Comment to Alex Koltin in CPA Trendlines

In post published yesterday in CPA Trendlines Alex Koltin argues that “I think the value billing phenomenon (throw out your timesheets and just bill for value!) will lose some of its steam. I sense some of the firms that have executed the strategy are having some challenges when they are trying to measure associate and partner performance…”

Here is my comment:

Hi Alex, I appreciate you perspective. I think you have analyzed some of the challenges quite well.

However, one quibble is your use of the term “value billing.” True advocates never use this term. To us (yes, I am one of them) “value billing” is akin to saying “soak the rich” when referring to tax increases. It is derogatory. We use the term value-led pricing or value pricing when referring to the process. With a customer, it is always a fixed price.

Now as to your issue with timesheets and their use “to measure associate and partner performance,” I must ask a few questions:

1. Are all hours billed “good” hours?
2. Are all customers (I know clients) “good” customers?
3. Are all timesheets accurately completed?

If you answer “no” to any of the three, then you must admit that timesheets are hopelessly flawed as a tool for measuring performance. While they may be precise (1756.2 hours billed this year), they are precisely wrong.

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