Accounting
Rethink pricing and transform the accounting firm employee experience
The accounting profession may have been built on numbers and spreadsheets, but today it’s also a people business. Client relationships, employee morale and firm culture are as important to your success as the software that runs your programs.
Think about it: There is a stark contrast between the people side of the business and the way most firms charge for their services. Nobody became an accountant to track their time in 10-minute increments or spend time filling out timesheets. Yet, at a time when employee motivation and client retention are of the upmost importance, firms employ an outdated pricing model almost designed to frustrate employees and clients alike. It makes no sense at all!
Here are six ways you can build a better firm culture while attracting and retaining top-level employees. It comes down to changing a single fundamental of your business — your pricing model.
1. Free employees from the tyranny of the clock. Your staff aren’t factory workers, so why treat them as if they were? These highly trained, smart professional people are tasked with solving complex client problems and providing expert guidance, not obsessing over timesheets while fighting to meet arbitrary billing goals. If you switch their focus from the number of hours they bill per week to the knowledge and expertise they bring to the game, their work will become more meaningful to them. Clients will feel the change.
Imagine how much more satisfying it is to know you’re making a difference in a client’s business instead of racing against a clock that never stops.
2. Empower employees to focus on results. No one outside of your office really cares how long it took to finish a project. They care about the quality of the work and how it benefits them. Your employees should have the same mindset. They should understand the scope of a project and what the client really needs. They should know how the project they are working on fits into the grand scheme of a client’s financial puzzle. Then they should apply everything they’ve learned to arrive at a suitable solution that will make clients happy.
You can add up time all you want, but the final score is what really counts. Value pricing understands this and shifts employee incentives from the amount of time they work to the quality and value of the work they do. In so doing, it aligns employee incentives with what’s good for the client.
3. Improve work-life balance. Burnout is a real problem and the billable hour is one of its biggest drivers. Most accountants have sat down at some point in their professional lives and wondered how to balance their family life with a profession that measures success by the amount of time they spend in their office. The pressure to constantly log more hours can lead to long days, late nights, and a lot of unnecessary stress.
Value pricing is one of the keys to creating a healthier, more balanced work environment — one where employees feel more fulfilled while still generating profits for the company. An odd thing happens when results become the focus: Employees can manage their time more effectively and find ways to work more efficiently. There’s less overtime, fewer late nights, more family time and a far healthier balance between work and personal life.
Happy employees are productive employees. The benefits of switching to a value pricing model will ripple through the firm, improving retention rates while encouraging higher-quality work.
4. Create a more positive office culture. Slaves to the billable hour spend a lot of time watching the clock and worrying about wasting time on anything beyond the spread sheet in front of them. It’s a recipe for drudgery. An office culture where collaboration, innovation and engagement fade.
Think about what happens when the focus shifts to client results. Focusing on results encourages everything the billable hour discourages: Collaboration. Innovation. Attention to detail. Predictably, employees will work together to deliver better outcomes for clients, knowing their contributions are valued.
Value pricing also makes it easier to recognize and reward employees for things that really matter — problem-solving, client satisfaction and innovation. This creates a culture where quality is prioritized over quantity. And that’s the kind of culture where people want to stick around.
5. Attract and retain top talent. Every generation has its unique perspectives, and you can’t expect millennial employees to respond to the same incentives as Gen Zers. However, there are some commonalities between all generations. No matter their age, most people want to be recognized for their accomplishments and their unique capabilities, rather than their sameness. A strong firm culture acknowledges these facts and looks for ways to uniquely help employees build more fulfilling careers while improving the overall quality of service your firm provides.
A firm that values unique employee expertise and provides better growth opportunities is bound to both attract and retain top talent. Better talent leads to better quality service which, in turn, leads to greater client satisfaction. It’s a positive circle that starts with value pricing and ends up helping you build a culture of continuous improvement. A win-win situation for employees looking for more professional fulfillment and clients looking for increasingly better results.
6. Encourage professional growth. It stands to reason that if the incentive is to deliver expert services and solve client problems, employees will spend more time on professional development because it holds the keys to their success. Again, value pricing aligns employee performance with client needs.
Beyond sharpening their expertise, this results-based focus will also encourage employees to think about their day-to-day activities in a different way. The focus will shift from grinding out hours to delivering superior results. Stronger client relationships will follow.
A happier, healthier workplace starts with pricing
Value pricing is not a cure-all for every problem facing today’s accounting firms. The work will still be challenging, even more so in many instances. There will still be some long hours required to deliver timely. And there will still be those overly demanding clients who try to get more than the agreed-up scope. But there is probably no bigger step a firm can take toward meeting the challenges facing modern accounting firms than implementing a value pricing model.
At the end of the day, pricing is about people as much as it’s about profits. Moving away from the billable hour and embracing value pricing aligns firm success with client success. In so doing, it creates a more positive, fulfilling work environment. A culture of collaboration and growth will flourish while employees will enjoy improved work/life balance.
In the end, value pricing isn’t just a better way to do business. It’s a better way to work.
The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.
The
- ISA 620, Using the Work of an Auditor’s Expert;
- ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
- ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
- ISRS 4400 (Revised), Agreed-upon Procedures Engagements.
The IAASB is asking for comments via a digital response template that can be found on the
In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.
President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an
The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings.
Trump has
Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.
Food prices could rise by 2.6% in the short run due to tariffs, according to an
The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.
Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist
Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time.
“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said.
One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load.
“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai.
Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies.
“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.
However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area.
“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai.
As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales.
“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai.
While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves.
“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”
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