Value Pricing And The Demise Of The Billable Hour

Date: 01/04/2011

It's time to bury the billable hour once and for all - and start pricing on value instead. That's Ron Baker's radical view for all professional firms. Accountants take note!

Why do so many accounting firms refuse to budge from the age-old practice of charging by the billable hour? According to Ron Baker, whose latest book is titled, "Implementing Value Pricing: a Radical Business Model for Professional Firms", it's because they're used to it, it's easy, everyone understands it, and it's good enough. But being "good enough" isn't the way to optimise your offering to clients, Ron says. He argues that it's time to ditch the billable hour and the timesheets that go with it - forever. Professional firms should switch from "Value Billing" to "Value Pricing", and that means providing a price tailored to the needs of individual clients, negotiated in advance of the work. It requires a whole new way of costing the work you do and it throws new perspectives on buildingrelationships with clients.