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CPA & Consultant for Accounting Firms
Paris is Burning & Pricing in the Age of AI
Happy Frye-Day.
A quick note before we dig in
I was supposed to be on a plane to Paris right now, on my way to Bordeaux for a week of wine. As many of you know, severe wildfires are tearing across the region, and the trip is off. I went back and forth on it. I could have flown anyway and spent more time in Paris, or found somewhere else to land, but it felt wrong to go enjoy a holiday in a country in the middle of that kind of turmoil, and the last-minute accommodation costs weren't exactly making the case for it either.
So I'm doing the opposite. I'm taking most of next week off to enjoy where I already am. Perhaps I'll make my way up to Park City or Sundance, maybe one of Utah's national parks.
I've also finally chipped away at some of the tedious life admin I'd been putting off since moving from Canada back to the U.S.
Today's win: only one hour on the phone with Apple support.
Let's talk about pricing
Pricing has always been hard, and AI is turning it into something closer to a Pandora's box. If you know me at all, you know I don't believe in billing by the hour.
Here's the reality: we all trade. Every one of us spends time executing work. But the goal was never to sell the time. It's to make sure the outcomes we deliver are tied directly to our clients' real pains and needs.
With the recent IRS guidance restricting firms from charging hourly rates for work that AI now does in a fraction of the time, I think this is an especially important moment to rethink how you price your services.
What's becoming clear, and a recent report from Karbon backs this up, is that clients actually expect to pay less once they know AI is handling a chunk of the work they used to pay you for. And they're not wrong to see it that way, because they were never really buying your hours. They don't care how many buttons you clicked, or how many spreadsheets you built and tied together, or how pretty they look. They care about outcomes.
We now live in a world where AI lets us deliver more. What Ron Baker calls the "plus" in your offering. You might be used to delivering a financial package. Now you can deliver that same package plus a narrative, plus a trend analysis, in a fraction of the time it used to take. And you can do it for every one of those low-level bookkeeping clients you'd never previously have thought to offer that kind of insight to.
As AI takes on more of the execution and frees up your time, the job becomes asking better questions. What do your clients actually care about? What are their real pain points? What would make them stickier, and give them the kind of insight that helps them run a better business?
Get paid up front
I'm a big fan of getting paid up front. When you collect after the work is done, you're essentially acting as a creditor for your clients. The best way to avoid an accounts-receivable problem is to not have receivables in the first place. Getting paid up front also lets you prioritize the work you've actually been paid for, and it tends to make clients far more responsive.
Think about the dynamic. If a client hasn't paid you and you're chasing them for the documents you need to finish their work, they can happily ignore you, and then decline to pay, because in their mind nothing was done. Flip it around: once they've paid up front, suddenly they're motivated to get you what you need so you can deliver. It's a subtle shift, but I think it's one of the most important ones you can make.
Putting money down is how they prove to themselves that something is worth their time.
I saw this firsthand years ago, back when I taught accounting and tax classes at photography studios in Seattle. When the Saturday-morning class was free, I'd get 40 or 50 registrations and then teach a three-hour session to the three people who actually showed up. Talk about deflating. When I finally started charging (eventually up to $75 for a three-hour session), everything changed. Sell 30 seats and people showed up, paid attention, and participated.
Where to start
If your practice isn't already doing this, here's where I'd begin:
• Set up a subscription billing model.
• Get paid up front for any work you do.
• Figure out how you can add value to the relationship well beyond what you have in the past.
Do this, and you'll set yourself apart. And make your clients a whole lot stickier moving forward.
From the feed
#tbt to last week... What do you do when an enemy comes to visit?
You welcome them with open arms.
Ok, Jessica Smith, EA, NTPI Fellow, not a CPA is NOT an enemy, despite being America's TaxDome Sweetheart.
She's a friend. And she came to visit me at the Canopy office.
We had lunch, and it was great to make an internet connection a real-live one.
At the end of the day, I think we're all trying to make accounting better for everyone.
Practice management solutions are still one of the best ways to do this imo.
By the way, let's stay connected.
Follow me on LinkedIn.
✦ New section: How I AI
A new section featuring the wins and losses of putting AI to work in my day-to-day.
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Win 1: Calendar Coordination I juggle three separate Google Calendars to make sure I actually show up to everything I've committed to. I had an email with someone who was arranging a group of 10 people on one calendar. I had to give availability based on one of the participants' numerous options. Rather than go through each one painstakingly, I dumped it all into Gemini and asked for it to write an email suggesting a few times that overlapped. I would have spent 10 minutes doing this before. This took 60 seconds. |
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Win 2: Calendar Automation Calendars again. I had a HubSpot event that included an internal team member who needed an updated invite link, and there's no way to automatically let guests edit events booked through HubSpot. So I had Claude (Cowork) run every morning to check for newly booked events and update the settings. Simple, but so nice. |
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Win 3: Coaching Booklet I had Claude draft a structured booklet for my coaching clients. A riff on a 13-week cash flow forecast paired with action items from our calls. It took a few iterations, but I'm happy with where it landed. I'll share it next week. |
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Loss: Page Splitting I tried to get Gemini to split paragraphs into even halves across two pages so I could print them and cut them down the middle. It would have taken me five seconds to do myself, but I wanted to see if Gemini could pull it off. Beyond frustrating. |
Luke
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