Automation and value pricing, Carbon Group’s recipe for success
Technology was once considered a threat that would send accounting professionals and bookkeepers by way of the dodo. But, of course, we know now that it’s an all-too-important component that trims time, improves efficiencies and increases productivity. In fact, in a recent list compiled by the US Department of Labour of jobs to be speedily overtaken by robots, accounting and bookkeeping were nowhere to be found.
And as cloud-based automation makes work more efficient, it has also changed the way accounting professionals and bookkeepers charge for their services. Many are switching from hourly billing to value pricing because they can now do more for their customers.
In this model, the price and services are agreed before the work starts. This means predictable and consistent revenue for the business, whilst the customer will know exactly what they’re getting.
How One Accounting Firm Makes It Work
Carbon Group is an organisation where cloud adoption and value pricing began at inception. A start-up with its roots in accounting and bookkeeping, Carbon has expanded to six different divisions since opening its doors in 2014.
Carbon was recently named the Bookkeeping Firm of the Year at the 2017 Australian Accounting Awards, having clinched the 2016 Boutique Firm of the Year award and been the proud recipient of the National Bookkeeping Partner of the Year title at the 2014 and 2015 Xero Awards.
TSheets connected with Jamie Davison, CPA, co-founder and Managing Partner of Carbon’s Bookkeeping Division and a TSheetsPRO, on how his organisation has leveraged every benefit of cloud technology and what value pricing has done to help their customers grow.
TSheets: Tell us why you chose to get on the cloud.
Jamie: The accuracy of data in real time allowed our staff to work from home and our business to be scalable to expand to multiple locations in Perth, Melbourne and the rest of the country without the infrastructure costs normally associated with such growth.
How has the cloud changed your operations and processes?
On the customer side, we can login and access their data from anywhere on operational matters, reserving face-to-face meetings to focus on growing their business instead. And we pass on the reward to our staff with flexible working arrangements and the option to work at any location!
Congratulations on being named the Bookkeeping Firm of the Year! That must be a great feeling.
We’ve had a great amount of publicity as a result. It highlights us as the industry leaders and reassures our customers and our team that we’re doing it right!
You Know Your Worth. Now Communicate Your Value.
When CPA Ron Baker first introduced ‘value pricing’ to the accounting world, he called it the superior model for billing and termed hourly billing ‘antiquated’. Almost two decades later, the term is still much debated.
Simply put, value pricing allows accounting professionals to charge for their infinite expertise and experience as industry leaders, not the time they spend working. In his pursuit, Baker founded the VeraSage Institute and states the accounting and bookkeeping professions reside in a knowledge economy and cannot be treated like a commodity. He believes the latter is the reason many firms still undervalue the work they do.
Tell us about why value pricing works for Carbon.
It is the only way we have ever operated. It removes unproductive time spent on quoting, billing or discussion when the bill is different than expected. This allows us to focus on doing our job.
How do your customers respond?
Our customers love it! Again, this is not our point of difference and we don’t focus on it. This is just how we operate. It’s about how we can help our customers and pricing is just the next step in the progression.
Be a Transparent Business Partner and Trusted Adviser
What’s your advice to firms that want to move to value pricing?
If you honestly believe it’s the right decision for you and the customers, that’s really all that matters.
Was there a time when a customer requested something outside of the agreed scope?
We have six industries under the Carbon brand, so clients are always jumping into new Carbon services. These are all handled by industry experts who head up each division.
What if there was an error in a quote?
If there is a mistake in your quote, don’t correct it by cutting corners or adding out-of-scope charges. Take it as a lesson and learn from it.
You’ve said in other interviews how the accounting profession must ensure “the personal touch doesn’t disappear”. Can you elaborate?
Technology is changing the industry in many ways, but it will never replace the advice of our trusted advisers who add enormous value to our customer’s business.
So what’s next for Carbon and Carbonites?
We are looking to take Carbon nationwide, so we’re looking for partnerships in Adelaide and East Coast Australia to grow with us. If anyone is reading this piece and is interested, we’d love to talk to you!
Are you ready to move your firm forward? Just like Carbon, you can join a community of 15,000+ successful, innovative and inspiring accounting professionals by becoming a TSheetsPRO!