As the recession continues to slog along, slumping sales are forcing many accounting practitioners to re-think their pricing strategies. Today's small local accountants have nearly abandoned hourly rates in favor of fixed rate pricing and value pricing.

As self-employed consultants, small and local bookkeeping, accounting and tax preparation practitioners follow the latest trends taking place in industry. Trends in the industry that are often telegraphed in the more competitive local market before making their way into the higher echelons of the Big 4, the mid-tier and the regional firms.

Historically, accountants have priced their services to clients based on some form of an hourly basis. However, as clients became more sophisticated, and the accounting industry became more competitive, more and more practitioners have turned to fixed fee or value pricing models. Today Studies indicate that less than 25 percent of small local practitioners continue to price their services on an hourly basis while over 75 percent of practitioners price their services at fixed or competitive rates.

Of those who do price their services on an hourly basis, the majority of their services were focused on troubled taxpayer casework, reflecting the greater complexity of the work provided and the uniqueness of each individual case.

While demand for taxpayer representation is an in-demand service at all economic levels, the uniqueness and complexity of each individual case injects a degree of uncertainty in the work schedule. This uncertainty all but obviates the ability of the practitioner to develop a standard pricing model. And, because the troubled taxpayers situation is no longer one of staying in compliance, but rather being brought into compliance, taxpayers who desire representation are the one client category that do not argue fees and rates with local practitioners.

Meanwhile, the shift toward fixed fee pricing for standard client writeup services continues as the recession grinds on, with 56 percent of practitioners primarily offering fixed fee arrangements with clients, and an additional 19 percent offering "value pricing" (or market pricing) schemes for almost all recurring services.

Powered by a situation over the past couple of years where companies have had to take unprecedented and drastic actions, shedding large amounts of services to bring their cost structure in line with plummeting sales, and as companies regain their footing, many firms are finding that their needs aren't as inflexible as they once thought they were. For some companies this situation can be a transformational opportunity to either take professional services in-house or to explore virtual services and outsourcing, further adding to the pricing pressures facing the small and local accounting practitioner.

Meanwhile, forward-thinking practitioners are seizing competitive and strategic opportunities to transform their practices in the midst of the recession. These practitioners see specialization and niche markets as key to retaining market share and growth. As the nation exits the recession, these forward-thinking practitioners may be well-positioned to leverage the huge productivity gains that come with specialization as volume returns, outpacing their competitors by lower client churn rates, greater operational flexibility and lower operating costs.

You can continue to learn about Practice Marketing For Busy Accountants by visiting Secrets of Marketing Accounting Services

Kirk Ward is a retired tax expert, accountant and auditor. He provides the same resources he used in building his practices to startup accountants through his Secrets of Marketing Accounting Services website and rants about the commercial finance industry on "Kirk's Blog" (Wonder where he got the idea for the name of that blog?) where he describes his career as an auditor with "Bucket Of Blood" finance companies and banks.