Why Old Pricing Models Are Unethical | CPA Trendlines

I personally feel that pricing by the hour in arrears is an unethical way to price. Here’s why:

When you price by the hour you are not incentivized to be as efficient as possible and get the job done super-fast. In fact, you are directly incentivized to do the task slower. You are incentivized to overanalyze and take your time. You are incentivized to pad out timesheets and in some cases make mistakes.

And it gets worse when management (aka partners) actively promotes and measures productivity, utilization and billable hours targets. I’ll give you 6.5 hours a day charged to the client says the eager accountant who wants to impress. I’ll go a little slower and I’ll do things in the job that I didn’t need to do. I’ll even leave the clock running as I go to the bathroom. I’ll start the clock as I am driving to the clients’ office. I’ll keep it running as we have lunch together. And seeing we charge in 6-minute units then if a task takes 45 minutes I’ll just round it up and charge 8 units. With all that (the eager accountant says) I got my daily target.

Is there anything more unethical than that? At this point in time you may think of sending me some hate mail. That’s OK; you’re entitled to your opinion.

Seriously, though. Pricing by the hour for professional services has got issues written all over it.

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Why Old Pricing Models Are Unethical – CPA Trendlines.