Your hourly rate is costing you more than you think

You’ve said most firms don’t actually have a pricing problem—they have a courage problem. What does that look like in practice, and what are the warning signs that a firm owner is underpricing out of fear rather than strategy?

Most firms don’t have a pricing problem. They have a measurement problem that hides a courage problem. We track hours, realization and utilization like it means something, then change nothing. Those metrics were built for a time when effort equaled value. 

That is just not true anymore. How long something takes is irrelevant. If it were, a well-done steak would cost more than a rare one because it sat on the grill longer. Same product, same chef, different time. No one prices like that. Yet we do it every day. Firms measure activity instead of impact. What matters is whether the client makes better decisions faster, sees fewer surprises, and runs a better business because of you. 

The warning signs are clear. You lead with tasks, adjust your fee before the client reacts, and stay busy without moving your firm forward. That’s not strategy. That’s fear dressed up as data. 

Many accounting professionals sell themselves short by underpricing their services. What tips can you share on building quotes based on value and expertise rather than tasks?

Most accountants underprice because they describe what they do instead of what changes. Clients do not buy reconciliations. They buy clarity, control and fewer bad surprises. So start with a diagnosis, not a quote. 

Ask why now, what is broken and what it is costing them to stay the same. Then quantify the impact in plain terms and package the outcome, not the tasks. Instead of listing deliverables, say what improves. Faster decisions, predictable cash, no tax surprises. 

Give them clear options that solve different levels of problems, not more features. Same work, different framing. One sounds like a chore list. The other sounds like a result. So before you price anything, answer this. What changes in their business because you showed up? If you cannot say that clearly, you are guessing on price.  

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What are some common mistakes accountants make when explaining fee increases to long-term clients, and how can they communicate changes without sounding apologetic or defensive?

The biggest mistake accountants make is turning a fee increase into a long apology instead of a clear decision. They over-explain, justify and soften the message because they forget the value they bring. 

You are smarter than you think, and your clients rely on that. When you lead with confidence, they feel it. When you sound unsure, they question everything. Keep it simple and direct. State the new investment, connect it to the outcomes you deliver, and stop talking. No long stories, no defensive tone, no rushing to fill silence. 

This is not about asking permission. It is about owning the role you play in their business. Stand in your brilliance. Do not shrink at the moment it matters most. You are not one of many options. You are the one helping them make better decisions. Realize that you are the prize, and communicate like it.  

For firms that are nervous about losing clients, what metrics or red flags should they look for that signal it’s time to let go of underpriced work?

Firms hang on to underpriced clients because they fear the gap, but this is a business and clients come and go. The red flags are obvious if you stop ignoring them. You wake up and dread their name. The work drags because they are disorganized. You know in your gut you are underpaid and you keep quiet anyway. 

Fix it or release it. Tell them the new price, and if they will not pay, let them go. There are people who will pay for what you do, just like some people choose Ruth's Chris Steak House or Morton's, while others choose fast food. Both models exist. You get to choose which one you run. 

If a client is not aligned with your value, they are costing you time, energy and better opportunities. Stop acting surprised when low-paying work brings low-quality results. Decide who you serve and act like it.

(Image courtesy Debra Kilsheimer)

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