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Are you working too much and earning too little? Many CPA professionals have maxed out their time and are still not generating the income they need or deserve. If this is you, take heart—increasing your income is possible.

Start by acknowledging that your time is a limited resource. When your income is connected to your time, you will sacrifice a lot to bring in additional income and still fall short of your income potential.

With your time already maxed out, the ideal option to earn more income is to increase your rates; but raising rates can feel uncomfortable and scary. If you’re uncertain about whether you can or should raise your rates, here are five signs that you are undercharging your clients.

 Five Signs You’re Undercharging Your Clients 

1. Low profit margin. Take a look at your profit margins. You will likely notice that the clients paying you the most are giving you the lowest profit margin—even though you do more complex work for them than for other clients.
2. Your paycheck. Are you paying yourself? When was the last time you gave yourself a raise?
3. Everyone says “yes.” If every potential client says “yes” to becoming a client, you are probably undercharging.
4. Not enough hours. Because your fees are directly connected to your time, you’ve maxed out your time. What have you given up in order to increase your revenues? Exercise? Vacations? Family time?
5. Burnout and resentment. When you’re working hard and not getting the results you hope for, it’s easy to feel resentful and become burnt out.

Are you experiencing any of these five signs? If so, it may be time to increase your rates.

The key to raising your rates is to separate your fees from your time. Start by thinking about what your clients value. Do they really care about your time, as in, “I want to buy some of my CPA’s time?” It’s more likely that your clients care about what you can do for them. What do clients need that you can help with?

• Speed – Clients in many industries are willing to pay more for work requested and completed in a short amount of time. (Think paying more for overnight shipping instead of standard.)
• Ease – Clients are focused on the many facets of their business. You can make their business finances, taxes, etc. much easier for them—removing the complication and stress of those tasks.
• Money savings – As you work with your clients on their business, your expertise can save them money. You might help them save in small ways such as discovering redundant spending or unused subscriptions—or with larger issues such as contract review and negotiation.
• Money making – As a CPA professional you can give clients a great deal of financial guidance that will improve their bottom line. For example, you can offer insights as to their existing margins and how to improve them. You might also help clients with budgeting and forecasting so they can expand.

Once you identify the unique value you offer your clients, you’re on your way to creating a pricing structure that features your valuable services rather than an hourly rate. Creating a value-based pricing structure releases you from the limits of time-based pricing and enables you to increase your rates and your clients’ satisfaction.

Free Resource: Get Loren’s free guide on how to raise your rates.

Loren Fogelman is the founder of Business Success Solution, and has consistently been recognized by HubSpot in its annual list of the world’s top 22 business coaches. Loren’s company, Business Success Solution, empowers accounting professionals to take charge of their business and double revenues while working half the time.

Attend an upcoming webinar presented by Loren Fogelman:  How to Raise Your Rates With Existing Clients

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