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Cloud Pricing Software - What do you think of their brochures statement.

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Hi

I was wondering if I could put this out for discussion.   As a branch leader one of our members highlighted this to me that the below statement and is on the Cloud Pricing Software template brochure to send out to clients.    I appreciate it  is marketing speel.  I have to say, I have some concerns for what it implies towards members who do not charge fixed pricing.   As one member in Glasgow mentioned why would you highlight you maybe slow to a client.?

  Their are many bookkeepers who charge all 3 types of rates - hourly rates , fixed rates and value priciing.  Yes I think their is value is picking which type of pricing is the right one for your client and maximising your profit.

I have to say it is not the type of marketing I would take part in as I have always thought ICB members should work together as a team and support each other.

It is a software so as I am far as I am concerned, so I feel  we should look at it just like we do at Sage , xero ,  Quickbooks Exact.

 

Yes you can tweek the brochure but still shoud it be there?

____________________________________________________________________________________________________________

This is from their template brochure

 

CLOUD PRICING BROCHURE:

 

A silly way to price

Most self-employed bookkeepers will quote you an hourly rate.  In fact, the Institute of Certified Bookkeepers reportedly recommends £26 per hour.

 

We think that’s unfair.

 

Firstly, an hourly rate means you have no idea how long the job will take and therefore how much it will cost you until after the work is completed.  Secondly, if we make mistakes or take longer you pay more.  That doesn’t seem right to us… it’s certainly not fair.

 

So what we do is give a fixed price (based on your particular circumstances and what you want).  That way you can budget and plan.  And if we are slow and the work takes longer that’s our problem not yours.



Edited at 25 Jul 2016 05:21 PM GMT

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First time i've heard that ICB 'reportedly recommends £26 an hour'  considering their happy to put jobs on the website at around £12.   Still thats a different gripe. 

 

I mainly charge an hourly rate but thats what most of my clients prefer and to be honest so do I.   I can understand accountants using fixed rates / value pricing but then they do tend to provide the same thing year in year out.  Some of my latest clients have come to me because they dont understand what their current accountant is charging them for but seem to be paying a lot for very little. 

Regarding his comment about the client shouldn't have to pay because your either slow or making mistakes.  If I personally make a mistake (and it has been known to happen) I wouldn't dream of charging the client for my error. In the same way if I have to look something up because its the first time ive done it  I wouldnt charge the client for my lack of knowledge. 

Regards

 

Liz

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Hi Lizzie

I agree with you about mistakes and not billing for extra knowledge or learning curve.

Most decent clients are happy to pay for the work that is done.  Some of my hourly rates are higher than the above.  However, they are agreed before we start.  We would never run up hours without discussing with the client first, as to why the extra work was needed.  As some of my branch members have mentioned, why is Cloud Pricing even mentioning the ICB only with a strong statement below implying ICB bookkeepers who charge are unfair?  Why does Cloud Pricing not mention other Financial Institutes or better not mention it at all?



Edited at 25 Jul 2016 05:16 PM GMT

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  • # 113470

Hi

I have been on a number of webinars re Cloud Pricing and a lot of it makes sense - if your client has money to spend then its all great.  They dont seem to mind splashing out for value and we get a good rate.  

My argument has always been though, what about the little Sole Trader who cannot afford lots of money.  The general answer seems to be is that you should consider whether you actually need a client that cannot afford to pay.

Personally, yes I want to earn as much money as I can but the satisfaction from providing a good service and helping these types of people is what drives me.  These are the people who need help because they do not earn a lot and need as much help and advice as we can give them.  

I guess it all comes down to what you want out of life!!

 

Sue

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Hi Sue 

My issue is not really about how much money you want to get,  no one will take on the small client who cannot pay, unless they see some potential there in the future.  It is about the way you conduct yourself and being honest with the client. 

  My issue is with the statement.  It implies that ICB members who are charging clients hourly rates are potentially being dishonest and charging for mistakes.   This is simply is not true, you do not charge your clients for making mistakes and if you are slow at your work.  I believe this to be very misleading .  Yes I have a problem with the morals of this type of selling.

Another item that appears to get a mention in cloud pricing is that your cost is a Investment.   I believe this to be misleading as well.  I would be very careful in using the word investment if you are providing Pension Services of any kind for Auto Enrolment to a client. 

The word investment in Financial terms means you expect a return on your money as in £  not time.  

At the end of the day,  I could put in my own brochure to clients .  Those who are working with fixed costs on every contract  are less likely to do their job correctly and will make mistakes because they are in a rush to do the job in a fixed time.  They do not care about what is best for the client as they will start to begrudge the client because they are unhappy with the amount of work they have to do.   This would not be correct.  

However it seems okay for Cloud Pricing Software to make sweeping statements.   so I guess they won,t have a problem if we put a similar type of statement back.    

ICB should not be mentioned in the same statement as we think this is unfair. 



Edited at 26 Jul 2016 08:28 PM GMT

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I agree with you Sarah. 

It does imply that by accepting an hourly rate they are accepting that if we are slow or make mistakes they'll pay for it, but if they had a fixed price everything would magically be OK. Even worse, mentioning the ICB's so called recommended rate also implies (to me) that they they are saying they will not be paying anywhere near that with the fixed price fee. Also, what it isn't considering is if the client has an idea of how long the job will take (or how long they want it to take - they may say they want someone in once a week) with the magic "fixed price" they will be able to work out what the hourly rate roughly is, and if its over £26 then they will be asking why! I know plenty of my clients would question it straight away. 

I've attended the webinars and events linked through the ICB and I am not convinced this works for bookkeeping, there are just too many variables in what clients want from a bookkeeper to be able to neatly package it as a realistic fixed fee. It just doesn't take account of the volume of work involved. 

Fixed prices work well for Tax Returns, payroll and annual accounts, but in my opinion not for bookkeeping.

Victoria

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Hi Victoria

You make a very valid point.   When you read it like that it does imply you should be paying less and therefore encouraging the client to pay less than £26 per hour.  Obviously Cloud Pricing does not think we are worth it.   Well we are and a lot more.   It completely contradicts the whole point of the process of Value pricing and ICB bookkeepers receiving more for their time.

Clients are not stupid .  I have one client who we recently gave a option of a  fixed price to last week .   She then just divided by how many hours we  would be there for to work out the hourly rate so she could compare to others.   We were the highest and we won the contract but she still wanted to know want did it work out hourly.  

I have asked a lot of good clients what they think about using the word investment for the clients bill.  The response I got was it was extremely unwise, irresponsible and misleading.  One client said it was very dangerous use of the word that could lead to all sorts of legal problems.

I really fail to understand why Cloud Pricing Software attacks ICB charges why not other financial bodies,  or better remove this statement from  the brochure.   Cloud Pricing is sold to other accountants,  so how so we know that this template will not be picked up by other accountants and used against us.

 

I don,t obect to value pricing I am just not happy with the brochure statement.  I posted the below that I responded to on another question about Cloud Pricing under the title ICB mentoring  and I think it covers how it works in real life for bookkkeepers.

"Hi 

As a company we do all 3 so bear with me.  

We have various different contracts with different clients.   To be honest it all depends on the client who comes through the door and you get to judge if you are losing them in a meeting by your pricing.   You will get more experience at it. 

For example I have some very local lucrative contracts that insist on paying by the hour and the week and by chq.   I did actually try to get them on a fixed price and their was no way they would even consider value pricing.   I am in Glasgow and it is not easy to fool them nor would I want to.  The simple fact was I either took that or I lost the contract.    The hourly rate is high so it makes no difference to me at the end of the day it is money into the business. 

I have clients were effectively I do have value pricing as I offer a service where is is quite detailed as in my knowledge and I want my knowledge paid for.   I have toughen up over the years.   For example I sometimes get queries where a client wants a meeting for a hour.   They clearly state they do not want to use your services in the future but would like to have a meeting. We now tend to charge a £100 plus vat for that meeting and if they then decide they would like to use our services and it has happened on many occasions we will not charge for that meeting.   This is working for us very well and we do get paid for our meetings.   There are a lot of people out there looking for free info.   We use value pricing for other contracts as well when I really feel it is my knowledge they are paying for.  Value pricing is just over a third of our business. 

I then have the fixed pricing where I just know the client cannot cope with a hourly rate. They are the type of client that just needs to know what they are paying.   Hourly invoicing just stresses them out.  Our letter of engagement states that if the work is far greater then expected we would stop the work and inform them and re discuss the fixed price before going any further, so they have a choice to go elsewhere, most stay and are very fair.  We always go higher at first so and tell the client we will bring it down if we find after 6 months it takes less time.   

I hope this helps.   We have talked about this at the Glasgow branch and most of the very busy bookkeepers said they did all 3 and felt one way was not right for all clients. "





Edited at 28 Jul 2016 09:17 PM GMT

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