Lots of accountants I work with used to struggle to charge what they feel they’re worth for the work they do. Sadly I can’t just wave a magic wand to change things. Mostly what’s required is an increase in confidence and improved communication. It sounds easier than it is in practice.
One accountant I mentored was quite happy with his basic fee quotes. However the work he did for a number of his clients had evolved over time. He wanted to know how he could ensure he got paid for such additional work.
I ran through with him some relatively straightforward approaches he could adopt. They weren’t all appropriate to his way of working. We explored in more detail exactly how he might apply those that he felt comfortable with.
After a few weeks he told me how much things had changed. He was no longer routinely wasting time worrying about how to recover additional fees from his clients. He was happier and his clients were too – and yes, he was charging more than previously.
By way of summary, here are ten approaches to getting paid for additional work that should also help you avoid losing out.
1 Be specific at the outset
If we assume you have quoted a fixed fee, you will want to avoid clients being able to take advantage. Be clear as to what is covered.
How clear are your engagement letters?
2 Restrict unlimited facilities
If you offer unlimited calls and support as part of your service offering, consider including a ‘fair use’ limit to avoid being taken for a ride by the odd client.
This wouldn’t allow you to suddenly spring any ‘extra’ charges on a client at the end of the year. It would though legitimise you pointing out that you feel they are abusing the facility.
One of the accountants in my Inner Circle group had not spoken to a client about the almost daily free support calls required by a new in-house bookkeeper whom the accountant was effectively training for free. I encouraged him to nip this in the bud so that either the calls would stop or, as happened, the client agreed to pay an additional fee for the training her new bookkeeper required.
3 Give yourself wriggle room
If you quote standard packaged fees on your website include some caveats to avoid being taken for a ride. Accept though that this is not a get-out if you are the one to have made a mistake at the outset.
By the way, I’m not a fan of quoting fixed fees that apply regardless of a client’s specific situation.
4 Follow your gut
Ensure you size up clients before quoting a fixed fee. Indeed avoid quoting fixed fees if your gut suggests this is the sort of person who would take advantage.
5 Be clear when the clock is ticking
It’s generally best to avoid creating the feeling that the fee clock starts ticking every time clients call you.
You want them to keep in touch. You want to know what’s going on and what worries they have.
You also don’t want them to think that every time they get in touch you’re going to try to sell them additional work and fees, so your fixed fee should probably anticipate an element of this.
If a client does want you to advise on something specific outside the scope of the recurring engagement, can you quote for this before starting the extra work?
6 Bill promptly
Keep the client informed of your progress and ensure you bill promptly – as soon as you’ve done the extra work and at least monthly if the work is protracted. Face your fear and bill it anyway, before it loses its value to the client.
7 Delegate the work
If the extra work is be done by staff or contractors, make sure they know your views and advise you if they think any extra work will justify an additional fee.
If you still have timesheets, even if only for management purposes and to justify fees paid to contract staff, keep track of the accruing costs. The sooner you can decide whether an additional fee may need to be considered, the better.
8 Delegate the billing
The staff who actually did the work are often the best people to draft the bill – after all, they know exactly what they did.
If the staff or secretaries are responsible for billing the extras maybe they will be more commercial – after all the more they bill, the more money comes in to pay their salaries/fees.
Of course you always remain responsible for the bill and should check it before it goes to the client. Some staff may over charge to justify the extra time they spent, even though it wasn’t justified.
9 Talk to your client
If you’ve underestimated a fee and want to increase the likelihood of recovering more than the expected amount you must take the initiative.
Set out your justification and plan your approach to the client. Don’t just send the bill. You will only know what your client thinks if you speak to them – and you trust them to tell you the truth!
There is a tendency to simply send an invoice that references extra work and then await the dreaded phone call or letter. A better alternative is to first speak with the client to assess their reaction
10 Event billing
This is the classic approach of billing by reference to specific pieces of additional work rather than waiting for the end of a quarter – or even the end of the month.
If it’s too much hassle to raise an invoice mid-month there is something wrong with your billing process. Smaller, more frequent bills don’t look so bad, unless they are so frequent that the client fears a bill each time they speak to you.
In general though each bill highlights the value of a specific extra service. This is much better than expecting the client to remember and appreciate the value of a whole succession of small and large jobs performed over an extended period.
If you’d like to have a chat about related challenges you are facing and you need a confidence boost or some tips on improving your communication around additional fees, simply book a time for us to have a chat here >>>