Q:

Subject: clients and billing

Hi,

I am a CPA in CA and was searching on the internet regarding billing rates and came across your letter re fees and services.  Did you really send this to your clients and how did they respond.  How many did you lose?

 

Just curious as I need to raise my rates and trying to figure out how to do it.

 

Thanks for you time.

A:

If you're referring to the Client Guide, we have been sending the most recent version to clients for several years.  We now include it with each year's organizer.

It isn't announcing anything new, except when we raise our rates every few years.  The main purpose is to lay out how we work so that nobody can claim that we didn't tell them. 

Back when we were taking on new clients, we did send it to them so they could see what they were getting themselves in for.  We wanted to weed out up front the clients who wanted someone they could call or drop in on without advance warning because we have never allowed that.

In regard to losing any clients over rate increases, I don't recall that happening.  They recognize that they are paying for our knowledge and not just for filling in forms.  As our knowledge and experience grow, its value increases as well.  While I may sound egotistical here, I have always believed that any client who was too stupid to recognize that fact, I don't want to waste my time on.  There are plenty of clients out there who look at us CPAs as just clerks who fill in forms.  I won't work with people who hold that attitude.

From the very beginning, I would never quote fees or play the games with potential clients who were obviously basing their decision strictly on price.  Such people can't be loyal and will leave you for someone cheaper at the first opportunity. I have seen plenty of other CPAs make this critical mistake.  If your goal is to match the fees of big assembly line outfits (H&R Block, Jackson Hewitt, Liberty, et al), you will never be respected for your unique skill set.  There is an unflattering  term for that method of setting fees (whore's market).

If you are good at what you do, and have expanded your knowledge and skills, you shouldn't have any problem convincing your clients that you are worth more money that you were in previous years.

Good luck.  I hope this helps.

Kerry Kerstetter

Follow-Up:

 Hi,

Thanks for taking time out of your busy day to respond to my e-mail.  My husband has been on my case for years that my fees are to low.  I have been trying hard to raise them, but I guess I just lack the confidence...e-mails and information that you have provided help me to see the light...I have been a CPA for 20 years and consider myself good...so I definitely should be charging more....

 

Thanks again....

 

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/14/2006 08:21:00 PM Send this post: