Have you ever had a client complain that you're too expensive? It can be tough to explain to clients why it is that you charge what you do. After all, selling a service is far more challenging than selling a product.

But this doesn't mean that you need to charge less than what you're currently charging. In fact, charging less will only undermine your work's value. So what do you do?

In this article, I'll look at some tried and tested methods for setting the right price for your services. And I'll also look at how charging more can be beneficial not only to you but to your clients too!

Charging by the hour or "cost-plus pricing" is a pretty standard, traditional pricing model that many accountants and bookkeepers follow. But, although this pricing model is popular, it's far from perfect. Let's break down why.

Clients don't know how time-consuming certain tasks can be. So when you tell them a job took 10 hours, they might think that sounds far too long and, consequently, not trust you moving forward.

And you don't want to lose a client's trust!

If your clients don't know how long this job will take you, they won't know how much they'll end up paying in advance. Then, they can only guess and their guesses may be far off.

This pricing model doesn't focus on what your clients are really thinking about - the value you're providing.

If you want to get paid the amount you truly deserve for all the great services you're offering, you need to reverse your approach to pricing. Instead of starting with the time and energy - and expertise - needed for you to provide the services you do, start with why your clients approached you in the first place.

Clients approach you to solve a problem they're having and it's up to you to provide them with a solution. The value you provide lies in this solution.

So, let's take a look at how you can approach pricing differently by keeping value foremost in your mind.

Fixed pricing is certainly more fair to the client than hourly pricing, but it's not fair to you in terms of ensuring you get paid what you're really worth. As Intuit QuickBooks' pricing guide notes:

"First, you must forget the timesheet. There is no link between how many hours you spend doing work and the value to the client. Time doesn’t help, other than the fact you need to make a profit. However, if you cannot provide value at a profit, then do something else!"

As mentioned above, figuring out how much to charge your client starts at the level of value. So, you need to figure out what value you are providing your clients. One way to do this is to start with a few basic questions. These include:

At the end of the day, you're providing clients with something that they need. They wouldn't come to you if they didn't have that need, and the cost of your service should reflect the value of your services, skills, and experience. To figure out what exactly it is that your clients need, you must ask them some questions upfront.

In this section, I'll go into three different types of questions you should be asking your clients.

When it comes to bookkeeping, some of the questions you might ask to gather the scope of the job include:

These questions will give you a better sense of your client's situation and how much work you will be required to do for them. And they also help you to figure out where the value you provide lies.

Next, you need to figure out your client's preferences. For example, you might ask a client if they'd like to have a meeting with you to go through their financial statements and get advice from you on how they can improve their business. This way, you will know the kind of services that they place value on.

You also need to establish practical preferences. For instance: how often would the client like you to do their bookkeeping, and would they like you to meet with them in person or virtually?

Another important preference is that of outcome. What is the outcome that your client expects or wants from you? Do they want a report on the financial record keeping, quarterly advisory meetings? Figure out upfront what it is that your client expects.

You can always offer them additional services that you think may be beneficial and complement the other services you're providing them with. More on this in number three!

Now that you know what your client values, you may be able to identify an additional area in which you could help them. Why not offer them an additional service that could help them grow their business?

If you show them the value of this service, they may be interested in adding it to their package.

As noted above, the value of your services is not always immediately apparent and it can be difficult for clients to assign a numeric value to your offering. This is why you need to put in the work to make sure that you are pricing your services fairly and logically.

Value pricing is the pricing model I've been referencing in this article. It does what its name implies - reflects the true value of the work being done. But value is an intangible, subjective thing. You can't measure it directly and everyone values things differently.

Moreover, accounting services are difficult to price because each client is unique when it comes to sector, size, entity, needs, quality of record-keeping, and more. So, how do you figure out what the right price is for each client or service?

The key is to package your services - turn them into a product with a big bow. But why stop at one product when you could have options for clients to choose from?

When it comes to proposing prices for your services, one way to do this is by offering three pricing options, each one serving as a neatly packaged product - a bundle of benefits. You know like you get on a Medical Aid membership?

So, say you offer 3 standard packages:

And, of course, you can add access to Syft dashboards to one of the higher tiers. For more on how to generate more revenue with Syft, take a look at our blog here.

These options are inspired by KGA Accounting Plus's subscription packages. They also offer dedicated packages for rural clients or rentals, as well as one-off packages. You can read more about KGA Accounting Plus here.

Three is a magical number (with some science and psychology behind it). Typically what happens when people are confronted with three price options is that they'll go for option number two. The middle option looks safest. It doesn't feel like you're being too cheap and skimping on what you need, but it also doesn't feel expensive compared to the highest option.

And if there's a Gold or Premium option, clients may well perceive the added value in it and go for that one.

It's easy enough to see why increasing your prices would be good for you, but for your clients? Give me a second.

If you increase your prices, you can afford more software to automate time-consuming, repetitive tasks, freeing you up to do higher value work around business advice. You can also redistribute your resources so that you end up doing the highest value work most of the time.

It's also worth noting that if you charge too little, you end up working too hard for little in return.

There will always be someone who says you're too expensive. It's inevitable. But just because they say it doesn't mean it's true. Moreover, if you never hear complaints about your prices, you may be undercharging!

At the end of the day, price is an arbitrary number attributed to services. The only way that we can establish whether a price is right is by comparing it to other similar services and their prices. This is why the magic of three is a good tool to use.

Charging by the hour simply doesn't do a good enough job of conveying the value of your services. Although value pricing is difficult, it's not impossible, and you can use it to generate more revenue and spend time focusing more on value-added services than on time-consuming, repetitive tasks.

So why not give value pricing a go?