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Since half of all entrepreneurs fail than the first five years of opening their business, and the top three reasons they fail is because they are not able to find the right customers, they run out of money, and they will are not able to find the right team. All three of these reasons are possible to create a business plan around avoiding. Therefore, if accountants are able to provide business planning to their clients, they could increase their chances of succeeding. The biggest problem with that, is that clients who have the biggest need for a business plan were also the clients who were the least likely to be able to afford a business plan. In order to mitigate that problem, the Edmonton tax accountant is Spurrell and Associates decided to change their fee structure from an hourly rate to a flat monthly fee.
The reason why they implemented a flat monthly fee is implementing a flat monthly fee did a lot of things for the company, and for their clients. Regardless of what type of clients they had, they all paid the exact same fee every single month regardless of how much work was being done for them. When this did was enabled clients who needed more help to be able to get it without penalizing them with a higher bill. Some clients would need more work in some months and less in others, and they discovered that it tended to even out. Charging extra for business plans did not make sense, and they were able to give the clients that needed the help of a business plan a plan to avoid problems.
The reason why this worked for this Edmonton tax accountant, is because they always know that they make more money on returning clients then brand-new clients, so by making the investments on allowing their clients to be successful earlier, they were also creating a stream of successful repeat clients. By helping them become successful, they would need accounting services well into the future, which would end up being a win-win for both Spurrell and Associates and their clients. Once they put the investment and the work into the clients the very beginning, updating their information in future years is a lot easier.
Most accountants bill their clients an hourly fee, but one Edmonton tax accountant is changing the way they are billing their clients, and therefore changing their relationship. By billing a flat monthly fee for all of the accounting services, this is significantly changed the way interact with their clients, and impacting the success of those clients in their business.
One of the ways that changing the pricing structure to a flat monthly fee is this Edmonton tax accountant was able to stop spending so much time on billing. In order to bill the traditional hourly rate, they would need to keep track of all of their time, use that time to create a bill, review the bill and then send out each build to clients. Because there clients never knew how much they were going to be getting charged each month, they often had questions about what was on the bill for that current period. Altogether with creating the bills, sending them out and answering questions they discovered that they were spending approximately two days every month which was equaling five weeks every year just to deal with billing and questions. By implementing a flat monthly fee, all the clients get the same invoice and since they all know exactly what they are going to be getting, they have no questions.
Five additional weeks per year of free time was able to be opened up simply by moving to a flat monthly fee pricing structure. There able to put that time back into servicing their customers and helping their clients succeed. Not only did that free up time to help clients, it allowed the accountants to be able to understand exactly how much revenue they have coming into the firm every single month, and by calculating how many times on average there corporate clients will request meetings in a month, therefore there able to calculate how many more clients there able to take on and give a high level of service to. This also allows this Edmonton tax accountant to be able to figure out how many more people they need to hire in order to service more clients.
The key to making this system work, is having everybody on the same flat fee, no platinum or premium plans with additional services built in. All clients are able to gets whatever help they need for the same price. Once they have done this, all of their clients feel like they can contact an accountant any time they have a question, or every time they have a problem crop up in their business. This kind of open communication allows businesses to truly get the help that they need which helps this Edmonton tax accountant mitigate problems and get solutions before the problem becomes too bad. The consistent bill each month also allows clients to manage their monthly cash flow in their business as well.
