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ARTICLE · 07 AUGUST 2023

Pricing methods to ensure long-term business profitability

The method used to charge for products or services is critical to how much income is generated and profit created.

AustraliaAccounting and Audit

How your clients charge determines how much they make!

The method your clients use to charge for their products or services is critical to how much income they generate and the extent of profit margin that's created.

What we are seeing:

  • fixed fees that don't cover the service delivery costs
  • adopting competitor pricing that doesn't reflect the real price
  • hourly rates don't work when you don't record the time spent on the client/customer
  • fixed-price long-term contracts becoming unviable with inflation wiping out the profits
  • cutting pricing to gain market share and making losses
  • not counting Big Tech's slice of the pie when setting prices
  • reluctance to change prices causing declining profits.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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