3 Mediocre Ways & 1 Good Way for Accountants to Make More Money
We know that the average pay for an accountant is $70k a year.
We think that’s too low.
That’s too low for someone that serves such a vital function to the operation of the business.
However, the reason we feel (albeit this is pure speculation) that the pay is so low is because most businesses don’t value accountants.
They don’t value accountants the way they value salespeople, marketing people, and the leadership team.
They don’t value accountants because they think what accountants do are ‘necessary evils’ — ‘must haves’. They must have an accountant to ‘take care of the books’, to ‘file taxes’, to ‘run payroll’.
As with anything that’s a necessary evil, most people are not going to overpay on that position.
It’s why you don’t want to overpay at the gas pump. It’s why commodity items at the grocery store (e.g. eggs) all have pretty much the same price.
So, if a business doesn’t value accountants, they’re not going to pay top dollar for an accountant.
It’s no wonder the average pay for accountants is $70k. We’d venture to guess that the average pay for a bookkeeper is much less.
So, how can you make more money? Well, there are three ways.
Way #1: Get more clients
Way #2: Charge them more
Way #3: Work more hours
However, there’s three fundamental problems with each of these three ways.
The problem with getting more clients is that most accountant functions are not scalable. Meaning, the more work there is to be done, the more resources (e.g. labor) must be applied.
The problem with charging them more is that, as we’ve discussed, your clients don’t want to pay more than they have to — especially for a service that’s seen as a commodity (in most clients’ mind, every accountant would deliver the same end result).
The problem with working more hours, is that…you’d have to work more hours. Life’s too short for that. Plus, most accountants are already working 50 hour work-weeks. How can they work more?
What’s the solution?
Well, there’s a Way #4. A better way to make more money.
And, that’s to sell something that’s scalable, not a commodity and doesn’t require working more hours.
Let’s break that down.
Selling something that’s scalable means that you can sell more without adding a lot more resources (e.g. labor hours).
Selling something that’s not a commodity means that you’re selling something that most of your contemporaries are not offering.
Selling something that doesn’t require working more hours means that you can make just as much money (if not more money) while working less hours.
You can do all three of these things by offering an outsourced CFO/business advisory service.
An outsourced CFO service is…
Something that’s scalable. In fact, for most businesses (those producing $500k to $2.5mm in annual revenue) you should be spending about 4 hours per month per client.
Something that’s not a commodity. Your client will be glad to pay you top dollar if you’re doing the one thing they care about: having a successful business.
Something that doesn’t require you to work more hours. In fact, your effective hourly rate should go from about $27 per hour to $375 per hour. Meaning you can work 93% LESS TIME and still make the same amount of money.
This is how you make good money in this profession.
Simply sell something that’s scalable, not a commodity and doesn’t require working more hours.
This post is written by Adam Lean, co-founder of TheCFOProject.org. Have any feedback or suggestions? Send an email to adam@thecfoproject.com.
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