Fees poll

[JoshinNC]

Both a man of wisdom and truth!

Bart,

You always seem to put things into a more easily understood manner, for which I am very grateful. And, I do have clients who I charge different fees to for the same level of work (depending upon how many call backs I expect during the year for copies of returns, explanations of information, "free" 5 minutes of advice). I was just referring to what I saw as a fee schedule that was predicated upon the belief that the more someone makes, the more you charge them. Maybe this does sound very "Mr. Smith" of me, but I try to be as fair as possible while still making a decent living. My practice is new, and growing. Maybe, in a few years, when we are established, I'll have the ability to be more choosy with my client base. But, for the time being I am trying to get my name out in the community as the "good accountant", not the overcharging zealot.

Lion, I greatly appreciate your situation. You are in a very affluent area with inflated prices for everything from housing to professional services. I would charge "what the market can bear" also, and commend you for it. But, just remember, many of the people in your area aren't moving south just to get away from the snow (we get a little bit down here), they are also running from costs that make living in the megalopolis of the Northeast too darn expensive.

[OldJack]

I was just referring to what I saw as a fee schedule that was predicated upon the belief that the more someone makes, the more you charge them. Maybe this does sound very "Mr. Smith" of me, but I try to be as fair as possible while still making a decent living.

Keep in mind that there are those clients that if you don't charge them "what the market can bear" they will think the quality of your service is not as good as the other outfit in town. For many years I charged what I thought the service was worth (hourly) but now I mainly charge what I think the "client" feels like it is worth. Therefore, I may charge one client $900 for the same tax return I charge another client $450. Tax rates are based upon the taxpayers ability to pay so why should your fee not be based on the same concept.

We are our worst enemy! We shoot ourselves in the foot by trying to complete with non-professionals that are trying to compete with us. I prefer not to do the work for those that want quality professional service at a dirt cheap price, but are willing to pay outrageous fees to other professionals such as attorneys, repair mechanics, etc. The same goes for clients that compare my service to their Uncle Jack's tax preparation. Any client that complains about my fee will receive a discount, free service for that year, or whatever it takes to make them happy, but they will go elsewhere the next year as I don't want them as clients.

[Lion]

Fees

But, I'm NOT charging what the traffic will bear. My point is that in this expensive area, the bedroom communities for pricey NYC, I AM pretty cheap (but not the cheapest). If I had CPA after my name instead of EA, my prices would start at $750. Mine are less than $250 for the return in question. But, I'm higher than the curve on this poll. My point is that is NOT because I'm charging more to wealthier clients. My point is that my prices might seem high to you because EVERYTHING costs more here in Fairfield County, CT, than in North Carolina or almost anyplace else in the country. For instance, CT's starting teacher salaries (the state as a whole and not just Fairfield County) used to be about the same as Washington, D.C., and Alaska, but have now pulled ahead to be the highest in the nation. (Stratford, CT, just OUTSIDE Fairfield County hired a new second grade teacher fresh out of college for $95,000; 20-something and she will be in six figures by 2007!) I'm just trying to point out that my high number in your poll is a cheap price for that return around here. I really can't go cheaper and provide professional service. The preparers I know who charge less than I do prepare taxes on their kitchen tables with paper and pencil and are not available for year-round service or work out of seasonal storefronts. I don't separate my charges for my knowledge and availability for my charge for the packet I hand a client, so I don't know how to tell you what my price would be for just the return in the poll without my service. They get me with their returns, so I have to charge for the me that answers their year-round questions, etc., when I bill them for their return. That way, many do actually call me before they do something that has tax consequences.

[Roberts]

Just me

I would charge someone $155 but would give them a 20% discount if they had an appointment scheduled before April 1st. I realize people around here charge more or less but I'm able to get residual income from tax clients via investments. Investment clients with at minimum $250,000 in a fee based account will receive $350 in free tax prep as part of the service on the account.

I am more than willing to make slightly less per hour to have a full schedule of clients. Once that is achieved I'll raise rates at a faster pace.

[JoshinNC]

Lion, I completely understand.

$750 for a personal return with an A and B. That's CRAZY!

You ought to be able to grab alot of business in your area with your prices.

[Black Bart]

Josh "Smith" - Different strokes

Bart,

Maybe this does sound very "Mr. Smith" of me, but I try to be as fair as possible...for the time being I am trying to get my name out in the community as the "good accountant"

Nothing wrong with that and, as they say, it "sounds like a plan." A person should do what they think is best. You want to become known and established in the territory and taking that tack -- set a fixed price/stick to it -- seems like a good way to build up trade for a new business. Lots of clients "shopping around" prefer to know in advance and for sure what the fee's going to be (like Holiday Inn used to say -- "no suprises"). The point is, we all know our markets and goals better than anybody else and must act accordingly.

Even though my practice was established long ago, I use a "sort of" fixed-fee schedule for most returns, but it's only a ball-park schedule. I don't absolutely go by it because I want to leave myself some flexibility to vary prices as situations develop and evolve. I usually will give a range (like $150 to $250 for a "small" C) and generally don't exceed the
ceiling quoted. But flexibility is useful because (1) it's effective against "fixed-fee" Jackson-Hewitt and others (2) some people are such miserable pains-in-the-neck and take so much time and trouble to do that you can't possibly be paid what it's worth charging the "regular" fee.

Right now, if you stay with your plan, you'll probably just have to suffer through some of that, but later on when you're well-established with a solid client base, you'll be able to afford and allow for some flexibility. Of course, you might like it just like it is and decide to stay with it. I've got a friend in the business who just refuses to agonize over fees -- he prints a forms price list on January 1st and whether the return/person is hard, easy, or simply impossible, there's no variance whatever. He says "win some -- lose some, it all comes out in the wash." Maybe so -- it works for him.

P.S. There's always been something admirable about a "Mr. Smith" attitude -- even more so nowadays, as it's practically on the endangered species list. Anyway, it's kinda refreshing (I need to get out the Brasso and buff my tarnished idealism of yesteryear). Did you ever consider running for office? Lord knows, we could use a bunch of Smiths up there and your knowledge of politics in our discussion the other day was quite impressive (actually, I didn't disagree with everything you said -- you made good arguments). If all you young people simply followed the advice of us oldsters, nobody would ever try anythng new and lots of good ideas would never become good realities.