The Bitterness of Poor Quality Remains Long After the Sweetness of a Low Price is Forgotten – Benjamin Franklin
I love this quote.
Cheap doesn’t always mean quality and whatever you’re looking to buy as a consumer or business owner, you’ll always find a cheaper alternative. However, the cheapest option isn’t necessarily the best option and can often lead to problems.
How do you view accountancy services? As an investment or expense you could do without?
If you’re only interested in paying the lowest possible costs, you’re missing a trick. You’re failing to invest in your future.
How much are you investing into the future of your business?
As an indicative guide, I usually recommend a business should be investing a minimum of 2-3% of it’s turnover into its finance function. If you invest less than this, the service you receive is likely to be undeliverable long term or you’re not going to achieve the future you want.
When pricing services for your customers, the price should be based on the value you provide and you should have confidence in that value together with the price you charge.
When buying a service, it’s quite common for experts in certain fields to charge a premium so always think about the quality of the service you’ll likely to be getting when comparing to the cheapest.
Our monthly fee for the preparation of limited company accounts with two shareholders/directors, corporation tax return, confirmation statement, payroll and a self assessment tax return is typically £150.00-£180.00 per month.
When a prospect asked recently if we could match £95 a month for the same service but with tax planning advice thrown in, I very politely declined.
There are two main reasons why:
- We would not be able to deliver the level of service that the client was looking. We’d be under servicing the client who would become very frustrated, very quickly that they weren’t getting the service they’d signed up for. We wouldn’t have charged sufficiently in order to spend extra time with that client to add the greater value they were looking for.
- We would be servicing the client at a loss which is fundamentally flawed. How can a loss making accountant advise their client on how to run a profitable business? Personally, I wouldn’t feel assured if I was to appoint a professional advisor who wasn’t walking the walk! We’d also be doing a disservice to ourselves and our profession.
When you pay for a professional service, it’s the years of skills, knowledge, training and qualifications that you’re paying for. I’ve studied and worked hard for many years and I don’t believe that all of those years should be considered to come at a cheap price.
As accountants, if we don’t value our service, how can we expect others to?
When a client is open to investing more money into their accountancy service and is looking for an accountant to become an integral partner to their business, they will receive much greater benefit and a higher level of service.
Examples of this higher level of service may include regular engaged conversations to establish what’s going well and what isn’t going so well in the business, carrying out research, making recommendations, performing analysis and providing critical financial insight to support important decision-making which enables the business to grow.
We’ve all heard “You get what you pay for” and it’s very true!
I do understand that some businesses will have a budget to work with and may only be looking for the core compliance services. When clients are really keen to work with us, we will always have conversations with them to try and achieve their budget wherever possible, even if it means sacrificing the preferred level of service for the short-term. We will agree where their current budget can be put to greatest use and place additional services onto the future plan.
Selling your service cheaply is the easiest form of pricing strategy, on the basis that you’re likely to win the majority of work you bid for and the volume of that work will compensate for the lower pricing. However, attracting cheap clients, will result in them constantly quibbling on price and they will ultimately shop around for a cheaper deal again.
Price sensitive clients aren’t the answer to building a long-term sustainable business.
If you buy a cheap service, it’s likely you’re going to be one of a large number buying into that service which means that ultimately the quality of that service may not be at the standard you need, this can be potentially damaging to your business and cost you more in the long-term.
We’ve always been very proud of our award winning high level of customer service and we will never compromise that.
I’m glad that I’m not in the market for an accountant because there are literally thousands of us out there, all offering similar services at very different costs.
It can be very confusing for business owners to choose the right accountant for their business or even know where to start. Watch out for my next blog ‘How to choose an accountant’ with my tips on how to select the right accountant.