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Breaking the Billable Hour | Gear Up For Growth
Feb 7, 2025
Michelle Golden-River, CEO of 4 LLC and a pioneer in CPA firm growth strategies, joins David Yeghiaian, Chief Strategy Officer for KerberRose, to challenge traditional billing practices. They argue that relying on billable hours limits profitability and suggest embracing value-based pricing instead. Golden-River highlights the need for a broader business model change to ease fears around pricing. The duo also discusses the transformative impact of clear project scopes and the importance of celebrating innovative strategies within firms to enhance client relationships.
49:37
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Quick takeaways
- Transitioning from time-based billing to value-based pricing is essential for firms to enhance client relationships and profitability.
- Overcoming resistance to change in billing models requires a broader rethinking of business structures and effective client communication strategies.
Deep dives
Challenges of Shifting from Billable Hours
A significant barrier to changing the traditional billing model in accounting firms is the resistance to change. Many accountants are hesitant due to concerns about accurately estimating project costs, fearing they might undervalue their work or end up with unanticipated costs for clients. Additionally, the reliance on tracking billable hours as a primary cost metric has become ingrained in their business model, making it difficult to envision a new pricing structure. Addressing these challenges requires a fundamental shift in the overall business model that extends beyond just altering revenue structures.
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