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Mentor Plus Blog

Buzzing about Billing

Posted By: Edi Osborne on 8/13/2009

Greetings my fellow Buzzers!

The topic I would like to propose for our first Buzz is this:

What is your top peave about the profession? You know, those institutional beliefs, stereotypes, and accepted behaviors that just drive you crazy? If you can't think of any, ask yourself this question . . . If you were starting your firm from scratch again, how would your firm be significantly different than it is today? If you can't answer with anything, then maybe yours is the firm we should all go work for? If that is the case, you probably have some really good input for how to address some of the issues others are struggling with.

I'm going to get the ball rolling by throwing out my most recent rant about the profession. Here goes . . . At nearly every gathering of accountants I have been present for in the past few years the topic of time and billing, billing practices, and write offs has sparked the most heated debates. I have always felt the profession has set itself up for failure with the way it measures and rewards performance. Specifically, the over-emphasis on billing hours. Some firms have addressed this by switching their focus to realization. Which sounds good on the surface, but ends up creating equally dysfunctional behaviors with staff underrecording their time and utilization dropping.

When all is said and done, the time and billing system is recording and reporting what the firm wants to hear (or what staff believes they are being graded on). I used to think I had some ideas for changing this paradigm but quite honestly, I feel like I have been witnessing the biggest shell game ever watching the profession shift the target from billable hours to realization rates.

Am I crazy? Has anyone else noticed this slight of hand trick?

I think the answer lies in separating how we monitor and manage performance from how we bill clients; using the time and billing system as a time management tool only. This concept is not new. Value billing has been on the discussion table for as long as I have been involved with the profession.

I'm curious to hear your thoughts and rebuttals on this. Or if you have another topic you want to buzz about, send me an e-mail and I'll put it in The Buzz queue. 

 

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3 Comments

    • Aug 15 2009, 7:56 AM Bernard Minton, CPA
    • Knowing how to get paid for value delivered - and compensated for my time - is the biggest challenge I face with new clients whose first question is virtually always "how much do you charge", meaning by the hour. I have bypassed this in my tax practice with billing by forms for 1040s and range billing for corps based on size. This has helped. However, in the consulting and business analytics arena, I am still struggling in presenting a packaged price when the amount of time I am going to have to put in is so hard to define. Since this is a new area for me, I would like to hear how others have found success. I am a sole practitioner.

    • Aug 19 2009, 9:16 AM Brian DiBella
    • The whole issue revolves around value. What is the value I provide to my clients? If my hourly rate is $ 200 an hour and I spend 1 hour to help my client save $ 50,000 is there more value and can I charge him more than $ 200?

    • Sep 01 2009, 8:39 PM David Berezan
    • Ihave never had any difficulty with billings if my service is explained, provided as explained, with the client understanding and seeing the process. I do not think accountants are as visible as we should be to enable clients to see what we do and the value we provide. The more proactive we are, the more in their face we are providing service before they even ask, the less billing is an issue, regardless of what is charged. As accountants billings should be so easy, BUT... We advise clients on how to manage, what prices to charge, value for what they provide, profitability, rates of return for enterpreneurialship, but we cannot apply the same principles to ourselves. As accountants we have difficulty measuring or considering the soft issues, value, service, expertise and our training, costs of our practice. We continue to look for mathematical calculations. Change is difficult (impossible?)

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