Raising Fees?

[Black Bart]

What do you think about raising fees next month? Are you going to go up on yours or are you satisfied with them as they are?

I'm thinking about going up $10 to $20 for the simple reason that inflation is killing me. I just paid $83.15 at Office Max for an HP1012 toner cartridge and everybody is alway wanting free copies made. Somebody said here a while back that $20 was "nothing." It's not nothing to me, because regional prices differ widely and that's quite a bit in this town.

Do you think maybe a percentage--say 20 or 25%--would be better?

I just don't know. Several years ago I raised prices 20% and lost about 100 customers. Before the raise I had 500 or so clients. Since then I've just been kinda creepin' up on individual cases. I'm back up to 500 clients now. The higher fee made the money come out about the same that year and I did a lot less work, but, still, I hate to run anybody off. This is a very conservative and frugal neck of the woods to do business in (sorry for that danglin' preposition, Armando). Too, they have long memories and badmouth you around town some.

To raise or not to raise, that is the question.

[Roberts]

Your fees go up every year. Tax rates on the office, rent or utilities, supplies, software... They have to realize that you are getting pinched if you don't raise them at least slightly. It might be important to do it slowly but routinely. The idea of raising by 10-20% seems HUGE to me and I could see why they would be upset. 3-4% each year is less likely to cause a huge problem with most people.

A $20 increase when you are making $15 per hour can seem to be a HUGE increase.

[taxmandan]

Fee increase

Roberts has it right, annual increases that are smaller rather then occasional big jumps are easier for clients to accept. As for timing, I raise my fees on April 1st each year, the laggards and summer extension folks can pay next year's rates for their procrastinating.

[Roberts]

April 1st is an awesome idea. What I'm try to do is have a little higher rate but offer coupons that expire April 1st. It's the same effect. Late clients and people over the summer are charged considerably more and EVERYONE loves a good coupon!

[KBTS]

Rates

I am probably going to raise rates $5 -10 per return. I know my prices are somewhere in the middle of the local market, so I do not think the increase will turn away too many clients.

Bart, I know what you mean about doing business in a very conservative and frugal area – I had someone call to ask how much to do a return and then say “It’s that much? I can do it myself, but I really wanted to e-file.” It is hard to get people to understand that the lowest price in town may not be the best thing when it comes to taxes.

You have to decide what is best for your situation, but I think the advice for smaller annual increases makes sense. Also, increasing fees April 1 should at least make you feel better about the extra stress the late filers inflict on you.

[Snaggletooth]

Wratchet them up...

..you've got to. A big increase will run off your customers, so the increases must be subtle and consistent. Occasionally, I get complaints even though my rate structure is less than HRB. (Years ago it used to be higher, so they've been doing better than me). It's amazing that complaints often come from people whose incomes have been burgeoning upward every year.

Folks, virtually NOTHING you buy goes down. Raising rates is simply a matter of survival.

[OHIOTAXMAN]

2 Price Tiers

How about...............

Raise your current clients $5 to $10 .

Raise the price for new clients $10-$40.

After all, new clients take longer.

I don't think anyone would object to $5 to $10 dollars.

[geekgirldany]

I take the route OhioTaxMan suggested. I go up more on new clients and usually $5.00 on old clients. I've had to go up atleast $20 bucks a month on new bookkeeping customers. This $50-$60 bucks a month is just not getting it with the more complicated customers. It was that I could spend 1-2 hours on bookkeeping now it has went to 3-4 hours or more on more complicated ones. I've also had to set a min. fee. Which reminds me I need to update this on my Website.

[Black Bart]

Where did

you get that "far-out" name? I saw some posts by somebody using that name on another website discussing favorite movies, stars, etc. Was that you?

[geekgirldany]

who me or ohiotaxman

Yeah it was probably me. How the heck did you get there? heh

I belong to alot of forums. I am a forum lizard. I need to go and visit that site. I haven't posted in awhile because I haven't really been to a movie theater in a long long time. I'm chained to my desk.

Edit:

Oh and I got my name from ususally being the only woman on a forum. Plus I'm pretty good with computer and programming.

[Black Bart]

who? you.

Don't know how I got there. Was looking for something else and saw your unique name on a list of search answers, so I gave it a shot. No idea how to get back. They mentioned movies...hmm, let's see: Amityville Horror and "teasing brothers" -- Halloween -- something about a "tearjerker" -- the Simpsons -- Will Smith -- Jerry Lewis/Nutty Professor -- Tom Selleck -- Angelina Jolie -- there's a small picture-twentyish girl in jeans --bunch of other stuff; can't remember it all.

Surprised if it was you. You seem so businesslike here and seemed so "fun & carefree" there. What's a "forum lizard?" What's the "dany" part of the name (If it's not being too nosy--never mind if it is)?

[geekgirldany]

ha! yeah thats me. The owner asked me to join because they needed more women on there. I put those little pictures "avatar" beside my name. Some of them think its me. So funny!

I try to stay more serious on here since it is a tax forum. I leave my more mischievousness nature for the other boards.

I just made the term "forum lizard" up. I call myself that because I not only frequent different forum boards but I often leave after the membership has increased so much that I can't keep up with the postings. It has recently happened at another board and I don't post there anymore. I also help out in building memberships up in forums but then leave.

Dany is my nickname. Well my relatives still call me that. It is short for Danyelle.

[Black Bart]

GGD -- Avatars & supermodels

ha! yeah thats me. The owner asked me to join because they needed more women on there. I put those little pictures "avatar" beside my name. Some of them think its me. So funny!

I try to stay more serious on here since it is a tax forum. I leave my more mischievousness nature for the other boards.

I just made the term "forum lizard" up. I call myself that because I not only frequent different forum boards but I often leave after the membership has increased so much that I can't keep up with the postings. It has recently happened at another board and I don't post there anymore. I also help out in building memberships up in forums but then leave.

Dany is my nickname. Well my relatives still call me that. It is short for Danyelle.

Yeah, well, that's a smart owner asking you to join. That "avatar" certainly worked because even I (a 66 year-old "over-the-hill" male) noticed it and asked myself, "Self, what's the odds of meeting a supermodel on an accountants' messageboard?" And, of course, the answer was "About the same as winning the Powerball lottery." Still, I thought it would be "interesting" (hmmm...is that an accurate description?) to talk to one, and there you were, sooo....

("So funny," eh?) That's a wicked sense of humor you've got. Okay if I chuckle-chuckle?-- don't like to LOL).

Anyhow, kinda catchy -- those little pictures -- aren't they? Right up 'til you mentioned it, I had no idea such things existed (I mean I'd seen some, but didn't know what or why they were there). Looking up the term, I see people are selling them right and left on the Internet (also some free), although I'll bet that many boards wouldn't let them "on;" otherwise they'd probably be overrun with pictures.

Nice of you to help build up memberships for new boards. You should ask somebody here if there's a charitable deduction for helping out new businesses (also check with Bees and Armando about using that pic--new "accountants" would be coming in the windows).

P.S. Note to myself: Beware of "geeks bearing gifts."

[Matt Sova]

Raising fees

I raise my fees every year. If you do not raise your fees each year you will be stuck in a positions of having a large increase in fees.

I started my own practice 11 years ago and now I charge over 2x what I charged then. Basically, if you know that you are worth more, your clients will too.

Matt

[Snaggletooth]

Where you been?

Geez Matt - thought you had forgot about us common folk! Good to have your arrogant self back on this board. I got a brother in Michigan, and if I ever get up there we'll have a beer...

Snag