Interesting Discussion on accountingweb.co.uk

It always amazes to see the comments from practitioners regarding the great debate between fixed prices and hourly billing. Over at accountingweb.co.uk there is an interesting discussion taking place. VeraSage Senior Fellow Paul Kennedy weighed in with a logical response to skeptics. Think it will sway anyone? I doubt it. Why can’t accountants see they sell intellectual capital and not time? Their clients don’t buy time, period. And why don’t they see how customers want certainty in price, not ranges and hourly rates.

The theory is quite simple. But if you start with the wrong theory (i.e., labor equates to value), the fallacies get incredibly complicated. I hope some of you will weigh in on this debate (you’ll have to register in order to post a comment).

Comments

  1. I believe what Simon fails to see is that the fee is not based on the amount of work HE performs, but on the value the client perceives in the solution Simon provides. But this approach is totally out of his paradigm because he’s always operated on this self-centred time-based paradigm, which automatically causes a commodity perception from buyers.

    Simon basically operates as a manufacturing plant doling out hours of accounting tasks, working at his proverbial production belt just as Chaplin did in Modern Times.

    Simon: Of course, some people can work faster/slower than others so it is very important to set a realistic hourly rate.

    But this approach creates a realistic, in other words, a competitively mediocre firm. Slow, incompetent accountants penalise their clients and earn more. Proficient and efficient accountants get penalilsed for their expertise. It sounds plain retarded to me.

  2. Hi Tom,

    As usual, you are right on!
    Ron

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