What is a fair fee?

Imagine a client has accepted your fee quote but that the work takes you less time than you had expected. Would you reduce the fee to be ‘fair’ to the client?

If you find yourself in such a situation only you will know what is the right answer in those specific circumstances.  Only you can fairly anticipate your client’s reaction and the longer term consequence of your actions.

Many accountants still charge clients a fixed hourly rate for the time they spend on the client’s affairs regardless of whether they spend the time researching advice that will save the client money, or a simple administrative task. Clearly the former is far more valuable to the client.

Many traditional accountants then tie themselves in knots when they realise that the time records reveal that more time has been spent than had been budgeted. Often the excess is written off if it can’t be shown to relate to additional work that the client will value. This is one of the arguments used to highlight the fact that time records do not determine the bill.

An increasing number of accountants quote a fee and simply use their time records as a management tool – to identify how much time they have spent on each client. Others don’t even bother to do that. The fee is the fee is the fee. Sometimes they will have underestimated the time that the work would take. Sometimes they will have over estimated. On balance they hope that these occasions will balance out.

The key (usually) is whether the client was happy with the original fee quote AND if the service they have received matches up to their expectations. If it does then very few accountants would offer a refund or a reduced fee.

What matters is the client’s perception of the value of the work and the service you have provided. That is all that ever matters and it’s only when the accountant tries to charge more than this that there’s a problem.

Bottom line:
If you choose to apply some arbitrary hourly charge-out rate to your services that’s your business. It’s not a reflection on what it has ‘cost’ you to do the work. It’s not even a reflection of the value of the work. Does it result in you charging ‘fair’ fees? It may do.

What is more important – that the fees are fair to you or to your client?

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Networking – what does it mean?

‘Networking’ is one of the 12 key business skills for ambitious professionals. It is also one of the most misunderstood skills. It doesn’t mean ‘Netselling’, ‘Notworking’, or ‘Partying’.

It comes as a surprise to many people to learn that the best networkers are those who listen more than they talk and who are genuinely interested in the other person. It is generally counter-productive to focus on trying to ‘sell’ anything (even yourself) when you are networking. It’s also a ‘long game’ such that the earlier you develop your skills here the better.

Many people mistakenly think of networking as something you do ‘to get clients’. That view misses the fact that you will often need to to ‘network’ within the firm or company where you work, as well as outside. There’s nothing much to do if you work as part of a close-knit team but beyond that, especially in larger firms, you will want to ‘network’ with people in other groups and offices if you want to maximise the prospect of achieving your ambitions.

To think of networking as something you do to ‘get clients’ is to confuse networking with marketing.

Edit 2013: You can get my 10,000+ word book specifically for accountants who want to Network more effectively. Just click here for full details>>>

If you would like to book me to speak on the subject at your in-house conference or training session, do get in touch. There’s an outline of my talk on ‘How to ensure your networking activity is successful’ here>>>  

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Do you really know or are you just trying to impress?

Years ago when I joined a new firm I remember an audit partner telling me about two tax managers in his team He preferred ‘Dana’ because she always knew the answers. He didn’t like ‘Susie’ as much because she was never sure of anything and always wanted to check with a tax partner.

I expressed the view that ‘Susie’ was probably the better tax adviser as she was more cautious. ‘Dana’ was probably more dangerous as it was likely that she was overstating her real knowledge if she never needed to seek a second opinion. Armed with this new insight the audit partner became more open minded and within a few months he found that ‘Dana’ had indeed been covering up her mistakes and creating problems for the future.

The fact is that audit partners and general practitioners generally want their staff to be constructive and commercial. Being cautious is good upto a point but ultimately it is the partner who makes the decisions.If you are always overly cautious you may be seen to be uncommercial. So you need to develop confidence in your own knowledge and ability but this should not come from bravado.

It is generally the partners or the business owner who should decide on the level of risk they want to take when it comes to advising clients. This means that ambitious accountants should never present unresearched technical advice as if it were gospel. So, even if you have to advise in a hurry, qualify your advice if it is unchecked. At worst you will be given more time to research things. At best the person who runs the practice or the department can decide whether further research is required.

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Online facilities for accountants

I authored a two page article featured in the January 2008 issue of Accountancy magazine. In it I shared a number of ideas drawn from my work with accountancy firms, facilitating partner strategy days and business coaching. I also identified over 30 generic online facilities and provided examples of how these can help accountants (and many others in business too).

If you don’t receive Accountancy magazine and would like a copy of the article just let me know your email address and I’ll get one to you.

Mark AT BookMarkLee.co.uk

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Accountants' websites – is yours doing the necessary?

I recently included the following note in my monthly newsletter for accountants and their clients:

 

I’ve been writing and advising accountants about their websites for some time now and have accumulated an enormous amount of tips, ideas and knowledge about what works and what doesn’t. I have also been researching ways in which accountants are making money directly through their websites and using them to provide an enhanced level of service to their clients.

Much of what I have written is available on my blog for ambitious professionals.

The simple truth however is that most accountants have simply done one of four things. Either they have:

  • created their own amateur looking website;
  • got a professional looking website that doesn’t work for them;
  • got a template website that looks much like many others;
  • yet to get a website.

Although website critiquing is not a mainstream activity for me I am happy to do this and can provide a tailored, practical and focused critique on request. It costs much less than you might expect and will highlight both the quick and easy things you can do as well as those that may require an investment of time and money to generate a positive return. If you want to ensure that your website works for you, then ask me about my Website Appraisal Critique for Accountants.

 

Mark AT BookMarkLee.co.uk or telephone 0845 003 8780 (local rate number – Tax Advice Network)

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Accountants’ websites – is yours doing the necessary?

I recently included the following note in my monthly newsletter for accountants and their clients:

 

I’ve been writing and advising accountants about their websites for some time now and have accumulated an enormous amount of tips, ideas and knowledge about what works and what doesn’t. I have also been researching ways in which accountants are making money directly through their websites and using them to provide an enhanced level of service to their clients.

Much of what I have written is available on my blog for ambitious professionals.

The simple truth however is that most accountants have simply done one of four things. Either they have:

  • created their own amateur looking website;
  • got a professional looking website that doesn’t work for them;
  • got a template website that looks much like many others;
  • yet to get a website.

Although website critiquing is not a mainstream activity for me I am happy to do this and can provide a tailored, practical and focused critique on request. It costs much less than you might expect and will highlight both the quick and easy things you can do as well as those that may require an investment of time and money to generate a positive return. If you want to ensure that your website works for you, then ask me about my Website Appraisal Critique for Accountants.

 

Mark AT BookMarkLee.co.uk or telephone 0845 003 8780 (local rate number – Tax Advice Network)

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Trends that will matter in 2008 – for accountants

I noted last week that I was not one for making predictions generally. Instead I simply set out my (accountancy related )hopes for 2008.

Since then I’ve had cause to consider what new trends there may be this year. Here’s what I’ve said:

1 – More clients will be texting communications to their accountants. NB: how do you print off any such instructions if you want to retain an audit trail of evidence? (instant messaging using skype will also become more prevalent but you can print these off, as you can emails;

2 – Increased use of VoIP (principally Skype*) in place of telephone;

3 – Accountants who complain that they can’t recruit the people they need will eventually get around to upgrading the material on their websites so as to attract the talent they seek. I have written extensively about this on my blog in recent months.

* NB: Since expressing this view on AccountingWeb I’ve heard from Dennis Howlett who has indicated that an alternative provider of Voip (Gizmo) will, in his (more informed) view be more attractive than Skype which he considers to be too flaky for general use. I suppose I’m hoping that skype will overcome its current limitations – not that I’ve experienced them myself.

On the tax front I will make one specific prediction. That, sadly there will be:

Absolute mayhem in October 2008 when taxpayers attempt to meet the new tax return filing deadline for the first time.

And as many have predicted for years there will be a continuing and growing demand for by clients for more than ‘just’ accounts and tax return services from their accountants each year. Again I’ve been blogging about this for some time too.

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Are you a cost or a benefit?

On his blog Dennis Howlett has been commenting on the suggestion made on another blog(!) that accountants cost money, they don’t make money. And that

 “if your accountant is costing you more money than she is earning, saving, or generating, then either you have a rubbish accountant or you have difficulty tracking your costs and benefits. Of course, sometimes the latter is caused by the former, but that’s another story entirely.”

Dennis notes that:

“Compliance has to be offered at factory prices because it has been commoditized and it is being outsourced. “

I don’t fully agree with this. What matters most is whether your clients perceive that you are doing a good job for them. Whether clients perceive that you are willing to fight their corner. Whether clients perceive that you are saving them money. I wrote a more detailed entry on this blog in August 2006 on the related subject of ‘perception is reality‘. I was reminded of it when I read Dennis’s comments above.

In a similar vein, your client’s perception about whether or not you are saving them money or costing them money is determined NOT by what you do but by what you tell them and show them that you do.

Clients don’t understand what accountants do. They need to be told how much their tax bill has been reduced EACH YEAR as a result of the accountant’s work. Accountants who tell/show their clients the comparatives each year will have happy clients. Those accountants who just do their best work each year and tell the client what tax to pay will have unhappy clients.

Like this post? You can now obtain my ebook containing loads more insights, short-cuts, tips and advice aimed specifically at accountants who want to STANDOUT and become more successful. You can buy the book or download a summary for free here>>>

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Happy new year – be careful what you wish for

I’m not one for making annual new year resolutions – or indeed ‘predictions’. Indeed, rather than risk ‘predictions’ for 2008 I offer instead three of my hopes for the new year, that Accountants will:

1 – earn more money by advising their clients about their menu pricing models – so that clients know they’ll pay higher fees if they leave things to the last minute;

2 – stop risking PI claims by advising on tax issues where they’re not sure how the legislation really works;

3 – engage a professional business coach to help them achieve their potential;

On a related point I have updated my business cards so that these make clear that I specialise in:

Improving the results of businesses that target or operate within the UK tax and accountancy professions

Three of the principal ways in which I do this are related to my 3 hopes above:

1 – Speaking at conferences and seminars for accountants and tax advisers on business development related and Risk reduction issues;

2 – Running the Tax Advice Network – which provides accountants in general practice with access to their choice of specialist tax advisers; and

3 – Providing mentoring/business coaching to ambitious professionals to help them to achieve more success, peace of mind and confidence at work.

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