Value pricing is becoming more common among attorneys and CPAs across the country. Everyone's talking about it, but very little has been written on how to implement this innovative, lucrative option. The Professional's Guide to Value Billing is designed to provide CPAs, attorneys, and other professionals with the information needed to evaluate the economics of alternative billing methods. This indispensable new tool will help professionals implement the switch from hourly billing to value pricing and perfect this method of pricing within their firms.
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Time is NOT money!!
In 1748 Benjamin Franklin wrote those immortal words: Time is money. One hundred years later, in 1848, Karl Marx and Friedrich Engels posited the labor theory of value in The Communist Manifestoi.e., the value of a commodity is determined by its labor inputs. Subsequently, perhaps the most famous of all lawyers, Abraham Lincoln, said: Time is an attorney's stock in trade. As much as I respect Benjamin Franklin and Abraham Lincoln, they were wrong. And as for Karl Marx, well, communism has been repudiated throughout the world, a dismal failure everywhere it has been tried. Its influence is rapidly diminishing, and the only area where it thrives, besides college campuses, is the professional service firm.Professionals have been incorrectly trained to correlate their labor efforts with the value of their services. However, Marx's labor theory of value is emphatically false. For if it were true, land shouldn't have any value, because it has no labor inputs. Or a rock found next to a diamond should be of equal value, since each took the same amount of labor hours to extract. Yet, how many rocks do you see displayed in the local mall's jewelry store? The fact of the matter is, value is subjective, and is determined solely by the customer. Ultimately, the price of all goods and services in the marketplace are determined by just two factors: preferences and technology. Customers are buying results, not efforts. Measuring, and charging by, hours spent is tracking efforts, not results. In effect, professionals are chasing the wrong rabbit.I believe professionals need to price based upon the value of their services to the customer, not the labor hours involved in producing the service. For too long the professions have been weaned to the Almighty Hour, much to their disadvantage. The billable hour is comfortable for most professionals because it shifts one hundred percent of the risk to the customer. But in a free market, when you take less risk, your rewards will be limited. This is the main objection I have to the Almighty Hour: While it provides a comfortable floor beneath usin terms of revenue and profitabilityit also places an artificial ceiling above our heads, one that we cannot, as a profession, break through. This is borne out by analyzing average realization rates for accounting firms throughout the country: They are less than 100% of standard billable rates. However, that ceiling is artificial, and we placed it there, not our customers.It is time for professionals to reject the false measurement of value proffered by Karl Marx, and embrace Value Pricing. That is the reason I wrote this book: To kill, once and for all, the billable hour. We need to embrace the subjective theory of value, and ascertain for each customer, for each service, the value we are adding to their lives, and price accordingly. Price is a major marketing decision, and far too important to be left to the 50+ year old practice of hourly billing. This book will provide you with the theoretical foundations of value, from an economic perspective. Also, it explores how other industries price their goods and services. It discusses the history of hourly billing, what customers really buy, the ethics of hourly billing and value pricing, and the all-important issue of self-esteem. It also provides a proven method for implementing Value Pricing into your professional firm by utilizing Fixed Price Agreements and Change Orders, as well as innovative pricing methods you can utilize to receive the full value of the services you provide. It comes with a computer disk that contains sample checklists, Fixed Price Agreements, and Change Orders. Also, a test is available in order to obtain four hours of Continuing Professional Education credit.Any professional who is interested in being among the leaders of their profession moving away from the hourly billing method to achieve a competitive differentiation and who is tired of sacrificing profits on the Altar of the Almighty Hour should read this book.Here is what some leading experts in the accounting and legal profession have had to say about The Professional's Guide to Value Pricing: Ron Baker is arguably the profession's most original thinker. If you want to make moneyand I mean significantly more moneyfrom your practice, this book is a must-read. Ron understands this subject like the back of his hand and he's passionate about it. He could safely offer a hundred-fold money-back guarantee.Chris Frederiksen, CPAFrederiksen & Co.Mill Valley, California, and Bristol, United KingdomRon Baker is one of the master thinkers in the accounting profession. Few people have thought as long and hard about Total Quality Service and Value Pricing as he has. Every serious CPA who wants to add value and be compensated accordingly should own, read, and re-read this extraordinary book.Troy Waugh, CPA, MBAPresident, Waugh & Co.Brentwood, TennesseeRon Baker is a maverick CPA. He is one of the few original thinkers in our profession. This book is a must-read for CPAs who are tired of being underpaid for what they do and are willing to change how they do business. His book is a guidepost for the ultimate success of the professional firm because it is customer focusedfrom service delivery and collection to service retention.Allan S. Boress, CPA, CFEAllan S. Boress and AssociatesI have been involved in moving the legal and CPA professions to alternative billing since 1981. I know the difficulties of changing a professional's paradigm from hourly billing to billing based on value added. This book provides excellent guidance and precedents for installing alternative billing. Professionals who use the help available in this book will be able to increase their own income while providing clients top quality service at lower costsa win-win situation.William Cobb, CPAConsultant to the legal and accounting professions
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Book Description Harcourt Brace Professional Pub, 1998. Paperback. Book Condition: New. book. Bookseller Inventory # 156062917