Why Consultants Undercharge for QuickBooks Consulting

To get the fees you deserve, you must help your clients to understand the value of their financial information.

QuickBooks is by far the most affordable and user-friendly accounting package on the market today, leading many small businesses to assume that a $200-$500 software purchase is the only investment required to maintain accurate financial information for their company.  As the non-accountant's accounting software, QuickBooks has greatly simplified the bookkeeping process, but no accounting package, however user-friendly, can be operated properly without a sufficient understanding of the basic bookkeeping process and the regular support of an accounting professional.

Continually reinforce to your clients (and prospective clients) the distinction between the retail value of the QuickBooks software with the value of the financial information stored in the software. Though QuickBooks is a very valuable computer program (in my opinion worth significantly more than the current retail price) the value of the program itself cannot begin to compare with the value of the information stored within the product. Make sure your clients understand that their financial information is essential in the measuring the financial health of the business, in making informed management decisions, in managing the company's relationships with its customers, supplies, and employees, and in the timely and accurate filing of sales tax, payroll and income tax returns…just to name a few. In other words, maintaining accurate financial information has perpetual value as well as perpetual cost. Once they understand the value, they will be inclined to respect the cost.

To get the fees you deserve, you must also avoid the following common pitfalls:

Reacting to Cash Flow Problems. With a lack of prospects and the pressure of mounting bills, consultants tend to become desperate for any additional billable hours, even at below market fees. Once you begin working for the client at a substandard rate, it will be difficult if not impossible, to significantly raise fees for that particular client. It also presents a problem when the client recommends you to others who will also expect the same low fees. To stay in business, you must maintain operating capital, but you must resist the temptation to lower your fees just to get business.

Blindly Entering into Fixed-Fee Engagements. If you provide consulting services on a fixed fee basis, make sure you assess the “health” of the client's data file and the condition of the clients financial records before quoting a price. If you do not, you may find yourself quickly going over-budget, resulting an a lower realized rate/hour. (See the Sleeter Group's Consultant's Reference Guide for more information about the technical steps involved in assessing the health of a client's data file.)

Using Lower Fees to Build/Grow the Client Base. This strategy may increase the size of the consultant's client list, but can create problems along with it. Many people assume that lower fees imply lower quality. We have found that when consultants charge low fees, clients tend to miss appointments, ignore the consultant's advice, and value the services less. This often leads to an unsatisfactory engagement, and a premature end of the business relationship. With fees on the higher end of the scale, the opposite is usually true. That is, clients miss fewer appointments, heed the consultant's advice, and value the consultant's service more. The truth is, higher fees may not only bring more clients, but also better ones! If you have just begun offering QuickBooks consulting services, streamline your expenses as much as possible during the startup phase, and build a network of people who can recommend your services. This is the preferred alternative to reducing fees.

Discounting Fees for Smaller Businesses. Successful consultants base their fees on the economic value they provide as opposed to the economic status of the client. You're running a business of your own, not a charity, so don't drop your rate just because the client can't afford you. It's better to refer them to your competitor than to lower your fees.

More Tips at Our Managing and Marketing Your Practice Seminar

The tips discussed above are addressed in detail along with other practice management approaches to help you grow your practice at our Managing and Marketing Your Practice Seminar. These seminars are scheduled in 19 locations from June to November. Check our seminar schedule for the location nearest you.