How to Break the Bonds of Hourly Billing Through Automation
Part 3 of The Accountant’s Guide to Offering Automated AP Services
Perception is everything. This is especially true in the realm of services and products with prices that are based on value. When a buyer perceives great value, price becomes less of a factor. In fact, a recent survey conducted by Bill.com, CPA.com, and Hinge Research Institute shows that buyers are willing to pay more for services that help address their most significant accounting challenges. This is where automation becomes a much greater force in accounting firms.
Automation enables firms to work within highly efficient, end-to-end digital workflows. In other words, automating services allows you to do more work in less time with greater accuracy, which translates into better service for clients. This level of efficiency requires firms to price based on value because the billable hour is no longer part of the equation.
When adding services such as automated AP and Bill.com, many firms still have questions about how to successfully communicate this value (and price) to clients, such as:
- How does automation factor in when pricing services—for example, when Bill.com is adopted to automate the AP process?
- How do you convince clients that automating work is of value to them?
- How can you start to think differently about the value you bring to the table when manual processes, like data entry, are no longer a factor?
The following sections offer deeper insight into why automation lies at the heart of service value—and how you can effectively communicate this to change buyer perceptions and get paid what you’re worth!
The value of communicating, well … your value
Today, a fair share of firms are still working under the billable-hour model, or at least a hybrid of value and billable-hour pricing. Resistance to moving to full-on value pricing is understandable, as it still feels relatively “new.” Lack of understanding around how automation elevates service value, how to adapt, and how to successfully communicate that value to clients are all likely culprits in keeping firms stuck in the billable-hour model.
Firms that are successfully billing based on value understand how automation supports this model and have mastered the art of communicating the benefits—effectively answering the ever-present question in the minds of clients: “What’s in it for me?”
Survey findings analyzed in our Opportunity Meets Value Trends Report uncovered a number of relevant answers directly from buyers of accounting services. First and foremost? Their willingness to pay more for services that help them solve major accounting-related pain points. Buyers revealed that they’re open to paying more for services that help address the following key accounting issues:
- Planning for growth and expansion (19% responded)
- Cash flow and minimizing overhead costs (18% responded)
- Lack of time to focus on accounting and financial matters (17% responded)
Additionally, the survey reported that automation is directly linked to successful price increases:
“Accounting firms are nearly 3.5 times more likely to successfully increase their prices when they communicate the benefits of automation to clients.”
And finally, the survey also reported that today’s buyers are displaying a high level of acceptance for non-hourly billing. Over 60% of buyers surveyed reported that they pay a fixed-fee for accounting services, and of this group about 80% said they have not switched from the fixed-fee pricing model since starting with their accounting professional.
This is great news for firm owners who are adding automation into the equation and need to adapt their pricing structure to fit. Value pricing represents a durable, sustainable and widely accepted fee structure. And with so many buyers indicating a preference for non-hourly billing, it makes sense for firms to start communicating why they’re worth the price.
It’s time to rethink your value and how you communicate it
This all sounds great, doesn’t it? Now, if only you knew how to quantify your value when it’s not strictly a numbers game. When one hour of work equals one hour billed at an agreed upon rate, assessing value to services is simple math—if you spent 10 hours a week managing bill pay, you bill for 10 hours of work.
Automation has thrown a wrench in the traditional pricing structure. Today, AP automation can potentially cut your work hours in half, if not more. So what’s the new formula for billing for your work? Your story has to transition to one based on the value the work provides, not the hours it takes to get it done.
And while your value story needs to change, the questions you need to answer have not:
- Why should clients choose your services?
- What’s in it for them?
At the core, the big change is how you deliver your services and the value you’ve added by automating the process. Clearly communicating this is the hard part for many accounting professionals. So, what should you say? What is the real value of your services?
At the heart of it all is automation
Firms that operate within an advanced automated platform provide far more value to clients than firms using outmoded systems. Automation fuels efficiencies, yields greater time savings, and ensures real-time, accurate views of financial data.
The accounts payable process is a good place to start when explaining the value of automation. Every business owner has to deal with AP, and most find it tedious and time-draining. So, be sure to call out common client pain points and how you can help solve those issues.
To get you started, the following are a few key value points to communicate to your clients:
- Immense time savings—An automated process removes the manual aspect of AP tasks. No more writing checks and slow approval processes. Instead, you can help clients digitize all invoices and move to one-click approvals. Leading bill pay applications also let you sync AP data with the client’s accounting software to eliminate duplicate data entry. The time saved means clients will have more hours to put toward growing their business—instead of spending those hours on administrative tasks.
- Elevated organization—Automated AP offers a single digital space for collecting all invoices, no matter how they come in. Invoices can arrive by email or simply dragged and dropped from the client’s desktop. Clients can also snap a photo of an invoice and upload it to the system via a mobile app. When AP data is in one place, clients can find needed information quickly with a simple search—including invoices that are due soon, who approved an invoice, what vendors have been paid, what payment method was used, and more.
- Customized approval process—Support clients with custom approval workflows…as many as they need. Leading systems automatically route approval notifications to the right people while ensuring internal controls are adhered to. This further enhances efficiency while supporting separation of duties.
- Full visibility into data—Real-time access to data provides deeper insight into financials to support sound, informed business decisions. This is only possible via automation because data syncs between AP and client accounting solutions. Clients will appreciate having full transparency into their data whenever they need it.
- Peace of mind—Clients will enjoy having a complete audit trail of AP activities. Automated systems log every interaction with an invoice, including notes, questions, and actions taken. At any time, clients can pull up an invoice’s full history—placing highly valuable information at their fingertips. They’ll also have peace of mind knowing potential problems will be automatically flagged, such as duplicate invoices or invoice amounts that don’t match the purchase order.
When it comes to incorporating AP automation, consider shifting your message from “we enter all your bills into the system” to “we create an easy AP workflow that manages your bills and vendor relationships with more accuracy and speed while requiring much less of your time.”
Go right to the source
The list above offers a strong template to help you start communicating the value of your automated services to clients. But don’t stop there. Find out more about what your clients want—just ask them. They’ve probably already told you what they need: for example, someone to manage their bills, get them into the accounting system, and make sure they get paid on time. But clients aren’t always great at telling you upfront what they want.
What they want clearly connects to what they perceive as true value. For example, maybe your cafe owner really wants to spend Saturdays in the front of the cafe with customers instead of doing 8 hours of paperwork and financial tasks. They value this seemingly unreachable outcome, but they don’t know how to ask for it. When you present your automated solutions, look for ways to combine their needs and wants, and focus on the values that matter to your clients. It won’t matter to them how many hours you spend helping them achieve that Saturday out of the back office. They’re willing to pay for the result.
Questions you can ask to get to the heart of the value matter:
- Why did you start your business in the first place? What is your true passion?
- What are your business goals for the next year? For the next five years?
- What parts of your business take up too much of your time and keep you from doing the things you love the most?
- What tasks do you spend most of your time performing?
- What tasks do you prefer to spend your time on?
- What about your business keeps you up at night?
- If you could, what administrative work would you remove from your plate forever?
How do you ask? The next time you’re in a meeting, leave some time to go beyond the usual transactional discussion. Or produce a short survey and blast it out to your full client base. Conducting a bi-annual or yearly survey is a great way to keep up with changing client needs and wants.
Rebuilding your messaging
Once you’ve reimagined your value in a way that resonates with your clients (and your potential clients), you need to rebuild your message. Articulating the value of your services requires you to develop a solid elevator speech—that is, a 30-seconds-or-less rundown on who you are, what you offer, and the value you provide.
You will also need to develop and launch digital communications consistently and frequently to keep your message in front of buyers—this could include updating your website to reflect the new value you bring, writing new blog posts to draw people to your site, email marketing, and posting to your social channels.
Make sure you also train staff on your new approach so everyone is “selling” using the same messaging. Consistency is key. Maintaining the same values and approach from the time clients hear about you to the time they interact with your team helps seal the deal.
The time is now
The best time to communicate your value is … always. And, for leading firms, at the core is automation. Remember, current stats from survey findings noted in our Where Opportunity Meets Value Report show that accounting firms are nearly 3.5 times more likely to successfully increase their fees when they communicate the benefits of automation.So, take some time to think through your top value propositions and start to craft messaging that resonates with today’s busy entrepreneurs. Make sure you hit on their common challenges and explain how your automated accounting services can solve these pain points once and for all. When you know your own value, it’s much easier to communicate with confidence.
This is the third of 3 articles in our The Accounting Firm’s Guide to Offering AP Services aimed at helping accountants add bill pay to their services through automation. You can read through articles part 1 and part 2, or if you’re ready to get started with your AP offering, see how Bill.com can help. Start your trial or request a demo today.