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Accounting practices using cloud technology to improve efficiency are moving towards a fix-fee billing model as a way to boost their own margins, says Sage.
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Margins driving shift to fixed-fee billing, says Sage
10 August 2015
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8 minute read
Speaking to AccountantsDaily, Alan Osrin, Sage Australia chief executive, said the industry is currently shifting billing models to take advantage of changes driven by technology.
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“There’s definitely a shift towards fixed-fee billing, no question about it," he said.
“Cloud software is going to make some practices more efficient, and the amount of compliance work will reduce over time, so as they move more to advisory services where they actually provide more value than they have previously, then I think fixed-fee billing will become more prevalent,” Mr Osrin said.
“It’s a case where often the fixed fee will suit the end-user more but it’s also a case of efficiency and it’s about the accountants doing the work in less time but extracting the value that they may have previously or more value from the client.”
“It’s the case of an accounting practice working more efficiently to actually improve its own margins; it’s not all about the client.”
Mr Osrin said he in favour of fixed fee billing as it rewards the accountant for the actual value they provide.
“It’s the same as providing any service, if the client sees value in it and you agree on a fee, everyone is going to be happy,” he said.
“On a personal level, I’d much rather say quote me a fee. If I’m happy with that fee, that’s fine; if you do it in half the amount of time, good luck to you; if you use a less-qualified person but I get the same result, I don’t mind, as long as the quality of work is there and I know what I’m in for at the end of it.”
While Mr Osrin said there is certainly a shift to fixed-fee billing underway, he believes some firms will adopt a hybrid billing model in the short term to accommodate existing compliance activity.
“I think that a lot of accountants are still transitioning into this fixed-fee space and I think there will be a hybrid because some compliance work may be more suited to time-based billing and some accountants are happier working that way," Mr Osrin said.
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