How to price your cash flow service

Pricing your cash flow service

Deciding how to build a cash flow forecasting service into your existing offering can seem daunting. Finding a price point and format that works for both you and your clients involves striking a delicate balance. 

We find that a cash flow service works best when it’s set at a consistent price each month, so clients know what to expect.

How you price your cash flow service is a function of the time spent by you and by your client. 

In building your new service, you’ll need to take the following variables into consideration.

Things to consider in pricing your cash flow service:

How do you currently charge your clients for your services?

Do you charge:

1. Hourly
2. Fixed fee with optional extras
3. Fixed fee all inclusive packages

What is your hourly rate, or if you use a fixed-fee model, what does that roughly equate to for each client? This will factor into how you bill for your cash flow service. 

How much time is required to get the client’s Xero/QBO account up-to-date?

Getting a client’s accounting software in good shape is crucial before connecting to Float. The account needs to have all transactions reconciled/matched,  So think about:

1. How many transactions aren’t reconciled?
2. How much time does it take to get all of the source documents?

How much time is required to get Float set up?

1. How complex is their chart of accounts?
2. How big is their list of outstanding payables and receivables?
3. How much information about the business does the client have in their head that you don’t have access to?
4. How detailed does the initial cash flow forecast have to be?
5. Who is required to update the initial cash flow that’s been built once it’s run past the client?

Setup time will vary significantly depending on the client. With a relatively straightforward account, it can take 1-2 hours to set up the forecast. With a longer chart of accounts and more complexity, this can take 5-7 hours per client.

How much time are you going to spend updating Float for the client?

1. Who is responsible for keeping reconciliation/matching up-to-date in the accounting software?
2. Who is responsible for updating the expected dates of invoices/bills in Xero/Float?
3. Who is responsible for updating cash budgets in Float?
4. If the client is going to be responsible for elements of Float, how tech-savvy are they? (e.g. how long will it take them to be comfortable keeping the platform up to date?)

How much time will you spend with the client looking at Float?

1. Will you have an initial meeting? 
2. Will you meet monthly, quarterly, or at a different cadence to run through Float with the client?

The initial meeting and ongoing meetings will likely take one hour each.

How are you going to account for the subscription cost?

1. Are you going to include this as part of the cash flow service that you provide?
2. Are you simply going to pass on the subscription cost to the client?
   1. If so, are you looking to make a margin on the subscription cost?

Examples of how our partners are charging:

1. Include Float as part of a higher tier of services

Many of our most successful partners have chosen to pay the discounted cost of Float themselves, and use Float to attract clients to a higher tier of accounting services, perhaps bundled with other apps. Our partners frequently bundle Float with automated data entry software like Receipt Bank, Hubdoc or Autoentry, and debtor management software such as Chaser.

This option will help increase conversion to a higher paid plan, and help increase retention of those clients.

For instance, this is how Ashley Blood Bookkeeping prices their cash flow service:

2. Create a bolt-on cash flow service

Another option is to make a bigger margin by creating a bolt-on cash flow forecasting service. In this case, you could bill for the cost of Float, plus training clients, and ongoing support for managing their forecast. Here, we’d recommend regular reviews of Float be a key part of your interactions with clients.

For instance, if you charge for two hours for full set-up at £100/hr, and then one hourly check-in per month, you could make an additional £1400 per client per year. If you spend more time keeping Float up-to-date, then this could be much higher.

Here’s an example from Pink Pig Accounting showing a few different levels of involvement: 

For more information on how to use, promote and train clients on Float, check out our Accountant & Bookkeeper Resources Hub