But that’s not always how it’s worked in the professional services sector – and this applies even more to creative agencies.
There are three main approaches to how you charge fees to clients in professional services. And we think it’s time to stop watching the clock and start delivering value.
Bill your clients based on the time you spend?
Time: it’s nice and easy to measure and it gives you a breakdown that shows how long everyone spent on a job. But, ironically, recording time is actually quite time-consuming. And time is rarely something that your clients are interested in.
- Everyone has to log their time, often drilling down into 5-minute sections.
- This is tedious and wastes time that could be spent on the job.
- This desire to break everything down into time can really stifle innovation.
- Your clients don’t care how long it takes – they just want the job done.
Clock-watching and recording every minute spent can breed frustration and actually end up losing you clients. ‘Why did it take you that long?’ and ‘What if I could get someone to do it in less time, and then it wouldn’t cost me so much?’ are questions you’ll hear from clients who are really just concerned about you delivering what you agreed to.
And measuring time also focuses the client on the money they’re being charged, not on the value they’re receiving. So, what’s the alternative?
Base your price on value, but measure your time?
If you said to a client, ‘Would you rather we deliver value and a job well done, or a rush-job done to a time limit?’, I think we all know which of those two they’ll go for. Clients are interested in value and quality results. So that’s a much better way to work out your fees.
- Work out the value you give and give it a price.
- Measure your time internally, but don’t send this to the client.
- Use this time measurement to track time spent and profitability
But, again, this means watching the clock. The client may not see this time tracking, but clock-watching is still stifling your team’s innovation, focus and profitability. You’re still thinking about costs – not creativity.
So, why not just throw your watch out of the window and focus on the job, not the time?
Base your price on value, but forget about the time!
Tracking time and focusing on costs holds you back. Our clients have no interest in the number of minutes we spent on their VAT returns, for example; they just want to know that they’ve been done and that we’ve added this value to your business.
The same applies to your clients. If you’re a graphic designer, or a website design agency, you might feel this even more strongly. You know that you’ve spent the entire weekend coming up with the best design options around – but it doesn’t matter if you got the design brief wrong, or they just don’t like the colours. It’s back to the drawing board.
So why not forget about time and, instead, focus on adding value? This is the option we use at My Accountancy Place, and here’s why:
- Some practices focus on the minutiae of the work being done.
- We prefer to build expectations around the results you receive.
- We focus on the value we deliver: on how much we’ve helped your business
As one example of this, our internal goals are to have all companies’ tax returns completed within three months, and your personal tax return within one month. If our team takes a long time to do that, or a short time, that’s our responsibility. It nets out over the long run and we become more efficient.
We’re about making you happy
Our primary goal is for you to be happy. And happiness comes from getting the results you need – your taxes filed, your finances clear and understandable, and practical help and guidance provided for you and your business.
If we charge you by the hour, and focus on time rather than results, it can breed frustration for you and for our team. We use Key Performance Indicators (KPIs) to measure how we’re performing, and the fundamental focal point of these KPIs is client satisfaction – that’s our all-time, number-one area of focus.
If you’re happy, we’ll be profitable. Guaranteed.
And if you do the same for your clients, then if they are happy, you too will be profitable.
Guaranteed.
