Your guide to updating vendor software prices with Practice Ignition

March 4th, 2020 by Pat Kuo 6 minutes read

As an accountant, you manage a lot of apps on behalf of your clients. Changes to cloud accounting subscriptions can mean you need an easy way to update your service prices across your client base.

But before you do so, you’ll need an effective plan to manage this change and consider what and how you’ll communicate to ensure that your messaging holds integrity.

Let’s dive into a few different aspects of the plan below.

A framework for approaching pricing changes

Consider who + what is affected

  • Which clients are affected?
  • Does this impact your costs, or just your clients?
  • How are these costs currently being paid?

Consider your options and steps to take

  • Absorb the difference
  • Price in charges (packages)
  • Pass on the cost

Consider how the new fees will be presented

  • Included in package
  • Priced separately
  • Separate engagements

Planning for price changes

1. Who or what is affected?

    We’ll need to first define who or what is affected. Is it a group of clients? Is it a particular service you provide?

    If you have all of your clients on a formal engagement detailing their specific package and scope of deliverables, you can easily identify who or what will be impacted.

    If you’re using Practice Ignition, for example, you can use a proposal filter for the vendors service to identify the clients affected by the price increase very easily.

    2. What are my options?

      When a vendor increases their prices, there are a few paths that you can take.

      Vendorincrease blogimage biggercontent

      If it’s a small or one-off increase, you can either absorb the difference or spread it across multiple clients. Then, increase profitability elsewhere in your business to accommodate.

      Alternatively, you can build the increased cost into your service prices. You can include the vendors’ prices into your package and add a larger profit margin to give you a cushion in case a vendor increase happens again in the future.

      Lastly, if the change is too large in terms of price or it forces you to change your terms and legalities, you might have to pass on the difference to your clients with a new shift in scope to their contract.

      This might sound a little daunting but if your contracts and engagements are all digital (e.g. on Practice Ignition), it’s easy to make these price changes to your engagements!

      How do I change my prices in bulk within Practice Ignition?

      Step 1 - Communication

      Communication is key! Make sure you communicate with your clients about the change.

      Some good things to note are:

      • The nature of the change and sources of information (link to press releases or blog articles from the company are great)
      • What specific actions (if any) do you need them to take? (e.g. Signoff, a reply or simply no action?)

      Here’s a quick email template below to help form the basis:

      Dear CLIENT,

      We are writing to let you know of a change to the pricing of our third party {vendor} subscription which we are currently managing for you.

      Monthly prices have gone up approximately XX% which is in line with the increased research and development investments made by {vendor} to provide an even better product/service to customers {insert other relevant factors - e.g., heightened regulatory requirements etc.} - please read more about this on {vendor’s} website. {link to release on price increase if available}

      What do we require from you?

      We will be amending the current agreement in place for this financial year/period to reflect this change - which will be effective {XX date}.

      {if not requiring anything from them} We will not require you to re-sign this agreement, but please do let us know if you have any queries.

      {if requiring signature} We will be re-sending your agreement with this new pricing in the next few days, please review and sign as soon as possible, and let us know if you have any queries.

      Kind Regards,

      Your Name

      Step 2 - Amend your proposals

      If you are using Practice Ignition, you can simply adjust a proposal if you are updating a singular proposal or a small number of proposals.

      Otherwise if you have multiple active proposals, you can take advantage of our new bulk price change request for recurring services!

      For more information on the new bulk price change request, read the details and instructions here.

        Simply put, here are the steps:

        1. Submit a bulk-price change email with all the required details to our support team
        2. You will receive a reply with a CSV file confirming your request. You can make final changes and exclusions if you'd like. Remember to save a copy of the file.
        3. If you want to make further changes or exclusions, attach the final CSV file to your reply confirming these changes. Otherwise, please reply confirming these changes.

        It’s as easy as that! Once finished, please allow between 3-5 business days for this to take effect.

        If you’re using another proposal software, ensure that you are amending or re-creating a new contract with the new prices. Also, make sure you send it to your clients to accept.

        Step 3 - Update invoicing and payment authorizations

        This is a crucial step that needs to be done immediately following step 2! You’ll need to update all of your recurring invoices and payment authorisations so that you’re not out of pocket.

        If you’re using Practice Ignition, this happens automatically if you’re using our bulk price-change service. The new prices will be updated on the next recurring billing day - no need to manually edit invoices in your ledger or log-in to update your payment gateway!

        Some additional tips for future proposals

        • Use subscription or service names and list the inclusions - being more specific on inclusions in vendor services will help you if clients upgrade account tiers too.
        • Use Service Terms for vendor services to specify that pricing is based on current vendor prices and how you will inform them of these changes. See below for an example to include for subscription prices. Find out more about service terms here.

        Example Service Term for a Subscription Service

        • Subscription pricing is accurate at the date of issue of this contract and may be changed by the vendor during the term of the contract.
        • If a change occurs in vendor pricing, we will inform you in writing (email) of this before the next billing period affected by the change and will/will not require a formal scope change (new letter) to be signed by you. Changes will take effect in the next billing period unless specified otherwise.

        Need help getting started?

        If you're a current customer, visit our help article here or email us at [email protected].

        If you're not using Practice Ignition yet, and want to see it in action, you can see how it works here.

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