Don't Send Proposals To Clients Without A Phone Call - Banner

One of the most significant advantages of a phone call is the opportunity it provides to establish a personal connection with your client. Unlike emails or text messages, a phone call allows you to convey your enthusiasm, passion, and sincerity directly. Your tone of voice and the ability to engage in real-time conversation can go a long way in building trust.

When you send a proposal via email, you miss the chance to address any questions or concerns your client may have immediately. A phone call allows you to discuss the proposal in detail, clarify any doubts, and provide immediate response to queries.

This is not only enhances the client’s understanding but also demonstrates your commitment to their needs.

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Play Video about Don't Force Accountants To Be Salespeople Banner

Many accountants excel in their technical skills, but may not possess the same level of expertise in sales.

We have learned the hard way that some of our accountants are naturally skilled in sales, while others may not be as inclined or proficient in this area. 

It has been a valuable lesson for us to understand that not everyone should be forced into the sales pathway, as it may not be a strength for all accountants.

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Play Video about The True Essence Of Sales For Accountants Banner

During the “Pricing & Profitability CPD Workshops” tour in Sydney, Melbourne, and Brisbane, Ben Walker, the Founder of Inspire Accountants and High-Performance Accountants, took the stage as a keynote speaker. The event, organized by Chartered Accountants and Ignition, provided a platform for Ben to share his valuable insights. 

Check out Ben’s talk about “The True Essence Of Sales For Accountants”, here’s what he said – 

I have heard from quite a few accountants that they don’t associate with the word “Sales”. And I just want to encourage you, it is a function of the business to sell. Even a waiter at the restaurant, the process of them saying, would you like another margarita? And me saying, “Yes”, that’s a function of sales.

We need to think that this is a serious function of our business and that selling is caring. If you struggle with that association or that engagement towards the idea of sales, then this book by Daniel Pink, “To Sell Is Human”, is a good perspective changer on sales.

I just want to start with that because I don’t want to talk about sales when maybe you’re sitting there going, “Ah, it’s not me, I don’t like it”. It’s really not a bad thing. It took me a lot of work to understand that it’s a great thing because the client wins, we win and maybe the tax office does or doesn’t.

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Play Video about The Benefits Of Monthly Recurring Revenue Banner

Every month, we see a consistent inflow of recurring revenue which usually arrives a few days into the new month. Approximately half of our clients opt for credit card payments, while the remaining half who choose direct debit usually process their payments around the fourth or fifth day of the month.

This approach directs our team’s efforts towards enhancing our monthly recurring revenue, effectively curbing the effects of seasonality. While our revenue experiences fluctuations, this is partly due to the fact that 40% of our total earnings come from project-based sources, with the remaining 60% attributed to our dependable monthly recurring revenue.

Although some seasonality persists, it’s far from the intense lows witnessed in the past during the busy holiday months of December, January, and February.

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Play Video about The Benefits Of Full Upfront Payment Banner

We’ve adopted a policy where we request full payment upfront before starting any project, whether it’s catching up on taxes or setting up a monthly recurring service. The great thing about this policy is that it eliminates any outstanding debts or unpaid invoices. In fact, it has become such a natural part of our workflow with Ignition that we sometimes forget it was once an issue before we implemented this process.

By receiving payment upfront, we maintain a zero or even negative WIP (work in process). This means that we don’t begin work until the proposals are accepted and the payment is secured.

 Initially, we thought this might be a potential challenge, but surprisingly, it hasn’t been an issue for years. In the rare instances where some individuals had concerns about this policy, they turned out to be unreasonable. So, if you’re worried about it, just treat it as a normal procedure, and chances are things will go smoothly.

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Play Video about How To Master Value Based Pricing Strategies Thumbnail

We believe it’s important to maintain fair pricing and treat people with respect. While we do have some leverage in the market, it doesn’t justify taking advantage of others or engaging in dishonest practices.

Currently, our industry, like many others, is facing capacity challenges. Therefore, we need to be selective about the clients we work with and ensure that we charge appropriately for our services.

At Inspire, we prioritise fairness in our pricing. We invest a significant amount of time internally, including coaching sessions, to help our team navigate these conversations and truly understand the value we provide. Even before meeting with a client, we reflect on the key moments we have been there for them in the past few years. This ensures that the price we propose is reasonable and aligned with the value we bring.

If a client doesn’t accept our price, we are okay with that. We strive to detach ourselves from the outcome and respect their decision. On the other hand, if they do accept it, we are equally content. Most of the conversations our team has had with their clients result in a simple and unexpected agreement, which feels like a normal, friendly exchange.

Overall, our approach is centered around fairness, understanding, and maintaining positive relationships with our clients.

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Play Video about How To Ensure Profitability In Accounting Services - Thumbnail

We’ve never taken repricing for our clients so seriously this year. 

There’s a big reason for that. Our costs have been skyrocketing due to increasing wages, fluctuating exchange rates, and rising subscription fees over the past few years. Not only that, but we’ve noticed a few others in the industry raising their prices too

If we don’t adjust our prices for that, we will be taking a pay cut. 

If we stick to our current prices while our costs keep going up, our profit margin will either vanish or turn into losses, which we don’t think any of us would want at all.

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Play Video about $1.6 Million To $3 Million In 2 Years Thumbnail

From April 2020 to June 2022, this timeframe was coined as “Inspire 3.0” which marked the period of transition where Ben Walker became the sole owner of Inspire. 

His primary objective during this period was to mentor and elevate three Senior Accountants to the positions of partners and senior managers. The ultimate goal was for them to independently manage their own teams and clients without Ben’s direct involvement.

Over the course of these two and a half years, these accountants were able to significantly boost the company’s revenue, taking it from $1,650,000 to nearly $3,000,000. This marked a substantial growth and success for Inspire under Ben’s leadership and mentorship.

Discover your firm’s performance score and identify opportunities of low-hanging fruit to increase your firm’s profit, value and overall enjoyment as the owner of the accounting firm. 

Scorecard 5

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Play Video about How To Scale Your Sales Process Thumbnail

So, what do we put in place? 

Sales Process – It converts most of the clients you want to work with. If it’s converting all of them, that the price is probably not high enough and that there’s one thing that might be wrong. 

And if you’re not converting any, then it could be sales skills or a really high price. 

Showing the value for the client – We think part of sales is actually saying no to people who don’t fit our target client profile, whether they’re just a plan out muppet. We are going to say no to them upfront or not in the revenue range or team size or profit level.

Maybe they are too new at business for our stock standard client and whatever that is, that’s what we’ve got to work out in that product step. 

Documented Sales Process And Training – Things that helped and regular training as well. Ability for clients to test you before going all in and in terms of the ability for any of our team to know how much something costs is literally having a pricing menu and a pricing calculator.

Hourly Rates – So, we don’t do hourly rates at Inspire. We’ve got set prices for different things and it does change depending on the size of the business, the number of entities and turnover. But this has helped to scale our sales. Anyone can log in and see how much something’s going to cost.

Discover your firm’s performance score and identify opportunities of low-hanging fruit to increase your firm’s profit, value and overall enjoyment as the owner of the accounting firm. 

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Scorecard 5
HOW WE INCREASED OUR PROFIT MARGIN BY 33% (OR MORE)

I have been feeling that we need to review our prices and implement price increase at inspire. 

That is due to the way salaries, subscriptions, and other inputs to our business. 

It has been increasing over the last 24 months.

At the same time, I’d share my thought process and an insight into what happened to me and inspire in 2020. 

That time led to a price increase of 200% at the high end (but between 10 – 50% on other services).

Business Ownership

Covid had just kicked off in late 2019, but got serious in March 2020.

Throughout this time, I also had a business partnership breakdown during that same window. Not great.

After taking back full control of the business with 100% ownership, I realised we needed to change the way we’re doing things on a number of fronts. 

Over the time of having a business partner, I started to lose trust in myself and in my own decision-making process. 

Now it was just me again. 

I had to back myself like I did in my first 2.5 years of business I had on my own.

We hadn’t really reviewed our pricing over the last five years from 2015 through to 2020.

We don’t do timesheets, and we have a pricing menu and calculator that we use internally for different services.

I immediately put the base price of our compliance and proactive tax planning package from $500, to $550 a month (a 10% increase).

Our structuring services (which includes setting up trusts companies, self-managed super funds and the like) increased between 20 – 50%, depending on the service.

I felt we were too cheap for the effort and additional work we put in, rather than just setting up the company or trust itself and handing over the keys.

We also increased the cost of our advisor facilitated estate planning by $500 or so at each service level.

All of this pricing was for new clients only, and we were going to review our existing clients’ pricing coming into June 2020.

 

Now, we might be increasing our prices by 10, 20 or sometimes 50% (depending on the service) but think about what happens to the net profit margin:

Let’s say our product currently is priced at $100.

Our wage cost is say 30% or $30, overheads are 40% or $40, leaving a profit margin of 30% or $30.

Due to the events of the last 3 years, our wage cost goes up by 20% and overheads go up by 10% – that is now $36 and $44 respectively.

Our profit has reduced from $30 down to $20 if we do not change our pricing, which means we’ve lost one third of our profit.

If we increase our pricing on that service from $100 to $120, our profit on that service would now be $40 taking into consideration the rising costs (which is actually an increase of one-third in profit, compared with what we were making on that service originally).

We continued to have no pushback from new clients on our pricing, and because it was the only pricing they had seen from us, there was no framing that we had recently increased prices. Instantly, those clients were substantially more profitable.

We adjusted our pricing at the start of 2022 as well – our base price for compliance now $600/m. Other prices tweaked as well.

Coming into the start of a new calendar year, I encourage you to place consider what you might want to change about your pricing – even just for new clients.

I’m not sure about your firm, but there seems to be an abundance of new work coming in, and our limitation is around delivery and finding good team to produce enough work. So why not make the work that you do a lot more profitable then otherwise would be by increasing your prices by between 10 – 50%?

The steps I took were pretty simple (for our no timesheet firm):
  1. List out all the services in an excel document
  2. Put the current prices that you charge beside each item
  3. Think back to when you last increased your prices
  4. Consider the true value for the effort that you deliver (and I recommend adding 10% because you’ll probably be too close to the service offering to see its true value to the client)
  5. Be sure your prices increased by at least 10% on each service, as a minimum
  6. Put the document together so you can share this internally and train your team on the new pricing
  7. Ensure that you update your marketing material, including website if you publish pricing on that (and also your ignition proposals)
  8. Enjoy the additional profit margin for your new clients
  9. This should build confidence that you can have conversations with your existing clients to bring them to a similar, increased pricing structure
How We Increased Our Profit Margin By 33% (Or More)

Let me know what your thoughts are on this and what your experience has been previously raising your prices.

Also, let me know if these longer format emails are handy or if you’d like to continue receiving them in addition to the video style content that we’re used to putting together – as we may do more of it.

And all the best for this year!

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