Everyone loves free stuff! This is a huge contrast to what we talk about often with Practice Forward firms when making sure that you’re being compensated for your value.
The pro bono accounting services conundrum
Often there is some trepidation in offering pro bono accounting services and it’s difficult to choose who would get “free” work and how much to give away for free. Sometimes the client doesn’t appreciate the value you’re giving them when you do offer pro bono services. When a client gets something for free, they often don’t place the same value on it versus if they had to pay for services. And everyone knows the example: you put a couch on the curb and call it free, and no one wants it. But if you put a $10 price tag on it, someone comes by and picks it up.
In this week’s blog, based on the Pulse of the Practice podcast “Free Stuff”, we’re going to talk about giving away “free stuff,” or pro bono accounting services, and how to go about it.
Understanding the value of pro bono accounting services
In certain situations where people fall upon hardship, you may decide to help somebody in need, as many businesses do. If you want to give away “free stuff” however; you can quantify it, and that establishes it’s actually worth something. Internally for the firm what that does is helps you set a budget for how much free work you can give away.
Occasionally you may find yourself getting pulled in emotionally with certain clients, and feel like you want to help someone, but if you can’t quantify it, then you are just giving services away for free that you haven’t allocated properly. At the end of the day, you are operating a business so giving services away for free without a plan can be detrimental if not done the right way.
You can dip into that pool of what you have set aside in your budget for advisory services. Once you use up those resources, you may have to decide what your limit is, but it’s always good practice to offer some pro bono work. A plan is important as far as how often you choose to give “stuff” away for free. You’ve got to make sure you can quantify pro bono accounting services to fit it within your own scope of budget. But you’ve got to bill people for it regardless, just to show the value of your work.
Making wise choices, not emotional ones
If you are giving work away off the cuff, you don’t have the opportunity to convey the value to the customer. If you are going to provide pro bono accounting services, make sure that your client understand the value they’re getting, and have some of that pro-bono budget set aside. If you’re going to give a client pro bono accounting services, plan it in your annual budget, bill them, then deduct the amount off so they understand the value of the services offered. If you do not give them a bill or you give them a bill for zero, the client may undervalue your services.
From a client perspective, if you give me a bill for $0 and say “Hey, let me know when you have the next question,” I don’t see the value of your time with me. And I am more likely, as a client, to abuse your kindness when you don’t put a dollar value on it.
On the other hand, you may offer some work for free to a client you admire and like on a personal level. This is an emotional decision, not a strategic one.
It’s not just billing that is affected when you do pro bono work, but surety of the client relationship. If you are unsure how to handle pro bono accounting services, the client may be unsure as well. If you don’t bill the client for certain services, and then change and bill them later for future work, and they’re thinking it’s still free, this could become problematic. It’s better to tackle the billing and charges up front and be clear about what is free and what may not be in the future. If someone has an issue paying a certain fee, you want to know it before you start the work to make sure everyone is on the same page.
The big takeaway is that despite all the conversation on the value of billing, be sure you are compensated for your time, but know that it is okay to be generous as well and reflects well on your firm. It is okay to be compassionate and to do good things for the right people for the right reasons, but be proactive with it. Have a plan for what you’re going to do and set aside that budget in advance. Communicate thoroughly with the client about what the value of any pro bono accounting services are worth if they were going to be charged. This will set you up for success as you move forward with offering your “free stuff”.
Listen to the “Free Stuff” episode of the Pulse of the Practice podcast on your preferred platform (Google Play, Apple, Spotify, Stitcher) or here.
You may also like this whitepaper:
Building the accounting firm of the future starts with changing your mindset. Your clients and your prospects expect more from you. Reform your accounting business to exceed those expectations. Take the first step by reading our new white paper, The Future CPA: Make Your Practice The Accounting Firm of the Future. You’ll learn about the seismic changes affecting your profession, along with a roadmap to help you navigate them.