546 Is Your Accounting Firm Selling the Wrong Thing?

Listener question here. I'm having the problem at the moment where clients will pick the lowest tier offering but expect the highest tier service. That one hit home. The client expects gold level service, but they've got a bronze level wallet. How do we better set expectations around how we will deliver the service? Because there's how we scope what work we're going to do. But most of us have never done the next thing. That is to scope how the work is done. To scope the delivery of the work, not the work that's to be done. Most of us understand how to scope that, but how do we scope how the work will be delivered? How accessible am I? How long will it take me to get back to you? Can you talk to me or my team? Can you text me? What does it look like to sell how the work gets done? It is the secret to piecing your life back together. Maybe getting out from under that cell phone for the first time. It's what we're talking about today. Come on in. Scooch that chair up. Let's talk about it.

Welcome to the Jason on Firms podcast. If you're new here, we talk about running small accounting firms. This is a podcast if you want the more Razzle Dazzle YouTube edits. That is a different YouTube channel called Jason on Firms. Most of us have dealt at some point with some version of this problem where our clients want us to just hold their hands until the end of time. But they can simultaneously be cheap. And at least in accounting thought leadership, the last five or 10 years, there's been so much more conversation around Scope Creep Creep. Just keep it on the down low. And if we don't watch out for Scope Creep, you get sucked into doing a whole bunch of work for a client that you never agreed to get. Hey, we hired five more people. Can you still do the payroll at the same price? Hey, Tina's gonna be on vacation the next couple weeks. Would you mind picking up this thing for us? Hey, I think I'm just gonna call you every month or every quarter. Should get some free tax advice. That cool? No, stop it. So Scope creep is a product of like doing a good job. In fact, Scope creep is a sign of a very healthy engagement. You're doing great stuff for them, so they want you to do more. That is a good thing. It only becomes a problem when we don't have a conversation around the scope of the agreement. Like, yes, I can do X, Y, Z for you. Let me shoot over an updated proposal to include those services. And so we send that proposal over if, if we do this at all. Actually, right now, two thirds of accounting firms don't send any kind of proposal to their clients. No sort of annual agreement. All they do is they, they send them an invoice. When do they even send them an invoice? I don't know. When the number feels like it's gotten big enough, when they make the time to bill. But part of the benefit of having explicit agreements is when, then when we build that agreement, we put all these details in here of all the technical things that we're going to do for them. Right? And the goal with that is to identify what we will do so that when something out of bounds comes up, we can be like, hey, that actually wasn't included in what we agreed to. And this, while being a step in the right direction and better than nothing, only solves half the problem. To bring it back to the original question, this is from the Finance deck. I'm having the problem at the moment where the client will pick the lowest tier offering but expect the highest tier service. Everything that we scoped in is the work that we will do. It is the destination. But what we fail to scope in is how we get there, what the expectations are around your availability, around how they can talk to you, around how quickly you'll get back to them. And before you know it, you'll have a few clients that'll just take, take, take, take, take. And to be clear, oftentimes it feels this way when it's really actually a minority of clients, not that many of them, that just cross that line. But the problem is in our evolution from people who bill hourly after the fact to people who give a price up front and try to set a scope for that price. We often blow right past the fact that there's a hundred different ways to deliver the same thing that should not come at the same price. We talk about, you know, getting pulled into a client's Slack channel or Microsoft Teams channel, or giving them your cell phone number. We talk about things as, like these things as sort of general best practices. Is that a good idea or, or, or not a good idea? It's totally dependent on what you've scoped into the agreement. In fact, my take on the traditional three tier proposal discussion is all three tiers should have identical scope. We should be doing the same work at all three tiers. Because I'm not going to let the client decide what, what work we should do. Is the client going to come back one year and be like, I'm going to pick bronze Because I, I think we just won't do 1099s this year. No, I'm going to let the client decide on the scope of what needs to be done. I'm the expert. So the scope will be the same on all three tiers. What will be different on those tiers is how we deliver the scope. Am I hyper available? Am I not available at all? Do they actually have to work with my team? Can they email us? Do they have to use the portal? Can they text us? Do they get access to the VIP phone line? All of these details are usually completely absent. Well, one of two things is they're either completely absent from the proposal at all. So we leave it up to the clients to read between the lines and they will then step into whatever their expectation is, which is probably, you know, whatever the deal was with the last guy. And we will only push back when it feels like they're being ridiculous. You know, when they're calling you outside normal hours, like, we set no expectations of when they can expect to hear back from us. And as a result, like, there's no alignment on day one about what is normal. And so somebody may come in, in fact, talking with a firm recently who works with a bunch of zoomers, and these people expect to get a response within like two to four hours, like, like very nearly real time. And so this firm is having to build just a more traditional sort of support infrastructure with way faster turnaround expectations than most accounting firms would have. But if you didn't have that conversation when somebody's coming in, then you're normal, which may be a day or two, it's not going to be acceptable for them. So we do one of two things. We either don't set any expectation at all, or the second thing, which arguably is even more expensive, is we set a universal expectation across all clients. This is how it always gets done. And usually these things just are established tribally when the big boss says it and then the rest of the team echoes it. There's a bunch of versions of this from. Yeah, we, we prefer, you know, if you call us with something urgent instead of email, or we'll get back to your email within two to three days or the month end close. Yeah, usually we have them all out by the 15th, the tax returns. Usually we'll have it out three or four weeks after you give us the information. The big boss says that and the whole rest of the team echoes it. Which is the least profitable way to deliver services. Take month end closes, for example, you could say we usually get them all out the door by the 15th of the month. And that's just kind of the universal rule in the firm. But in reality, how does that work get done? Well, the month ends, ticks over to the first of the month. We got to work on somebody on the first of the month, then we got to work on somebody on the 2nd of the month, then we work on somebody on the third of the month. The work has to be done in a order. And it's not to say that it's not, you know, stopping and starting and you're picking it up and putting it down. But. But if the work has to be done in a certain order, why not charge for what that order is? Right? Like this is, this is why it is costly to say we get everything out by the, the 15th or the 10th or the 8th or the 25th, whatever it is. It's costly to give any sort of universal answer here because people will have different willingnesses to pay for being first in line versus last in line. And I mean, you could set this up as like, you know, the 8th of the month through the 12th through the 16th, like kind of the three different options. Or, or you literally just have a, a tier where they're just priority in the queue. You don't even give a number. You just say, hey, you're first in line. We'll get to you as fast as we can. But because that stuff has to be done in an order, why not charge for what the order is rather than just having this sort of expectation that the firm kind of stumbles into and is the same for all of your clients. Tax work. Same way, man. People are very opinionated on when they want their tax work done right. Big trend right now is just moving towards more fully scheduled tax work where you give every client a week or a couple weeks or a month when that work will get done with the expectation that before that they have to have all their information in. But then at least you are kind of taking control of the entire year. And when that work gets done, rather than this FIFO first in, first, first out method where we don't have any control over the volume of the intake, so we really can't promise the turnaround time. The. This progression for most firms is like, you know, in the US we've got an April 15th deadline kind of. And so this usually starts with like, as long as they're, as long as they get their info in by, you know, April 5th, then we'll get it done by April 15th, and then that's like kind of runs you ragged. And you're like, oh geez, next year we need to move that up. And they're like, okay, well get it in by April 1st. Well now all the people that got it in by the fifth are now getting it in on April 1st. And so you actually got the same amount of work to do between now and the 15th. So you're like, ah, we gotta push that back to March 20th. That wasn't enough time. Well, now all the people that were getting it in on April 5th and April 1st are now getting it to you on March 20th. And you still have all the same work to do up to 4:15. The only way to fully escape this is to fully schedule out the work. When you fully schedule out the work, you take control of when the work comes in so that you can better control when the work gets out. And just like a month end close, there has to be an order to which these are done. So. So why not say, here's the price for this date. Here's the price for that date.

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For some reason, this whole like, you know, the myriad of variables in the way a service can be delivered has not become part of the scope conversation historically. In fact, how Something is delivered. And what I most commonly see is it is universally the same across all clients and all engagements. You just have kind of a few things like, you know, we'll get back to you in this timeframe. It includes unlimited support or a couple calls a week, rather than scoping exactly how it's delivered and what your availability is into the agreement. And so to bring this back to the original question, clients are picking the lowest tier offering, but expecting the highest tier service just means we haven't scoped service, the delivery of the scope into that agreement. Right? So if you feel this, they expect the highest tier service, get specific about what that means. Does that mean that they think they can call you and expect you to pick up? Does that mean they think you're going to get back to them within 24 hours? Whatever defines your availability and your turnaround time and all of that. Think of these as scopable items, just like you would preparing a, a 1099 or a tax return or doing payroll or something like that. Like, these are all scopable items. It is worth usually bundling those things into a more simplified vernacular. So like speedy service means one set of things. Maybe that's, you know, email responses within 48 hours, return a call within two days, maybe they get access to a calendar link or something like that. But then you may have even speedier service. You may have a VIP tier, you may have a president's club tier. And that language represents a collection of things on the president's tier. Maybe they can pull you into their slack on the VIP tier. Maybe they get the ability to text the team or they get access to the VIP support phone number. So similar to how you package the scope of what you do, like the actual work, we need to package how it's delivered, otherwise we aren't setting any expectations for clients. But also, it's costing us money, man. It really is. Because that generalized expectation, it doesn't take advantage of the fact that some people will happily pay more because they want more, because they feel like they need more. I mean, most of the entrepreneurs that we support, like these are ambitious people that think they should have access to the front of the line, like they're flying first class. These are the type of people that are like, oh no, I. You see that VIP access. And they're like, yeah, no, I need that. I am a VIP after all. So this is what I need. And the great news here is it's a lot easier to make money on service delivery than it is on doing more work. And so if you've ever found yourself in a position where you're building out these potential packages for a client, and by the time you get to the gold package at the end, you're like giving away your own children. You're like, what's anything and everything in the kitchen sink we've ever done for anybody that we can throw onto this tier, that's not the way to do it. That's not better. That's more better looks like more profitable work. And selling a higher level of service delivery when someone is willing to pay 50% to 100% more for it, that is an easier way to make money than to have to do twice the work. And if this feels like a lot right now, and you're like, man, I don't need more people like kicking down my door to come and work with me, the reason it feels that way is when we're just doing too much right now. And so if people will pay twice as much for this, by the way, in a 30% margin firm, if somebody will pay twice as much, that means that project is over three times as profitable. So you can do a third of the work. Would you be willing to be available or even more available to serve a third of the people? Most of us would say yes to this. Like most of us, the idea of serving fewer people in a deeper way actually sounds really appealing. As opposed to being this volume shop or where anytime a client calls or emails you, it is just like. It just enrages you, right? You're like, I'm too busy to be able to help you right now. For most of us, the notion of doing less and going deeper with those people is really appealing. And so how do you do that if you don't have a language for how you deliver a service? How you help people, you scope the delivery of the service just like you scope the work itself. That's the secret, man. And I would argue that is a better way to make money than then doing more work than selling more scope. This is one of the kind of core messages in the programming in my Live workshop series that we're in the middle of a lot of really positive reviews of this, sort of opening folks's eyes to like, geesh. I'm actually realizing now that I'm leaving a lot of money on the table by not thinking more strategically about how we price not only the work that we do, but our own availability. And it's also a path to kind of putting the toothpaste back in the tube when it comes to the level of access people have to you when we, many of us have kind of over committed ourselves. What do you think? Hopefully something helpful in there for you, especially as we are at the time of the year where we ought to be doing annual renewals and are thinking about the language we use on those proposals to ensure they are setting realistic boundaries and sort of aligning expectations with clients before we get into next year. That's all I got for today gang. Hey, it's great to see you today. Catch you in the next one.

Hey, real quick podcast friends. I'm coming to a city near you running a bunch of live events before the end of the year. We're going to be at Intuit Connect in Vegas. We're going to be in Toronto, in Atlanta, Austin, Oklahoma City, Phoenix, Seattle, Portland, San Francisco, Louisiana Atlanta, Nashville, Chicago, Washington, D.C. philadelphia and Boston. If you are there or any anywhere near there within a half tank's gas up there buddy. I want to see you. We put together some super cool events that I'm very excited about all around getting you and your team aligned. Heading into 2026. The biggest problem I had running a firm was I had an abundance of ideas but was always blocked by trying to get my team bought into those ideas and everybody working in the same direction. And it's why I believe the biggest way I can help you is actually getting your team in the inspired, getting everyone energized for the year to come. So it's not just you, but also because these are live events, you're going to meet a whole bunch of other local practitioners as well, which can almost certainly unlock some cool things for you. I'm especially looking at you solo firm runners and side hustlers where your team effectively is the people you meet along the way, the relationships that you build, the people you can go to with questions when you get stuck on this or that. Going to be a super fun experience experience including for some of these events we're recording like a live interactive version of the podcast where you'll get to be part of the conversation. Very, very excited for these. I want to see you there. To learn more, head over to jasononfirms.com events and I hope to see you there.