Accountants: Should You Implement Value-Based Pricing?

A value based pricing strategy for your real estate accounting firm will help both you and your clients achieve your financial goals.

As an experienced CPA, you may already have a set pricing strategy that you have been using for a while. If you’re billing by the hour, however, it might be time to shake things up a bit.

Enter value-based pricing, also known as value optimized pricing. The idea is that prices are primarily set according to the perceived or estimated value of a product or service to the customer, instead of according to the cost of the product or historical prices.

What is value-based pricing?

As mentioned, value-based pricing sets the price of a product (or in this case, your services as a CPA) based on what you think a customer will be willing to pay for it. Work is perceived as valuable based on the effectiveness of the output rather than the time spent doing it. Of course, the time required for each job can vary greatly depending on your client.

The value-based pricing structure tends to be used by companies or people offering unique services or products, rather than mass-produced ones. Given the bespoke nature of real estate accounting, it’s a good idea to use this strategy as you are offering a unique range of services that will vary depending on your client’s needs.


Instead of charging 10 hours at $100 an hour to sort out a client’s tax return, you say you will help them improve cash flow and save them money at tax time for a flat fee of $1000.

Value-based pricing is different from competitor-based pricing, where a service’s price is based on what competing companies charge. Although these are two different strategies, it still helps to be aware of what your competitors are charging for similar services as this can inform the perceived worth of services by your clients. If they see a competitor charging less for a similar service, they may be more tempted to enlist their help over yours.

Other pricing strategies

Needless to say, value-based pricing is not the only pricing strategy used to sell a product or service. Some other strategies that you may have heard of or even used before include:

Hourly-based pricing

This is a common pricing model to sell a service that is easy for the client to understand. However, the downsides are that as the pricing isn’t based on value, clients may try to haggle. Some clients may also be skeptical that you are purposely taking your time with the job so you can charge more.

Competitive pricing

The price of your services is set based on what your competitors are charging. This can work in the right market and gives you a good idea of what to charge when you start out but often doesn’t leave much room for growth (as you are in a way restricted by what your competitors are doing).

Penetration pricing

This strategy is often used by new companies as they offer their products or services at a lower price than the competition to get people in the door. This may lead to a perception of your product or service being of low value. Clients who are only looking to save money may jump ship once you eventually raise your prices.

Pros of using value-based pricing

For various reasons, the alternative pricing strategies above may restrict or hinder your growth. On the other hand, value-based pricing comes with a lot of advantages that can help both you and your client:

  • Clients will likely gain a better understanding of the value of your services
  • You’re not tied to hourly constraints
  • Allows you to add additional value for your client
  • Improves your client’s profitability and helps them achieve their financial goals
  • Paying closer attention to what your clients perceive to be valuable work will help you tailor and refine your services based on their needs. This will increase loyalty and create a long-lasting relationship between CPA and client.

Downsides of using value-based pricing

  • If hourly fees are the norm, some clients may understand and trust this strategy better
  • Requires a lot more work to determine rates as it’s not as simple as charging $X an hour
  • You need to be clearer and more convincing about the value of your service vs what your competitors are offering (if they are charging less)
  • It may take you time to figure out the best strategy if you’re used to billing by the hour

How to implement value-based pricing

To successfully implement value-based pricing, you need to identify your niche and clearly outline the benefits you are offering to your clients. Based on the benefits you are offering and using the context of your competitors and the market around you, you can then determine the value of each service.

Once you have assigned a reasonable rate to each of your services, you can even then begin thinking about how you can add more value for your clients. As a caveat, even if you aren’t planning on introducing a value-based pricing structure, it’s still a good idea to add more value for your clients where you can to improve customer retention.

Add value with Landlord Studio

The great thing is that adding value doesn’t always mean spending extra hours working on the same task you have already been doing. This can lead to less productivity and resentment from your clients who may think you are taking advantage of your hourly rate.

In order to add value, you might try bundling your services or introducing new service levels.

Another way to add extra value is to utilize purpose-built property management and accounting software. Landlord Studio, for example, allows you to add value to your services through bespoke financial reporting, and streamlined income and expense tracking. The software can help you deliver extra value without it being a drain on your time or resources.

For your clients it provides an easy to use income and expense tracking tools paired with essential property management features all of which are specifically designed to save them time and improve the accuracy of their bookkeeping.

For accountants, this solution means your clients are able to keep better organized accounts, digitize receipts, and using the accountant view of Xero integration you can have access to our range of advanced financial reports allowing you to easily review their accounts throughout the year and streamline tax time. This financial oversight also provides you with the data you need in order to find areas in your client’s business where you can add the most value.

Learn more about how you can add value with the Landlord Studio accountant partner program →

Final words

The wrong pricing strategy could result in you unwittingly targeting the wrong clients and may not accurately portray the value of your services. This could lead to an inability to scale your business and reach your own financial goals.

This is where value-based pricing stands out as the emphasis is on results, rather than input. When implemented correctly, it can ultimately help you to help your clients save money, improve their profitability and achieve their financial goals.

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