What I learned about Billing

In the course of running my unplanned not for profit, I realized that I had a problem billing for my work.  I also began to notice that the very clients who received the biggest discount were the ones who expected the most.  Since I had undervalued the services I delivered, they felt no qualms about taking advantage. 


The interesting thing is that I was working on their accounting systems.  I had access to their financial statements and was frequently involved in posting transactions to their system.  None of them were in a troubled financial situation and in fact, most of them never had any issue with my bill. I never considered the facts in determining how to bill them, but had instead relied on a fictional scenario of my own invention.  In my mind, I felt they couldn’t afford my full rates.  What’s worse, since I was billing by the hour, I felt they shouldn’t have to pay for the full number of hours it took for me to complete a job.  So I ended up billing discounted rates for fewer than actual hours.  I had built the perfect equation for starvation. 

How I resolved my Dilemma

During the course of consulting for clients, I came across an accounting firm that serviced a mutual client.  We began to work jointly on a number of clients and I really respected their expertise and approach.  Since I was also a CPA, I approached them about bringing my client base into the firm and joining their practice.  I also had a tax background so the combination of computer and tax expertise was appealing to them. 

We worked out the arrangements, and I joined the team as a salaried employee.  The responsibility for billing and collecting was lifted from my shoulders.  I was so relieved!

So here’s what happened immediately:

1. They raised my rates. Significantly.  I did not lose a single client as a result. 
 
2. I stopped understating hours.  Because now that my hours were not my own, they had value.  I was being paid a salary.  It would have been unethical to give away my hours when someone else was paying me for them. 
 
Notice how my own perception changed.  It is amazing what happens when someone else sets the value of the services you deliver.  


Books I wish I head read back then : 
 
Let’s Get Real or Let’s Not Play, Mahan Khalsa


 

I am currently in the process of launching my own business for the second time.  

What Not to Do

The last time I tried to go out on my own, it was not a conscious decision.  At the time, it was the best way for me to make a living in a new town.  I felt desperate about finding work.  I had a feeder network that thankfully kept the marketing going, but I still believed I had to take on any job that came my way. (This is a very common entrepreneurial problem  visit this site for more on this topic http://www.e-myth.com/) .

In addition to being a CPA, my real niche was small business accounting software implementation and support.  This was in the early days of PC automation and I was in Atlanta, so there was more Peachtree Software business than I could handle.  I was very successful in finding and generating business, but when it came time to bill for my work, I was a disaster.  

Turns out I was suffering from this all-too-common ailment, that of being a “Solutionist Professional”, which is beautifully described by my friend, Ed Kless, in this posting on www.versage.com .  I really wanted to help every client I came across. I knew I had valuable tools that would help them get better - whether they could afford me or not. Therein lies the problem.  

I ended up running one of the most successful not for profit businesses in Atlanta.

During my early days as an implementer of  Peachtree Accounting Software (for DOS), I had the pleasure of working with small businesses all over the Atlanta area.  One of these wonderful clients is the source of this memorable saying - “ Well, I’ll be dipped in daaaawg doo-doo!”  That statement is the best reward I have ever received for solving a pesky printer problem. It also makes a wonderful wall hanging in my California home.  

But on to the point. I also had a cold storage client who had a small business office on premise.  The office was accessible only by walking through the middle of the storage area.  It always had the scent of something that hadn’t been kept cold enough.  As a result, I am absolutely positive that I know what rotted chitlins smell like.  In the midst of this lovely aroma sat the most wonderful classically trained bookkeeper. She had been handed the box of software and was told to figure it out. I am pretty sure she was around during the invention of the pencil so she wasn’t planning on putting that device out to pasture any time soon.  She was wonderful at executing tasks as I described them and was meticulous about accounting for every single transaction properly.  She printed out reams of paper and recorded every keystroke for posterity. (I’m pretty sure she is solely responsible for Global Warming.) 

On one occasion I was called to come onsite as the system “wasn’t working properly".  She told me it was messing up and skipping transactions.  I asked for more information and she opened up a drawer containing beautifully hand written records that mirrored every single transaction in the automated system.  Turns out she didn’t trust the computer so she was also recording every transaction on individual green ledger cards.  

Most of us can hardly find employees to do a job right once.  Here was an employee who took such pride in her job that she did it beautifully twice. Well, I’ll be dipped…