Pricing Services in Your Practice: Building Value, Trust, and Profitability

21 Aug

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Pricing is more than just attaching a number to your services. It is one of the most important business decisions you will ever make as a Chartered Business Accountant in Practice (CBAP). Get it wrong, and you risk either undercutting your own value or pushing clients away. Get it right, and you build a sustainable practice where clients understand, appreciate, and trust what you bring to the table.

In a competitive profession, pricing shapes not only your income, but also how clients perceive your expertise. Underpricing suggests you do not value your skills, while overpricing may drive clients to look elsewhere. The challenge is finding the balance – a balance that allows your practice to grow, your clients to receive clear value, and you to enjoy a healthy profit.

So, how should you price your services? Let’s walk through the key models, examples, and practical steps you can apply in your own firm.

The Hourly Rate – Knowing Your Minimum

Time-based billing is where many practitioners start. It is straightforward: you charge for the hours you work. This works well for consulting, once-off support, or when the scope is unpredictable.

But here’s the trap: clients focus on the clock, not the outcome. They may ask why a task took three hours instead of two, or compare your rate to someone cheaper. That’s why you need to calculate and understand your minimum hourly rate.

The formula is simple:

(Annual salary + overheads + desired profit) ÷ billable hours = hourly rate

For example, say you need R700,000 a year, and you plan to bill 1,200 hours. That’s R583 per hour. Charge less, and you’re effectively working at a loss.

Time-based billing should not define your entire pricing strategy, but it is a useful baseline to make sure you never sell yourself short.

Fixed-Fee Pricing – Predictability for Both Sides

Fixed fees are ideal for clearly defined services such as tax returns, monthly bookkeeping, payroll, or financial statements. Instead of billing hours, you quote a flat amount for the deliverable. Clients like this because it removes uncertainty. You like it because it creates efficiency and reduces arguments about timesheets.

But beware: not all services are equal. A tax return for a client with one income source is very different from one with multiple companies, investments, and rental properties. This is where scope-based pricing or tiers come in. For example:

Basic tax return (one income stream) – RX
Tax return with investments – RY
Complex tax return with multiple businesses – RZ

This way, clients understand exactly what they’re paying for, and you protect your margins.

Tiered Pricing – Choice Creates Opportunity

Tiered pricing means offering three or more levels of service – often called Basic, Standard, and Premium. Each level includes a clear set of deliverables, with more value at higher tiers.

For example, in monthly accounting services:

Basic: Bookkeeping and compliance.
Standard: Bookkeeping plus monthly management accounts.
Premium: All of the above, plus advisory meetings, analysis, and priority support.

Tiered pricing works because it gives clients choice. They select the level that fits their needs and budget, but they also see what they could get if they upgraded. Over time, many do.

The golden rule? Don’t just increase the fee in higher tiers – increase the value. Add insights, faster delivery, more touchpoints, or automation tools. That way, the client feels they are stepping up into something worthwhile.

Value-Based Pricing – Where Trust Meets Impact

Value-based pricing is the most powerful model for advisory services. Instead of billing time or tasks, you set your fee according to the value of the outcome for the client.

Think about it this way: if you save a client R120,000 in tax through smart structuring, what is that worth to them? Far more than a couple of hours on a timesheet. A fair fee might be 20% of that saving – say, R24,000. Both sides win: the client saves a significant amount, and you are paid appropriately for your skill and insight.

The steps are straightforward:

Ask outcome-based questions: What is this decision worth to your business? What is the cost of doing nothing?
Estimate the financial impact: Savings, profits, penalties avoided, or growth achieved.
Price as a fair share of the value delivered: Typically 10–30%.
Frame it in the proposal: “This strategy could save you R150,000. Our fee is R30,000 to deliver it. That’s a 5x return.”

Clients don’t care how many hours you spend – they care about results. Value-based pricing shifts the conversation from “time” to “outcomes.”

The Retainer Model – Stability for You and Peace of Mind for Them

Retainers are a favourite for practices that want stable monthly income and closer client relationships. Instead of charging per task, you set a monthly fee to cover ongoing support, advice, and agreed services.

For example, a small retail client might pay R3,500 a month for:

Monthly management accounts.
One 30-minute call.
Ad hoc email support.
Reviewing supplier contracts or pricing if asked.

The beauty of this model is predictability. The client knows exactly what they’ll pay. You know exactly what you’ll earn. It reduces admin, avoids scope disputes, and positions you as part of the client’s team rather than an occasional service provider.

Putting It All Together

There’s no one-size-fits-all approach. The best pricing strategy is often a blend:

Time-based for once-off consulting.
Fixed-fee for routine compliance.
Tiered pricing for service packages.
Value-based for high-impact advisory.
Retainers for ongoing partnerships.

The key is to align each model to the type of service, your goals, and your client base.

Final Takeaways for CBAPs

Know your value – don’t simply copy competitors.
Review pricing annually – costs and demand change.
Track time – even with fixed fees, it reveals profitability.
Communicate clearly – clients pay for results, not just processes.
Be flexible – different services may require different pricing models.

Good pricing is not just about money. It is about building trust, creating clarity, and positioning your practice as a long-term partner in your client’s success.

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