: In a competitive marketplace, the quality and performance of management determines the ultimate success of the practice. Actually, in the long run, the only competitive advantage an accounting firm can have is the quality of its management.

A few firms thrive in today's volatile environment, firms that grow in depressed markets, firms that far outstrip their competition, firms that enhance both the quality and the quantity of their services to clients, while they earn appropriate – even amazing
– profits.

You can do this, too. But you have to know what to do differently from what you have done in the past.

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