In this episode of the Modern CPA Success Show, hosts Tom and Adam discuss the pivotal role of service packages for accounting firms, especially those offering Client Accounting Services (CAS) and CFO services. They explain how structured service packages enhance clarity in service offerings, streamline pricing, and improve client onboarding and communication. The episode covers the benefits of a "small, medium, large" package model, the importance of aligning packages with client needs, and strategies for transitioning existing clients. They also touch on overcoming barriers to implementation and the advantages of pricing transparency.
Intro 00:00:00 Welcome to the Modern CPA Success Show, the podcast dedicated to helping accounting firms stay ahead of the curve. Our mission is to provide you with the latest and greatest insights on cutting edge tools, innovative marketing strategies, virtual CFO services, and alternative billing methods. Join us as we change the way people think about accounting.
Tom 00:00:22 All right. On this episode, Modern CPA Success Show, Adam and I are going to talk about service packages, something if you take our course or something, if you hear us talk about, we talk about these service packages. So, I'm going to just jump right in. Adam why would someone offering CAS services CFO services have service packages, I suppose, as opposed to every single one that comes to me as a unicorn, I'm going to treat them differently. For that reason. You don't want everything to be a unicorn. So, people are always like.
Adam 00:00:50 There's always need clarity around what am I going to deliver? How am I going to deliver it? It all comes back to your service packages.
Adam 00:00:57 It has to start If you want to understand your pricing, I need to know what your service packages are. If you want to understand how you're going to onboard a client, I need to know what your service package is if you want to deliver. It goes back to your service package, and if you want to actually be able to sell a client on what you do and how you do it, the service package is almost like what the website used to be, right? Like websites were just kind of like the legitimate user. If you don't have a website, you're not a real company. Well, you don't have a service package. Do you do this kind of work? You know, you want to give the presentation like this, this is what I do all day long. You know, they can still be customized. So don't make it feel like it's like this box that everybody's trapped into. But it goes back to popcorn, you know, methodology, small, medium, large. You want to generally have like, three options.
Tom 00:01:51 Yeah. And as I think of so you mentioned marketing. When you think of marketing this small medium and large aligning the small. What kind of client does that align to that you're trying to attract to that? Right. Because it's not everybody. And if you're trying to think of a niche, this small package might be the smaller company. Think of a our small package of transactional less on the advising, the forecasting, the forward looking things for a very small organization with a one person owner that may be okay. Maybe they don't need a really broad kind of thing, but matching that up, if you go with a very large company, they're really diverse business and say all you we think you need is a small package. They just don't fit. So, trying to sort of put yourself out there saying, hey, here's what we do. I think for the prospect, looking at it, them also saying, oh, now I understand what this looks like versus let me just show you maybe a list of 30 things or say, do you need some kind of service? Give us a call and then we'll describe for you.
Tom 00:02:45 Just doesn't work very well.
Adam 00:02:46 Well, and also, I think that, you know, going back to small, medium and large like some people might go, well, but I just want to deliver this one thing. And it's like for us, our small medium and large is based on the access, again, not services. Services are all ala carte. They can all be customized bill pay, payroll. Things that I'm going to do for you. Access though is you only need to talk to me monthly small. You need to talk to me. Guaranteed time twice a month for us to hit these certain topics and then guarantee it's unlimited the whole way. Right. But then the last one is like, we need to talk weekly, so think small, medium and large. Now you could say annual, quarterly, monthly. You know it doesn't really matter. but the but you don't want to do is like go in and just have a option slam it on them because they're going to be like, I don't think I quite fit by even just showing them how they can go down or up in a scale gives them comfort and where they're at, you know, so you want to make sure that you're thinking about it and presenting a little bit of an option even, and then you're guiding them to the right service package.
Tom 00:03:56 Yeah, and maybe it was obvious to people who are listening. And your answer. But I'll just say it, that access and the time to me is so important from a cost standpoint. If you say, why can't I offer the biggest package to every single person? It's too expensive and it's the amount of time we spend. So, the access, the number of meetings that I'm in that I have to pay for or that I have to prepare for. That costs more money. So, when I'm in fewer meetings, it just costs less. So, there's the business side of that. And then getting with the client for what things they need in that. I'm most curious when we deliver this service how much better service packages are when you assign team members, right. They we use the terms, hey, you're picking up this onboarding client and there are controller client. Immediately our team members understand what that looks like. And if you come to me and tell me that and then the client or the prospects start saying, and I want all these things in different package, I know them well enough to be able to say, okay, I can do that.
Tom 00:04:48 Let's talk pricing for those kinds of things. But I don't get to some of those scope creep things did. I suppose if you price it and it was all unicorn, I'm in the back of my mind. I could say, well, maybe Adam did promise I would do A, B and C, and so then suddenly I'm doing things I shouldn't. And the packages help us understand that part 100%.
Adam 00:05:04 Like I said, if you want to understand your pricing, put together packages first. Once you have your packages, then you can make your differentiation on pricing. And then whenever it comes to those things, like you said on the delivery side, time for you with our clients, you'll understand because they're in this package. What they're asking for is likely out of bounds and has been explicitly said that in the so W because we have an s o w already prefilled out with everything, they get the entire service. But it says not included, not included, not included. Right. We're only putting the things that are included.
Adam 00:05:40 So, because they're in that package, I can now educate the team to say in the client because in onboarding we revisit that package, right? So, we do. So, we say, yes, this is the package you chose. This is the customizations. And then whenever we get into the onboarding process, we revisit that and just say, hey, just so we're clear, your responsibility, we're responsible for this. And then we talk through communication and stuff. And now everybody set. So, whenever they want that thing that's out of bounds, they're like, hey, I think I need to move up a package. You know what I mean? Like you don't have to have as. Yeah. And then because we have the pricing tool so dialed in to that package and what those are you Tom not a salesperson can just pull it back up and go, oh, if I add that here you go.
Tom 00:06:23 Yep, yep. and to your point with the statement of work, it's only been a few times, but I've had to pull it up with clients before where they're arguing, they think something's included.
Tom 00:06:32 And so you're saying see where it says not included. I can add that for you. But we said in our agreement that we weren't doing these things for usually it doesn't get to that, but it can be useful.
Adam 00:06:40 Yeah. Especially now we've kind of refined our onboarding process to make sure that that is a restated thing. You know, sometimes it's years later or something or a new person is in and they're asking for these million things and you're just like, yeah, that the owner chose this package, not that package. We can talk about it, we can do it. But this is how much extra would be.
Tom 00:07:01 Yeah.
Ads 00:07:02 Elevate your firm with a virtual CFO playbook. How to land $60,000 per year clients and provide a killer client experience. This comprehensive online series of modules provides you with the essential tools to create and deliver scalable CFO services developed from summit's successful approach, which propelled them from $500,000 to over $10 million in revenue in ten years. This playbook will equip you with the skills to take your firm to the next level.
Ads 00:07:30 Additionally, upon completion, you can receive 24 hours of CPE credit for the course. Ready to grow your firm? Enroll now at CFO Playbook Summit CPA Dot net.
Tom 00:07:44 So, since we're both CPAs, we're completely qualified to analyze people's psychology. So why don't people? Because I can tell you, it's probably 95% of the time when people start, even as they go through our class and we say, do your packages, people say, I don't have them yet. Why do you think as people launch into this, they don't build the packages?
Adam 00:08:05 I feel like you're already prepared to answer this. So, I'm in a no win situation here, but.
Tom 00:08:11 I and I can offer my opinion. No. That's okay.
Adam 00:08:13 No, that's fine. I mean, I just think that it's a, you know, again, this is it's no different than starting a paper whenever you go to write it. This is the foundational first step. And I think that everybody gets writer's block on this part. And I am telling you sincerely, like, if you can figure this part out and you do it, everything else just kind of like all of a sudden now the ideas are flowing and you're just like going boom, boom, boom, boom, boom.
Adam 00:08:39 Everything else kind of falls into place. So, I think it's just the hardest thing to get started.
Tom 00:08:46 I think you're right. Yeah, I think you stole the main thing I was going to comment on, which I love, but I would say, I think and if someone would sit down for an hour, my guess is they could have a third and a half of it completely done. Just come up with what you think the differentiators would be. And I think if you did that over a few week time period of like, okay, then ruminate on, oh, what was I thinking about this? How could I make the middle package still sound valuable but not spend as much time? And I thought of things like, I mean, cost drivers, one of the important ones. I already talked about time. So, as you look at the packages, one of the ways to evaluate is the smallest one that people are going to pay the least for. Is that the cheapest for me to deliver? That's something you need to consider.
Tom 00:09:26 And then there's sort of the opposite side. When you take the total client perspective, which is the one that you think clients are going to say, yes, I need that. When I go from the small popcorn up to the medium, that sounds valuable to me. There's something in there that I would like to have that you're saying, and that's where you get to put on your marketing hat and things like that. Yeah.
Adam 00:09:43 No, I agree, I think you can intentionally devalue step one. You know what I mean? Like because it should be devalued, because it's going to be less, you're offering it as a hey, if you just are super cheap, you could do this. But here's where the value is, you know, no different from jumping. Might as well jump to a large popcorn instead of a medium because it's $0.50 more and I get a lot more popcorn, even though I'm not going to eat it anyway, you know what I mean? Like, it's one of those things.
Adam 00:10:08 But I think that, you know, whenever it comes to service packages, the other thing to kind of consider, I mean, that's a pretty bold statement. An hour and a half, Tom. That's pretty good. but I would say where you would want to start is thinking like the client, what does the client want from you and just make, you know, just like back in elementary school, whenever you started to write, what did they always tell you to do? The first thing to do is brainstorm, right? Just write a bunch of stuff down and then come back to it, and then try to organize it so much the same way, write down everything that the client asks you to do, and then you can come back and you can pair things up and be like, oh, that's actually the same thing as this. And you know, like think about how to like to make it a compound sentence, you know, basically like adding those two things together, find those like kind of things.
Adam 00:10:56 And then you can kind of organize them and put them in place. But I think starting with what the client is always asking from you is, is really important.
Tom 00:11:05 I think so too. Part of that initial hour and a half might be looking at other firms packages and get an idea of what those look like. We have ours on our website. I would say that someone probably doesn't want to steal them directly from us, because those might be the things you're not good at doing and don't want to do, but it can certainly give you an idea of those kind of things. I just suggested this to a client an hour ago who's in onboarding, and what one of my observations going through onboarding is. You have 11 clients, and you only make money on four of them by your own numbers. You're losing money on all your small clients. You need to have these service packages. And one of the pushbacks was I might lose clients, and they might. But what I said is, it doesn't mean you can't define a package and offer that to your prospects.
Tom 00:11:48 It doesn't mean day one, you turn to all your clients and say, I'm going to what looks like cut all your service in half. You could transition them to that or leave them alone if you want to in your outward facing new clients. Could be this is what I'm adopting for new people going forward, and then I'll deal with the old clients maybe a year after that to do that. What do you think of that approach if I'm going to suddenly put those in? But I'm already offering some services.
Adam 00:12:11 You still service a couple of our very first CFO clients that we did for nothing, and they still don't pay hardly anything. And it's fine. I mean, don't get me wrong, the works, like we have good relationships, so it's easy. But at the same time, I'm a big fan of go forward. You know, look at everything prospectively. And then if and when it comes time to, you know, cut the bottom 10% or whatever you're trying to do, then you can kind of go back and look at that stuff.
Adam 00:12:41 But I don't like. You know, I don't like messing with other stuff. First, it's like, let's test it out. Kind of going forward, understand that some people are going to just paint outside the lines for a little while, and maybe that's okay. Maybe there's reasons why. Maybe you've gained enough efficiency through the relationship that, you know, you would take a bath on a new customer, but because they've been a customer for five years, it's like, yeah, you know what I mean? Like, I can get through this with some minor adjustments and then take into consideration. It also gives you kind of like a bogey for like whenever you're doing price increases and stuff, like maybe you're not all trying to get it all at once, but you can chunk away at it towards a target at that point so that you kind of know I need to get them into this. And it could be an opportunity that if they're not taking advantage of the large or the medium, or they're in the medium, but they're paying the low, like maybe there's an opportunity there to represent the packages and make sure they understand what could be happening in the large.
Adam 00:13:36 And I have had those situations where I've fundamentally underpriced somebody, and then by raising them into a different package, I've been able to kind of make up not all, but most of the ground between the two.
Tom 00:13:51 Yeah.
Tom 00:13:52 As we as most people know, if they listen to us also, we give pricing on that very first prospect call. It's up on the screen. We show it to them. If you didn't have a package, I think that it would be very difficult to put that together. And so, it is pretty easy to say, look, here's our small, medium and large, I've listened to you, let's get these things. And then you get that initial reaction from the prospect where maybe they have sticker shock, and then you're talking about why it's this, or maybe we can go down a package if you do. I can't imagine trying to say, hey, there's this option of 43 different things, and let's just turn on and off things at random to it still feels like what it would look like without.
Adam 00:14:27 I actually just saw an engagement letter like that. It was this wildly obnoxious, like, probably like five-page Excel document with just like, checkboxes everywhere. And I was just like, Like, you know what I mean? Like, at least like with the checkbox, I could see what they selected, but I was just like, holy, overwhelming and not really like, you know what I mean? Like every single engagement, you have to kind of re understand your purpose. And again, if your service based and your only you're not selling consulting, you're just selling services.
Tom 00:15:02 Like.
Adam 00:15:02 I'll pay. Yep. payroll.
Tom 00:15:06 Bankrupts.
Adam 00:15:07 Yep. You could probably get away with that. You know what I mean. Just but if you're starting to do more advisory, more accounting, you know, oversight, you know, whether it's revenue recognition, cash flow, deeper month in, closed stuff.
Tom 00:15:21 Like.
Adam 00:15:22 It's you probably should just like figure out a way to bundle that stuff a little bit better.
Tom 00:15:29 Yeah.
Tom 00:15:30 Yeah. Right. I know we're beating this up, but I will really encourage people to if they want to check out our site to see it. The other thing that we do that I think is important is we put what our price, our typical pricing is on there that lets people are prospects coming in. At least they're aware of what kind of things we offer. That's that. And so, I think I've heard you say kind of the tire kickers, they don't need to they don't need to be embarrassed by coming in and saying, oh, I really thought this would cost a lot less and we don't need to spend our time doing that. So, it gives a chance, say, here's what you're going to get for an average. Now talk to us about your specifics.
Adam 00:16:00 We can put qualifiers on there like on average what size team this makes sense for and revenue size. You know the other thing I saw I was actually at a CPA the other day and I thought it was pretty helpful.
Adam 00:16:13 of course everybody talks about AI, and we use chat like crazy, you know, and I think you were talking about using it for, that client the other day. Yeah. And so, but he actually went through how to build out your service packages using chat and just prompts and just re prompting it and reprocessing it. So again, if you get to that brainstorm idea and you just want to crank it all out and say chat. Help me actually formalizing group these things. Like you can reiterate, you know, you can do all these like iteration and iterations on chat. And that might help you get to where you want to be to.
Tom 00:16:46 Yeah, yeah.
Tom 00:16:47 And the iterating may that maybe that is another barrier because as you know, we're doing some modifications to our packages right now. And so, we've had something that's worked for a long time, but there's nothing that says that has to be it forever for us. And then we'll deal with our existing clients and new clients also 100%. Well, good.
Tom 00:17:04 Hopefully people don't feel like we beat them over the head with service packages. Although if they're if they're still against it, give me a call because I do want to beat your head and say, you gotta take a shot. But I hope that we've described kind of why in the how of doing these.
Adam 00:17:17 Yeah. Thanks, Tom.
Tom 00:17:19 Yep. Thanks, Adam.
Outro 00:17:20 Enjoy this podcast. Visit our website summit CPA Dot net to get more tips and strategy for achieving modern CPA firm success. We are here to be a resource in this ever-changing industry.