Announcement

Collapse
No announcement yet.

Raise Our Fees

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Raise Our Fees

    I had a client for many years and I charged him $100 since his return was simple except for a
    few stock sales. I treated him as a SPECIAL person. I saw him at a restaurant often and
    would go over and talk to him. I discovered that he went to a CPA for the last two years
    who charged him $350. Why would he do this? Assuming I treated him well, which I
    did, my only conclusion is that clients think LESS of us if we charge LESS. Preparers
    who charge high fees are respected more. Conclusion: I need to RAISE my fees.
    Last edited by dyne; 03-31-2010, 11:00 AM. Reason: changed word.

    #2
    This is what I learned and now my approach

    I low ball my fees to lure new clients and then I start to slowly raise my fees except for those whose tax returns have increased in size then that is an automatic fee increase. I try to stay competitive with local preparers. I am learning that virtually all my clients get comfortable with me and dont really concern themselves with fees plus I have an auto/home insurance agency and I market securities so many of my clients have told me they prefer not go thru the hassle of looking for someone else that offers all these services and products. Sometimes there are other reasons as may be in your case. I have a client who left because his new tax preparer is related to him. Another client left because her kids talked her into it because her kids had a good friend that is a tax preparer. Another left me because I encouraged better organizing. Many times is not about the fees but arrogance, stubbornness, good ole boy network, fellow member of their church and the list goes on. If there is anything I learned over the years, when clients especially those special clients leave, don’t take it personal but that is easier said then done.

    Comment


      #3
      An elderly lady telephoned and wanted me to allow her to come by on a SUNDAY for me to advise her whether she was required to file a tax return. This indicates that she has NO respect for me since I charge NO fee for that service. I need to start charging a fee of $50 for that service, then people like that would NOT bother me year after year! I joked about setting a MINIMUM fee of $200 for those who call asking me to quote a fee. I am beginning to believe such a minimum fee might be a good idea.

      Comment


        #4
        dyne: How's this for a minimum fee?

        C: Do you charge to just answer questions?
        dyne: The answer to the first question is free, then I charge for every question after that..
        C: How much do you charge per question?
        dyne: $100 each. What's your second question?
        "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

        Comment


          #5
          The two factors of billing

          What will the market bear? How valuable do you think your time is? We will always question both, but we have to live with our results. Never feel bad, you cannot control clients.

          Comment


            #6
            I'm thinking of raising my fees from 04/01-04/15 - if you bring your return late you pay pay pay! I politely tell anyone coming in late that they will go on extension ( I will start filing the extensions tomorrow) but they still push and hope it will be done by 04/15 - I've decided I should make it worthwhile!

            Comment


              #7
              One guy here

              Originally posted by dyne View Post
              my only conclusion is that clients think LESS of us if we charge LESS. Preparers who charge high fees are respected more.
              One preparer here is famous for dragging out the completion of the return, then overcharging. (Like $800 for a Sch C.) He is frequently on the golf course while the rest of us are slaving away. So it seems to be working for HIM.

              A contractor who worked on my house told me that he went to this preparer cause he knew lots of loop holes. I thought, "You idiot, EIC, CTC, and Section 179 are not loop holes." I didn't say anything cause I really don't want a client that thinks he's getting away with something. He's probably cheating to boot. Not reporting income, or deducting a gazillion miles, or paying in way too much and thinks the preparer is a genius when he gets a big refund of his own money.

              But, yes, I think there are those who don't respect our time until we MAKE them. I was frequently getting cornered by church friends, parents at ball games, etc. I finally just got to where I was able to tell people, "Give me a call at the office, M - F, 8 - 4, and I'll be glad to talk to you about that."

              I'm glad I read this. I am working on a return here that is pretty simple. It has been the same return for years, but the folks have gotten easier to work with. I was thinking of going down on the charge. ( I KNOW, what is wrong with me?!) Then I remembered all the phone calls in the past. I'm just NOW beginning to feel good about this one, why would I shoot myself in the foot? Thank God you stopped me, dyne.
              If you loan someone $20 and never see them again, it was probably worth it.

              Comment


                #8
                Originally posted by RitaB View Post
                But, yes, I think there are those who don't respect our time until we MAKE them.
                I agree. Although I would phrase it: until we respect ourselves first.

                It's a tough issue. I have raised my fees 30%t last year (mentioned in YE letter) and only lost a handful of clients, two of them with complicated returns, which I regret having lost. Both of them wouldn't even have incurred that much of an increase but never talked to me. Since there were other issues going on with both of them it probably good anyway.

                I think I still do not charge enough for biz returns (2106, C, F) but do charge too much for simple tax returns.

                I also believe that getting tax returns done too fast is a sign to some clients of "not being a good preparer", although others really appreciate this.

                Comment


                  #9
                  Good points!

                  Originally posted by Gretel View Post
                  I agree. Although I would phrase it: until we respect ourselves first.
                  Wow, that's good! And, I think that's exactly right. I finally realized that THEY need ME more than I need THEM.

                  Originally posted by Gretel View Post
                  I also believe that getting tax returns done too fast is a sign to some clients of "not being a good preparer", although others really appreciate this.
                  Yes, I have a couple here that I'll get done today where I am actually changing the date to April 2 cause I don't want them thinking I don't have enough to do. Don't tell anybody. And, I am MORE likely to work harder for people who tell me to take my time. I just realized that, too.

                  Wow, this is like a big couch session for me.
                  If you loan someone $20 and never see them again, it was probably worth it.

                  Comment


                    #10
                    Originally posted by Gretel View Post
                    It's a tough issue. I have raised my fees 30%t last year (mentioned in YE letter) and only lost a handful of clients, two of them with complicated returns, which I regret having lost.
                    Yes a sudden 30% increase will drive some away. I try to raise every year, 5% sometimes 10%, it lessens the shock value. And I learned NOT to put notice in my YE letter of upcoming rate increases, it just gives them time to look elsewhere and leave.

                    Just got a call from the youth soccer league wanting a 990EZ down by weeks end and they were shocked when I told them $750-1,000 and no it wouldn't be ready by Friday. This is not the time of year to be price shopping IMO.
                    "A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain

                    Comment


                      #11
                      Not competing on price

                      I don't try to compete on price. I raised my prices about 5% this year, especially for my NY commuters since I have to pay $100 to NY now and forever. Sometimes, clients will pay more for that CPA after the name; so I put my EA and MBA in finance on everything. Most of mine will pay more for the extras, taking phone calls throughout the year, etc., so I price the tax prep high enough to fold in other contact with them. I don't want someone NOT calling me when they're considering something with tax implications, taking an early withdrawal from their IRA for instance, because they don't want to get an extra bill. If I guessed wrong on how to price their return, I add a fee next year. I'm cheaper than the big CPA firms but more expensive than Block and the chains and many kitchen table accountants. I don't apologize for my prices. I might mention how much I saved them or the courses I took this year or the reading I'm doing on the new tax laws to be able to serve them better.

                      Comment


                        #12
                        I have come to believe also that if we get a return prepared TOO quickly, the client will think
                        if it was so easy WHY am I being charged so much? So, I HOLD all returns about two
                        days extra to "MULL OVER" the return in my mind (I have discovered errors I made
                        that way) and so that my clients do not think" He must not be busy OR the return
                        must be SO simple, etc." I have noticed that many CPA's in this area take WEEKS
                        or months to complete the preparation of a return. Perhaps that is done so they can justify
                        their high fees. I also have a rule that I NEVER reduce my fee.
                        Last edited by dyne; 03-31-2010, 10:55 AM. Reason: moe info

                        Comment


                          #13
                          I don't play games

                          with my clients. The returns are prepared while they are at my desk. When we are done, we are done. I charge very reasonable rates and remain competitive. I never apologize to myself for doing a good job for my clients, the speed of getting the return done, nor do I apologize for the fee. I charge by the form and talk to them about any new form charges that are incurred (sch M) etc. Technology has made their lives and mine much easier. We all realize that it costs more to do anything today.

                          I try to give them advice to help them make better tax decisions where needed and I'm available to them year round. As a home-based business, I rely on referrals and I get several every year while trying to maintain repeat business. People are going to go elsewhere, but some will also come back. We have no control over this. As a consumer, I look for better deals in some areas and remain constant in others. So will our customers.
                          Titles will always mean something to some and nothing to others. I think I'll start putting BBA after my name to see if it increases my business( smile).

                          Seems our biggest competitors are our software companies that sell to us while also marketing to the general population.

                          Peachie
                          Last edited by Peachie; 03-31-2010, 11:15 AM. Reason: spacing issues

                          Comment


                            #14
                            Peachie, you might also think about putting an EA after your name, too.
                            ChEAr$,
                            Harlan Lunsford, EA n LA

                            Comment


                              #15
                              When I started my tax service business 25 years ago, I talked to another tax preparer who
                              had been in business for many years. He advised the FIRST rule is NOT to attempt to
                              prepare returns while the client waits. There are MANY reasons: it makes you hurry and
                              greatly increases your chance of making an error, it causes others to wait upon you
                              to prepare the returns and on and on. It serves NO purpose that I can see. Most clients do NOT
                              WANT to wait on a tax preparer to perform the work to prepare a return. Why should they? A client of
                              mine for many years recently went to a preparer who prepared returns while you wait. He
                              said he would NEVER go back there again after he spent most of the day there. I am an EA.
                              Last edited by dyne; 03-31-2010, 11:38 AM. Reason: more info

                              Comment

                              Working...
                              X