That’s right. I said it.
For years I’ve had standard bookkeeping packages and offered them to clients… In reality? I just couldn’t get them work. I even tried given them names: “Bronze, Silver, Gold” and assigning set services in each level. Didn’t really make a difference. But MAN, I really did to make these a part of my practice, especially after I hired people to work with me.
When I got to the point of quoting services, I would present the packages. One of two things would happen. Either the client would say: “Well, those are nice, but what I really need is…” and then describe exactly the services they were looking to have us provide. This was good! It would leave me an opening to give them a price for what they were asking. Or, the client would say: “Thanks, but no thanks, I”ve decided to see other options”. This was not good. Â It meant the client had had moved on and I’d missed out.
If the client hadn’t already completely written us off, when pressed, they could never quite pinpoint why they decided to go another route. I eventually figured out after some discussions something that I’ve always known, but in these situations, was missing it completely. First: the client didn’t know what they needed; didn’t know what they didn’t know. Second, they wanted choices, and felt these packages didn’t offer that.
Early on in 2014, I took a different approach with prospective clients. Rather than offering packages that included set services, I started offering a more a la carte system. The result? Out of all the prospects that approached Kildal Services LLC in the first quarter, we’ve closed all but two. For the record, those 2, we never got to the point where we could even quote services, because the clients were non-responsive after the initial contact.
What this evolved into was a system that we call “Base Plus” billing. Once we’ve done our initial client interview, data review and needs analysis, we offer different levels of service, starting at the base:
Basic services that include services such as account reconciliation, after the fact bookkeeping via bank feeds and a few other simple services.
The client has the option of including “Add On” services, resulting in Basic +1, Basic +2, and so on. Add ons include payroll, Accounts Payable management, Accounts Receivable management, etc.
Each of these has limitations. For instance, the payroll option covers up to 5 employees, with additional fees for any employees over that initial 5. If the client requires something above and beyond these limitations, we provide them a custom quote.
Two things I want to mention. I understand that there are some firms that have made the standard packages work and I commend them. I’ve just found that for the types of small businesses that my practice (and the ProAdvisors for which I’ve done consulting) services, they’re not the best option. Also, for all of those people that I’ve presented to and taught to build packages – at the time, I truly believed that these would work, and up until recently, I regularly offered them to clients.
This method makes it so that the client is able to choose a level of service that they’re comfortable with (for instance, some clients that have been doing everything themselves since they started their business just aren’t ready to turn over paying bills right away), and that their current budget allows. They can see that services can be customized to their needs, and that they’re scalable as their company grows.
Often, clients come to us because often they come to us feeling just beat because they’re struggling with their bookkeeping. They could be doing other things – working on growing their business, or spending more time with their family. The two most surprising – and important – side effects that I’ve noticed since implementing the “BasePlus” billing method is that the client feels great sense of empowerment over this and they understand you’re creating a truly collaborative relationship.
Interesting perspective, Stacy, as yours always are. 🙂
I have noticed a similar thing with some potential clients, and nearly everyone looks at what I offer in my bronze, silver, and gold packages and often turns it into an a la carte by saying, “Well I don’t need that, how much would it be without it,” etc. I have been considering my own modified version of what you say, first with my bronze, silver, and gold packages, maybe at a somewhat lower rate, and a second page with a build your own service with a base rate and a variety of add-ons that they can pick and choose. In reality, I expect that for most, they will end up paying more than they would for the same services in a package, but maybe that doesn’t matter because they are in control. Do you find that. or with your changes is it an apples and oranges thing where you really can’t compare?
Brent,
First, thanks!
Second, the clients are paying about the same, but the difference is my team has doesn’t have to wait on ME to get pricing for the client.
They now have better tools to do what I hired them to do – manage client accounts – and I have more time to focus on bringing in those clients.
-SK
Your last paragraph says it all…except your team must also feel incredibly empowered as well. And when they feel empowered, they often have much higher productivity.
Great article. Thanks for sharing your secret sauce.
Thank Richard!
-StacyK
Hi Stacy!
Thanks for sharing – you have just confirmed what I always suspected. Rather than going the Package Route the Basic Plus services makes more sense for all as an alternative to hourly billing. My reluctance to implement Package billing has been because of these concerns as clients like a-la-carte. Time to review with this alternative model!
Cheers
Di
Diane,
Hi! Thanks for the comment. I think packages can work for some firms, I just haven’t been able to make them for mine.
-StacyK
I’ve had the same sort of results, but I work alone. I’ve found that potential clients want a basic level and then we expand from there, depending on what they need — and they all need something different. When I have a prospective client they often don’t realize the wide range of services I offer, and as the relationship grows, so does the level of work they need.
Monique,
Thanks for the comment, and it’s great that you’ve got a system that works! I used to do individual quotes, but found while the process we use to collaborate may differ a bit between clients, the basic services really don’t. As Kildal Services has grown, I’ve found BasePlus keeps everyone on the same page 🙂
-StacyK
Aloha Stacy!
A big Mahalo for this article. I tried packages and mostly lost my shirt due to project scope drift :/))
My clients also seemed to want ala carte and very much didn’t know what they didn’t know….
I built the packages, but clients wanted to pick them apart for which pieces they actually wanted, so I ended up with your “Base Plus” type arrangement with most clients. NOW I know I’m not alone…the packages didn’t work for others and that makes me feel great! I think they work better for CPAs and maybe even bookkeepers…….but I’m just a ProAdvisor. I don’t seek bookkeeping work and I’m not a CPA.
Thanks bunches again!
Tap
Tap!
Hey sister! Thanks for the comment:)
As a bookkeeper, the packages just never worked for us either.
Glad to hear you found a system that works, and I hope I get back out to your neck of the woods again sometime!
-StacyK
Thanks Stacey…I have been struggling for some time with the same question, how to present my bookkeeping services and Base plus was an option that I was considering and now I think I am going to try it out!!
ZulmaP,
Thanks for the comment, and I’m glad to hear it – keep us posted 🙂
-StacyK
I’ve been charging by the hour for years. I would like to go to a flat rate fee structure, but the problem I keep running into is some of my clients are more time consuming than others. I am a full charge bookkeeper for one client who has 3 times the volume of work than my other clients plus he is constantly requesting a variety of specialized reports. The base plus price structure sounds good, but how do a set a base with this type of situation?
Kerri,
Thanks for the comment!
As I mentioned, we still do custom pricing and/or hourly billing for some clients or projects. As with any billing method, I think you have to find a sweet spot that works for both your firm and the client. I just wanted to share the one we happened to find 🙂
I was recently out at the Intuit office in Mt View, explaining this to some people on the QBO/QBOA development teams, and one person hit the nail on the head when he asked: “So every client is like a snowflake?”
-StacyK
Great article Stacy! I have struggled with billing packages as well, and I actually have had more luck with hourly billing for my clients, but I really really like this method. Like yours, my clients like to do some of their bookkeeping themselves. The basics are a great way to get going with them and to get to know their business and bookkeeping abilities. After I develop a close working relationship and build trust, we start talking about adding services, adding features and adding integrations. I’m going to give this model a whirl! Thanks for sharing your epiphany!
Kathy,
Thanks for the comment!
Keep us posted 🙂
-StacyK
Stacy,
This confirms my suspicion about fixed billing that has been advocated by Xero and others. I couldn’t see a way to make it work for new clients. Every client is unique if you are a small company. It’s only when your company is extremely large that you can start calculating average time spent per client and such. The variance per client is too high for smaller firms.
Laura,
Thanks for the comment 🙂
I could never make standard “here’s what you get” packages work, but we’ve found that the BasePlus works much better. Clients are able to pick and choose what they want/need. Again, we still have to do custom pricing at times, but for the most part, we found a sweet spot (at least for now!).
-StacyK
Thanks for the article!
As a startup owner, this concept is excellent. One big problem with charging an hourly rate is the difference in client. In a smaller market where everyone knows everyone, an issue could arise by charging a client at the same rate as a larger (or smaller) company. It’s important to highlight the value of service at the initial interview in order to avoid such instances. Once again thanks for the insight, best wishes.
Abelardo Resendez
Thank you!
-SIK