Clients expect their professionals to be able to discuss their fees but are usually just as scared to ask about them as you are to bring them up. As their accounting professional, it’s your duty to articulate your fees to your clients. Getting comfortable and confident about discussing fees increases the value and perception of value for your services. It creates loyal customers and is a landmark of exceptional client service. Discussing fees is all about setting the right expectations. Oftentimes, miscommunication happens when clients don’t understand what you are doing for them or what’s included in your scope of work. Here are a few best practices for discussing fees with your clients.
Initiate the conversation.
Don’t wait for your clients to bring it up; they may never do it. It’s easier to control the conversation when you lead. Consider asking your client for a meeting to discuss your business and services. If you want to increase fees, e.g. “Joe, we have been doing your return for 10 years. Over the last year, your work has become a lot more complex. Last year, you filed in X new states. Unfortunately, our fees haven’t commiserated with the additional complexity and work. Beginning this year, we will need to start charging you for that work. It’s going to be $x.”
Describe the services you will provide.
This is often where CPAs fall short in talking about fees. Typically, clients have no idea what you do for them, therefore, you must educate them. You need to be very specific about the work that will be performed, the format in which information will be received and the limitations of your scope.
Present your fees with clarity.
It’s not enough to tell clients that you will provide their audit or tax return. Define your scope of services. For example, “We will prepare your 2017 tax return for IL, DC and CO. Included will be the preparation of a Schedule C, D, E and F. Our services will also include a fall tax planning meeting and projections for your year-end payments and charitable giving.” This tells a client exactly what they are getting. You could take it a step further to define the due dates of materials and price out the timing for preparation, based on the time of year and whether an extension is filed.
Write it down.
Put everything in writing. Take the time to build your scope of work into your engagement letter or send a separate email to detail it out. It can take time to process this information, but this step is critical. While we also recommend a verbal conversation, writing it down helps with follow-up and protects you against liability.
Don’t be defensive.
When clients ask about fees or question them, try not to take it personally. It’s not about you. It’s their lack of understanding about what goes into your fees. Use their questions as an opportunity to further clarify what goes into your services and what you are providing to them.
At the end of the day, fees are all about self-worth. You must have confidence that you are worth your fees. If you don’t, neither will your clients. Don’t be afraid to ask for what you are worth. You have the power to create high values of perception based on what you charge.