Time-consuming tasks – like chasing down source documents and data entry – are being completed quicker and quicker thanks to cloud accounting apps and automation. Now, accountants and bookkeepers are able to provide increased levels of value in the form of financial and business advice. So, it’s time to separate time from revenue, move away from hourly billing, assign a $ amount to the value that you provide and introduce a fixed monthly billing structure. To help accountants and bookkeepers make the transition from hourly billing to fixed fees, we’re teaming up with Practice Ignition (https://www.practiceignition.com) and QuickBooks (https://quickbooks.intuit.ca) for a live webinar to outline all of the steps required to prepare, build and implement a fixed fee pricing model. We cover: -The cloud accounting/bookkeeping business model -How to bundle recurring and nonrecurring services -Determining a time/cost baseline of each service + pricing -How to have the “value” conversation with clients before and during implementation -The scale and profitability that fixed fees open up for your practice If you’re still debating whether fixed fees make sense for your firm, take our quiz to find out: https://hubdoc.typeform.com/to/GmDZGz

1. The Secret to Scaling:
How to Build & Implement a
Fixed Fee Pricing Plan

2. Your Hosts
Tom Maxwell
Head of Customer Success
Practice Ignition
Yoseph West
Head of Marketing
Hubdoc

3. Poll: How many monthly
bookkeeping clients do you
have?

4. Today’s Agenda
● Introducing the cloud accounting / bookkeeping business model
● How to bundle recurring and nonrecurring services
● Determining a time / cost baseline of each service + pricing
● How to have the “value” conversation with clients
● How you can increase profitability with fixed fees

5. The Inspiration Behind this Webinar
Background:
● Self funded + bootstrapped by Guy Pearson (now non-exec chairman plus
founder and CEO of Practice Ignition)
● 100% cloud from day one
● Adopted a fixed fee billing model after studying startup software companies
Growth:
● 7 years old (2010 start date)
● From 1 employee to 20 by year 4
● From 1 to 3 offices by year 4
● From $0 to $2mm in annual recurring revenue in the first 5 years
● From only serving clients in Australia to serving clients in 8 countries
● Highlight includes helping clients raise $100m in funding
Niche:
● High growth companies
● High Net Worth Individuals
● 100% cloud businesses

6. What is the Cloud
Accounting / Bookkeeping
Business Model?

7. Key Components of a Cloud Business Model
Value Costs Invoicing / Payments
Ex. delivering outsourced
accounting
Ex. staff wages, rent,
internet, subscriptions
How frequently you
invoice / collect
payment

8. The Traditional Model: Compliance Services
Example

9. The Traditional Model: Bookkeeping
Services Example

10. Why Hourly & Cloud Software Don’t Work

11. The Cloud Model = Monthly Value

12. Moving Away from Hourly Billing is
Better for You and Your Clients
Fixed fee billing provides:
For Your Clients
● Better service for the same cost
● Confidence in their trusted
advisor (as recurring services
are delivered at a higher
standard)
For You
● Deliver a more efficient service
with higher profits
● More opportunities for
value-priced projects
● No longer concerned with time
for billing & efficiency is
prioritized

13. The Cloud Business Model with Fixed Fees
Value
Deliver value to your clients
on a monthly basis.
Costs
Try to align all your costs to a
monthly basis
Invoicing / Payments
Get paid upfront. Fixed fee
pricing is an exchange of risk.

14. Poll: How would you
describe your current
pricing model?

15. How to Bundle Monthly
Service Packages

16. What is a cohort analysis?
Cohort = A group whose members share one or
more similar characteristics

17. Cohort Analysis: The Easiest Place to Start
● Who are my monthly clients?
● Who are my quarterly clients ?
● Who are my annual clients?

18. Cohort Analysis
Break down the commonalities
What do you do for 90% of each cohort?
● The basics: financial statements, tax returns, etc.
● Additional variables delivered on a regular basis: sales tax, returns,
payroll, management meetings
● What software is used within each cohort?

19. Monthly Clients Quarterly Clients Annual Clients
Core Services ● Bookkeeping
● Training and support
● Update and deliver
training manuals
● Monthly debtor report
● Bookkeeping
● Sales Tax
● Quarterly Review
meetings
● Training and
support
● Annual accounts
● Tax returns
● Training and
support
Software to deliver
the core services
● QBO
● Hubdoc
● Dropbox
● QBO
● Hubdoc
● Tax software
● QBO
● Tax software
● Dropbox
● Hubdoc
Add-on services ● Payroll
● VCFO
● AP/AR
● T4/Group certs/W2
● Tax planning
● VCFO
● Software setup and
training.
● Business Advisory
● Risk Management

20. How Do You Align All Cohorts to a Monthly
Package?
● What additional services can be delivered to quarterly/annual clients?
or how do we get them to pay monthly?
● Billing frequency is separate to delivery frequency

21. Use the Cohort
to Calculate a
Baseline Price

22. Time (hrs) Rate (p/h) Role type
Admin 0.1 80 Admin
ASIC/SEC/Companies 0.1 80 Admin
Preparation of Financials 4 200 Senior
Review/Audit of financials 4 250 Partner
Preparation/lodgement of
Tax return
1.25 150 Intermediate
Accounting Support 2 80 Grad
Filing fee 1 350 Fixed 1
Accounting software 12 50 Fixed 2
Example Plan – Annual Compliance Package

23. Don’t Sweat the Small Stuff
Don’t worry about overages and underages on each and every client

24. The Law of Averages
Counter the over/unders by:
● Regularly reviewing your service bundles
● Develop a standard tech stack and workflow
● Constantly optimize your systems as your team gains experience while
charging the same / more
● Remove the outliers (but ensure you charge appropriately for them)
● Profits will increase per service in the long run

25. Time
(hrs)
Rate
(p/h)
Cost p.a. Monthly $ Time/Monthly Role type
Admin 0.1 80 8 Time 0.67 0.008333333333 Admin
ASIC/SEC/Companies 0.1 80 8 Time 0.67 0.008333333333 Admin
Preparation of Financials 4 200 800 Time 66.67 0.333333333 Senior
Review/Audit of financials 4 250 1000 Time 83.33 0.333333333 Partner
Preparation/lodgement of
Tax return
1.25 150 187.5 Time 15.63 0.1041666667 Intermediate
Accounting Support 2 80 160 Time 13.33 Grad
Filing fee 1 350 350 Fixed 29.17 Fixed 1
Accounting software 12 50 600 Fixed 50.00 Fixed 2
Total: $3113.5 $259.46
Marketable price $3330 $275
Example Plan – Annual Compliance Package

26. Considerations for Variables in Recurring Services
Bookkeeping and payroll are examples of services where variables dictate
the cost:
● Payroll pricing determined by number of employees
● Bookkeeping pricing determined by number of transactions

27. Considerations for Variables in Recurring Services
● Consider a tiered approach to packaging your services
○ Payroll: monthly payroll for up to 10 employees per month.
○ Bookkeeping: Reconciling up to 150 transactions per month
● How you arrive at these numbers is determined by the type of clients
you service.
● Once you’ve determined the tier “ceiling”, ensure you also price out
add-ons for transaction/employee count overages.

28. Seachange Accountants and Advisors:

29. Cost + Margin to
Scale Service Bundles

30. Review Cost and Margin as You Grow
July August September October November
Product Cost $79.17 $79.17 $79.17 $79.17 $79.17
Time Cost $180.29 $180.29 $180.29 $165 $165
Number of Clients 100 105 110 121 142
Growth Rate 5% 5% 5% 5%
Price $275 $275 $275 $275 $275
Revenue $27,500 $28,875 $30,250 $33,275 $39,050
Total Cost $25,946 $27,243 $28,540 $29,545 $34,672
Margin 5.65% 5.65% 5.65% 11.21% 11.21%

31. Review Cost and Margin as You Grow
● Make sure you’re focusing on efficiency here:
○ As you add more clients your costs decrease
○ As you improve your processes your time cost comes down
● Review costs regularly
● Change prices annually
● Add additional value when you increase your fees

32. The Role of Value
Pricing

33. The “Hug” Rule
Have you ever been hugged by a client for
completing compliance work? Chances are slim.
● Clients (typically) don’t see value in
compliance work – it’s just something they
have to do as a business owner
● Compliance work is your opportunity to
Build trust and over-deliver
(apps will help you do this)
● If you do this, the opportunity for high
value project work is tremendous

34. The “Hug” Rule
● Value pricing is ideal for project work that arises from the amazing work
you do when delivering your fixed fee recurring services
● In this case, project work refers to any service (typically, non-recurring)
that can lead to a positive change in the direction of your clients’
business – i.e. the types of services you deserve a hug for!

35. How to Have the
Value Conversation

36. Communicating Before the Change
Announce in advance
Send a client email 90 days in advance explaining
why you are changing your pricing model
Some examples:
● Allows the firm and your business to go to the cloud and move towards
real-time financials
● Maintains a profitable and cash-flow positive relationship (we can
continue to be your advisor)
● No surprise bills, ever

37. Keep Communicating While You’re
Determining Prices
Share your plans and work together with your client
to figure out which one makes sense to them
● Part of the move to fixed fees is being transparent and openly sharing
pricing
● You will reduce fees for some clients
(Remember: don’t sweat the small stuff as you shift your focus to scale
and efficiency)
● Ask them if they have any queries

38. Communication After the Transition
● Get your fees approved in writing with an engagement letter
● Set regular reviews with your client (for upsell opportunities and to
minimize scope creep)
● Re-engage annually with a new engagement letter

39. Scaling Up + Becoming
More Profitable

40. The key metric is MRR (Monthly Recurring Revenue).

41. Traditional Growth Model
● No incentive to grow (as your costs grow with you)
● No incentive to become more efficient
● Profit margin is typically static

42. Traditional Growth Model
Existing
client’s new
business
Lost client
Referral
Tax season

43. MRR Growth Model
● Incentive to grow (as your costs will eventually plateau)
● Huge incentive to become more efficient
● Profit margin can grow

44. MRR Growth Model
Projects should
fund your
growth activities
Profit (40%
can be
achieved)

45. MRR Growth
As you streamline, you focus on efficiency and driving
cost of doing the every day down, constantly boosting
profits over time.

46. Poll: What accounting
software do you support?

47. Your Three Takeaways
1. Align the three components of the cloud business model
(Value/Costs/Invoicing & Payments) by focusing on monthly delivery.
2. Don’t sweat the small stuff and just get started.
3. Constantly review your prices, your processes and your tech stack.
Remember: we are here to help!

48. VIP Account for You
One free Hubdoc account for
Accountants & Bookkeepers
Simply sign up at
HTTPS://APP.HUBDOC.COM/SIGNUP
Once you love Hubdoc, begin
adding your clients
Supercharge your practice!

49. Getting Started on PI
Two offers:
1. Sign up for an annual plan and your first $30k in
processed payments is on us*
2. 50% off PI Launch (Optional implementation and
custom training plan)
To claim these offers, Please book a demo with a
Territory Manager here: http://calendly.com/pi-launch
*Credit card payment processing available in Canada, NZ, and the UK. Credit Card and
Direct Debit available in Australia and the USA. A credit is applied to your account
towards your payment fees

50. Thank You + Q&A