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TAX PRACTICE MANAGEMENT
Show value, add value,
and bring value: Part 3
Part 1 of this series, in the March issue, Curious to compare these results, the
Editor: discussed bringing value to your team. author polled a Facebook group called
April Walker, CPA, CGMA Part 2 of the series, in the June issue, Accounting Firm Influencers, and,
focused on showing and bringing value surprisingly, almost half of the respon-
Author: to clients. Now, the final part of this dents claimed to use value pricing. The
Jackie Meyer, CPA series provides more detail on adding results are shown in the table “Facebook
value to clients, which inevitably brings Poll Results.”
up a hot debate on value pricing. Then the author polled #taxtwitter
Pricing tax work has a long history of to obtain more feedback from a wider
confusion and frustration in accounting audience. The results are shown in the
firms. The terminology can be table “Twitter Poll Results.”
overwhelming, and CPAs are worried The following example gets into the
they might do something to violate the nuts and bolts of the how value pricing
AICPA Code of Professional Conduct at might work:
every turn. This column clarifies some
of these concepts and discusses how to
A firm could provide transform a prac-tice for the better. Example: A client comes to you
more value for A shift toward value pricing has for tax preparation and planning
services. The scope of the work is
been happening for decades. Last year’s
clients and increase AICPA Private Companies Practice annual tax preparation for a Form
its profit margins Section (PCPS) National MAP Survey 1040, U.S. Individual Income Tax Re-
turn, and Schedule C, Profit or Loss
by combining value showed a continued gradual shift From Business. The client also needs
toward it. (See the table “CPA Firm
pricing with tax Billing Practices.”) estimated tax vouchers each quar-
planning. Why do so many firms resist value- ter. You meet with the client in a
post–tax season meeting, where you
pricing tax services when it is has been
shown to be more profitable?
Facebook poll results Twitter poll results
How do you price for tax work? How do you bill tax work at
your firm?
Value pricing (upfront) 43%
Value billing 33% Value pricing (upfront) 31.8%
(back end) Value billing 22.7% PHOTO BY LEEYIUTUNG/ISTOCK/THINKSTOCK
Fixed fee 16% (back end)
Hourly 1% Fixed fee 22.7%
Mix 4% Hourly 22.7%
4%
30 September 2022 The Tax Adviser
