NAB’s inaugural Professional Services Insights report found 54 per cent of SMEs prefer a fixed fee arrangement and 19 per cent prefer a hybrid of time and value-based billing.
About 16 per cent said they prefer hourly billing alone, versus 14 per cent saying they prefer a purely value-based billing arrangement.
A further 8 per cent are satisfied with a retainer arrangement, and 7 per cent are willing to pay per form, such as per tax return. The remainder fell into the “other” or “don’t care” category.
“Anecdotally, until we had this evidence, we have been hearing that clients are looking for more value-based and fixed arrangements,” NAB’s general manager for professional services, Brett Moore, told My Business’ sister publication, Accountants Daily.
These results mirror the experience of James Henderson, managing director at HLB Mann Judd, who said clients are ultimately looking for predictability in their budgets.
“Year by year, they want to know what it’s going to cost on an annual basis to have their regular compliance work done,” Mr Henderson said.
“They don’t like surprises. It’s good financial management to know what costs you're up for,” he said.
These results feed into a broader debate about time-based billing in accounting, which remains a touchy subject.
Looking at the bookkeeping market, All That Counts director Lielette Calleja said many firms are reluctant to change their legacy habits.
“Speaking with several bookkeepers at the Accounting Business Expo, I found that they were reluctant to shift to value-based pricing as their long-standing clients prefer they still bill by the hour. It’s a legacy issue and many just don’t want to have that confronting conversation with their clients,” she said.
“Shifting your business to a new pricing model takes effort and time which is something that many bookkeepers don’t have.”