Accounting practices are writing off, on average, £187,523 in fees per year. That’s 18% of their fees, unclaimed. That’s the bad news. The good news is that it has never been easier to build a better bookkeeping system.
A question of time
We have talked before about the difficulties timesheets cause for clients. It is this same billing system that accounts for much of the fees that go unclaimed.
Time-based billing has existed in the professional services industry since the 1950s, originally copied from law firms. It has now survived well into an era where the value of time has changed significantly.
The key driver of this change is technology, which is radically changing what accountants and bookkeepers can do in an hour.
Using advances in OCR tools and workflow management software there is a chance to revolutionise the way fees are calculated and charged.
A hidden hole in your revenue
Since these fees are written off before being billed, their true effect is never truly highlighted in a practice’s performance, increasing its invisibility. But just because it is invisible doesn’t mean it can’t be recovered.
The best solution is combining value-based, fixed-fee pricing with new technology that lets you accurately predict the amount of work involved in a project. This allows accountants and bookkeepers to be properly compensated for their time while delivering maximum value to the client.
A more valuable bookkeeping system
There many advantages to a system where prices are calculated based on the value of the service to your client and the price fixed before the work is done. 70% of accountants say clients feel they’re getting better value with fixed-rate billing.
Value pricing also has effects beyond your immediate client base, with 58% of practices believing that value pricing enhances their reputation.
It’s time to cut your losses
We’ve worked out the three main causes of written off fees, and how you can fix them in your practice. Find out how you can boost your recovery rate and get rid of the hidden hole in your revenue in our Ebook “Cut Your Losses: Why written-off fees are not a fact of life”.
Download the Ebook to find out:
- The three main causes of written-off fees
- How to improve your recovery rate
- How to build a write-off proof bookkeeping system