There are parallels in the work each does. You call a plumber when you need one; it’s an essential service. Same for small business owners who need a bookkeeper because even the best of the cloud-based accounting software platforms can’t guarantee accurate bookkeeping (you know the mantra GI-GO: garbage-in/garbage-out).

Parallels between the noble professions of bookkeepers and plumbers evaporate when it comes to fees. Search or call a plumber, ask for a quote and they will inevitably advise a cost, for example, for blocked drains. Here they may quote like this: “From $99”. It’s a fixed cost with an obvious variance factor built in – just like your home builder or renovator who will issue a fixed price contract with ‘variances’. Plumbing, home building and renovations can be highly complex jobs requiring an array of equipment. Indeed in the case of the plumber-expert at blocked drains, chances are he will be equipped with sophisticated CCVT drain cameras and pipe locators, fitted with the latest in high pressure water jetting equipment and they will, most likely, even make a recording for you in the event that you need to provide proof to an insurance company or strata corporation – lots of scope to add on fees on value basis.

Raising the image

A blocked drain is disgusting but so too is poor bookkeeping which can result in penalties from the ATO, higher bank fees, and a stinking mess of late payers.

So why do bookkeepers insist on charging an hourly rate for work that has high value and where technology is driving a wedge into their business case?

For sure the call to the plumber is usually made under emergency conditions but we, as consumers, also have choices and there are discount operators. None, however, will quote on an hourly rate basis because, as consumers, we want certainty. Once the plumber assess the scope of the work he will quote for the variances (give or take).

There is a salient lesson implicit in this essential service: fixed price is de-rigeur for services providers most of whom have a transparent pricing mechanism for variances. Think too of the auto mechanic who quotes you $185 for a ‘normal’ service and then calls you at 11 am to say “You need a new battery; it’s at the end of life. Cost is $120.”

The danger point for hourly rate practitioners is that there are only so many hours in a week and if you position yourself too high, you’ll not get the new client. Position yourself too low and you’ll struggle at a sub-living wage. It’s also inherently inefficient.
There is a caveat: going to fixed rate requires a strong understanding of the client business so that you don’t have to have a continuum of variance conversations.

Finding a niche

A fixed price regime does not demand specialisation but it helps. Specialising can put you in a position to be more profitable, raise your rates and get better quality clients. Gaining a knowledge in a sector such as trades, hospitality etc. can raise your expertise as a financial professional. Assessing the criteria to arrive a fixed price is always going to be a case-by-case exercise but arriving a fixed price need not be insurmountable. The client will enjoy the certainty of the fixed price knowing that the ‘11am phone call’ may require an extra cost. Fixed price creates a happier working relationship inevitably building in a loyalty factor.