I’ve written a number of previous posts on related subjects and thought it would be useful to provide a one stop link to each of them:

I think there are 4 different scenarios where it may be necessary to negotiate fees for your services:

  1. The annual fees you charge to existing clients;
  2. The additional fees you charge to existing clients for ad-hoc and advisory work;
  3. The fees and terms you quote to prospective and new clients for recurring compliance work; and
  4. The fees and terms you quote to prospective and new clients for one-off and advisory work

Existing clients

I’m a great advocate of regular monthly billing (or payments on account). Given the unprecedented financial turmoil in the economy and business world accountants must look after their own. You could never afford to risk non-payment of your annual fees. Now there is a greater risk than ever before that clients may not be able to pay those bills.

Accountants who consider themselves to be business advisers should practice what they preach (or what they should be preaching).  Now is the time to review your billing practices so as to reduce the risk to your firm/practice.

Previous posts that address this issue:

–  Detailed fee quotes and bills for professional work

Don’t just increase your fees, vary them

Setting fee rates – using costs incurred or value provided?

“You can charge more if you have SEX with your clients”

Fixed fees

Prospective and new clients

All new clients should be obliged to agree to make monthly payments on account. You need to establish systems to facilitate this and to issue the monthly invoices for VAT purposes.  There is no good reason for allowing new clients (who owe you no loyalty and whom you barely know) to pay you long after the work has been completed.

Where you are not providing recurring compliance services you would be justified in seeking a payment on account before starting work for a new client. I always do so when providing consultancy and mentoring services. My standard approach these days is 50% payable before I start work. The balance is then payable about 3/4 of the way through the contract.  If payment is late, I will stop work. I’d be a hypocrite if I didn’t insist on strictly commercial terms as that’s often one of the subjects on which I am advising the firm that has engaged me.

Previous posts that address this issue:

Clients will pay high fees for good advice

Timesheets and value pricing professional services

What is a fair fee?

Estimated fee ranges

No reference to fees and plenty of free advice time?

Are you charging enough?

Should you put your fee rates on your website?