Poll II - Revised Edition

[Black Bart]

Let's tighten the focus to narrower categories now that we've got the general boundaries established. The majority is Bell-curvishly in the center; like this:

$0-75 4% one vote
$76-150 57% thirteen votes
$151-250 30% seven votes
over $250 9% two votes

So, almost everybody's somewhere between $76 and $250, except for the one vote for $75 (that's me--apparently the liberals are right and poverty does indeed confer nobility upon one) and the pair of pirates at the end gougin' for over 250 bucks (OldJack & jainen--I bet that's y'all). I rounded off those percentages to the the nearest whole number.

Sandy was saying in the last post on the old poll that it's hard to say about the fees because of variables and complexity of return, so to address that, here's what I had in mind:

The subject should be an "ordinary" 1040 plus A & B. None of these: 2106, 8283, "box cases", "sack jobs," long lists of cash donations, multiple interest/dividends. In other words, an "easy" A (house interest/church/prop tax) and an "easy" B (less than half-a-dozen 1099 DIV/INTs. One state tax return (full-year resident) is included in the price.

If you've voted before, give it another shot under the revised prices and rules (or, do like me and do whatever you want).

HEY: I just noticed -- we don't have to stick to four options; we can have ten (they're so smart!).

Okay, here we go.

[Lion]

Fees

Okay, okay, so I'll be under $250 now that you've simplified it a bit. But, this is still Fairfield County, CT; and we have to charge more than those Californians! And, I don't charge extra for all their telephone questions or recomputing ES payments after their CD matures or their questions re putting their children on their house deed or....

[Black Bart]

Oh alright,

we have to charge more than those Californians! And, I don't charge extra for all their telephone questions or...recomputing...or their questions or....

I thought I was gonna get to be the good guy here, but somebody's alway scrougin' in line. Well anyway; now that you've 'splained it all away like that, I realize that you are a ewe in wolf's clothing. That "pushin' $250" price is actually a gesture of magnanimity on your part (att'n.: Bill Gates Foundation--look out, you've got competition) and it's just a matter of time 'til you chuck all this commercialism and take up sackcloth, ashes, and social work. Me too; in fact I'm cuttin' my price to $50 to try and match your generosity.

Noble is as noble does.

[Lion]

Well

I guess I have to fess up: I did live in Santa Barbara, CA, for a decade. But, I wasn't a tax preparer then. To lower my prices, I'd have to do more returns. And, I think I'd rather do fewer returns and raise my prices and get more sleep or see my family during tax season! Just realized that my hourly rates have been the same for nearly a dozen years: $40/hour, $300/day. Maybe it's time to go up to $50/hour, $350/day....

[Black Bart]

I remember now.

I guess I have to fess up: I did live in Santa Barbara, CA, for a decade. But, I wasn't a tax preparer then. To lower my prices, I'd have to do more returns. And, I think I'd rather do fewer returns and raise my prices and get more sleep or see my family during tax season! Just realized that my hourly rates have been the same for nearly a dozen years: $40/hour, $300/day. Maybe it's time to go up to $50/hour, $350/day....

The girl from the beach (warm days-cool nights-gentle breezes) who moved the day before the earthquake. Right?

I once stayed with a family in Petaluma for a while.

Re: Prices -- Yeah, that does sound pretty good. I always like a simple approach (Occam's Razor) and it would be nice to cull out some of the culls and just skate for a while.

[Jim R]

Hard to Set Fees

It is hard to set fees. There are formulas, but I have found that they really don't work. It boils down to what the market will bear combined with what you are confortable with. Locally the range of fee for this type of return is from $75 for homebased part-timers to $180 for HRB and larger CPA firms. (For some reason people seem to be willing to pay a premium to HRB). I charge somewhere right in the middle of that range.

However this past year Liberty Tax Service came into town. They have been very aggressive with coupons, price matching and offer for "free" preparation. (Have any of you experienced the awkwardness of justifying an $80 fee for a basic return when they could have gotten it "free" at Liberty) This shows you can not compete on price alone. Someone can and eventually will come along and charge less.

[jimmcg]

Those interested in price only I generally turn away. Just charge a reasonable fee and provide a good quality service. Those that walk away you will never miss.

[WITTB]

(Have any of you experienced the awkwardness of justifying an $80 fee for a basic return when they could have gotten it "free" at Liberty) This shows you can not compete on price alone. Someone can and eventually will come along and charge less.

Of course we have. But the answer is...."They know what their time is worth, and I know what mine is worth. If you do not think my knowledge and advice is worth my fee, you are free to go elsewhere, no hard feelings."

It's nuts to try to compete on PRICE. Compete on knowledge, on service, even on how you treat people, but don't let anyone else set your price on your time. And just keep remembering that it is better to do three $200 returns than it is to do five $100 returns. And you may even have some time left over to actually enjoy that extra $100.

[Jiggers]

Price & Service

I don't let client's set my fee. I used to when I first started, but experience changed that. If they don't like my fee they can go elsewhere. I lose more clients to funeral homes than to my competitors.

[JohnH]

Fee complaints

I read an article many years ago that has helped me immensely concerning fees. The author said that an occasional complaint about your fees is a good thing - it lets you know you aren't pricing your services at the bottom of the market.

He also said he never argues with people about fees or tries to justify them. If a client complains, just tell them to pay you whatever they think it's worth and next year find someone who will work for their rate. It saves a lot of aggravation and hassle, and it keeps you focused on moving forward rather than dwelling on the past. The most energy-draining effort you can expend is obsessing about some jerk who tries to short-change you, so just bring some closure to the situation and move on. I like that philosophy.

[BP.]

Great points, WITTB, Jiggers & JohnH. I keep a reminder on my desk that competitors who are focused on price are providing me an opportunity to grow based on service.

[JohnH]

Have you ever had someone complain about the fee?

The only question to ask someone if they ocmplain about the fee should be:
"So how much do you think it should be?"

Don't try to justify it based on how hard you worked, how much you know, how good you are, etc. Just shift the monkey to their back and invite them to tell you what it should be. They NEVER have an answer - just some vague nonsense about it just seems like a lot. The truth is, some people are just chronic complainers (or stingy cheats who get their kicks out of bullying people into doign things their way) and they won't change. Better they go to JH, HRB, or some wimp down the street who will put up with their nonsense. And on those rare occasions when they vneture a guess, that's the time to say "Just send me that amount and find somebody else next year ." They have no moral ground not to pay you since they set the amount.

[sea-tax]

This idea is not so much for those who complain about the fee but rather those Bookkeeping clients who get a little tardy with their bill.

I usually will sit them down and then say something like this:
Me: Mr Smith you own a gas station right?

Mr Smith : Yeah I own a Gas station?
Me: What do you do when someone puts gas in their car then proceeds to drive off without paying.
MR Smith: I call the police, can't stand those s.o.b.s.
ME: I pickup the phone and start to pretend to dial?
Mr Smith: What are you doing ?
Me: Calling the police someone just robbed me as well.

This usually drives home the point and I usually get a check. Thankfully only have to use this tactic occasionally.

[veritas]

lol

All bookkeeping, payroll clients must give us authority to ach their accounts for our fees.

We have some older ones who are still giving us checks. I have been thinking of ways to encourage them to give us permission.

[Bees Knees]

Me: Mr Smith you own a gas station right?
Mr Smith : Yeah I own a Gas station?
Me: What do you do when someone puts gas in their car then proceeds to drive off without paying.
MR Smith: I call the police, can't stand those s.o.b.s.
ME: I pickup the phone and start to pretend to dial?
Mr Smith: What are you doing ?
Me: Calling the police someone just robbed me as well.

Mr Smith: I haven't driven off yet...got anymore coffee?