Last week I mentioned that increasing fees for the annual work performed for clients is one of the ways to make more profits from your clients.
I would encourage you though to go further than simply increase your standard hourly rates, client standing orders and ‘service menu prices’ by a fixed percentage.
Most clients are quite used to the idea that the price of a train ticket or a hotel room depends on various factors such as when they book it, pay for it, whether it’s during a busy season or a quite period and so on.
Could your standard terms of business and fee quotes incorporate similar variations? I know some accountants for example who refuse to work for clients in January each year unless they are paid up front and at 150% of their normal fee. This works to incentivise clients to provide their information earlier in the year. It also means that the accountant feels that the pressure under which she works in January is more bearable as she won’t have to chase for the fees afterwards – and she’s been well paid for the stress of the extra workload.
Other accountants increase their fees but also provide special vouchers that clients can use to reduce the fee back to last year’s level – if presented with all of the paperwork before a specified deadline.
Some accountants simply set their fees by reference to the month in which they receive all of the accounting records or tax return information. The fee clients pay depends on which month they choose. The accountant gets rewarded at a different rate by reference to the choice that the clients make. Again, clients are used to this. They can have the same restaurant meal at 6pm or at 9pm in the evening. Their choice. If they elect for the earlier sitting they pay less.
Why don’t more accountants educate their clients to accept that the fees they pay will similarly vary by reference to salient factors?