Just had a potential client turn down a quote. Made it clear that my fees would be less than a third of the money I could save him - but still he sees it as too "expensive".
Being a one man band myself I ensure my fees are much lower than a high street accountant - but he still thinks they're too much! Do they realise that this is a profession and they need to pay at professional levels!
Oh well, good luck to him.
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Lucky escape
Better to find out now than to underestimate to get the work and then when you send a bill, you have to deal with all the grumbles.
Do You?
"Being a one man band myself I ensure my fees are much lower than a high street accountant - but he still thinks they're too much! Do they realise that this is a profession and they need to pay at professional levels!"
Do you realise that this is a profession? Charging fees much lower than a high street accountant!!
Lower fees?
I charge lower fees because I don't have the overheads. I'm more than happy with my fee structure.
Still earn enough to keep me happy and provide a comfortable life for the wife and kids. Ain't what this game is all about?
Yes Robin
No point in being greedy.
And u dont want clients like that, more hassle than they are worth.
Yes Robin that is what life is about.
But someone else may have lower overheads than you (no wife and kids to support) and charge even less and your prospective client can use them.
But why would you question there professional fees when admitting that you charge less than other firms.
I also work from home but do not charge more than high street firms and the same as large independant local firms because I value my professionalism.
A local cartel then
I am a one man band and I charge what I want and I will undercut high street accountants. I have also been undercut by high street accountants.
Just because I am a professional person it does not mean that I cannot compete with other professionals.
You on the other hand seem to have an informal cartel with your local competitors, are you clients aware of this?
Comment
"But someone else may have lower overheads than you (no wife and kids to support)"
I reproduce this comment as it came from someone who is posting on an accountant's website and who writes “I value my professionalism”.
Anyone who is providing “professional” accountancy services ought to be aware that personal expenditure is not an expense of a business, so the costs of wife and kids don’t really fall within the accepted definition of overheads when used by a “professional” accountant.
Honestly, some people make me despair - I wonder what their clients think of them.
roger rabbit
Despite the sneering
I thought a valid point was made, ie. the value of a fee is not dependent on the provider's cost structure.
-- Kind regards Andy
To OP
I had one of these the other day, quoted £1300 for 2 ltd co's, 2 payroll, 2 pers tax, which is well below my usual charging structure and client was gobsmacked and is now shopping around. They even complained that they'd had a cheap, poor quality accountant previously & ended up in liquidation, but still thought that was too high.
I then had a call from another prospect (1 company) who was more than happy with a £1,000 per month
arrangement.
Best just to write off your time and let them go elsewhere, and concentrate on clients that are worth it - you can't afford to be a busy fool.
Numbers game
I thought I would drop my 2 penies worth:
If you focus on being cheaper than competitors then you will get clients that value price as a main factor. Try to sell other features and if they don't buy into it and what to focus on price then I wouldn't want them. The value of the client diminishes as I know that the client will leave in a few years or sooner when they find something cheaper.
Nigel
Watch Your Language!
Why all this talk of "undercutting"?
It just confirms your belief that you are in a commodity market, and in a commodity market everybody expects a price war and if there isn't one they create one.
If you:-
Help the prospective client understand for themselves the full value of having you provide your serviceSet your fee at a small fraction of this valueCan extremely easily see that the work will still be highly profitable for you
then you avoid being a commodity. If you can't do all three then walk away as others have suggested.
Robin's original question was about the first of these three points. It is a skill that every professional needs, is easily taught and learned, and yet is still ridiculed in some quarters.
If the prospect still has concerns about value, you need to re-visit how great life will be for them once you've done your work, and also re-visit the unique personal contribution you bring to doing the job. If they still have concerns about your fee, then offer them a lower value, lower priced solution.
The aim is not to get the highest fee the client will stand. The aim is to get a fee that both parties are extremely satisfied with.
Why the word ignorant?
David's right, it seems that this potential new client doesn't perceive the value in YOU in particular providing this service in comparison with your competitors. Saving them money may not be enough if they are going through a review and seeking quotes from several people as they may expect as a norm that anyone else would be able to do the same, so the question is what have you done to educate them about why you are the best person in particular?
The other thing is really to listen to the messages that come back from people when they have a price objection .. try and gather as much information about what they mean by that statement... is it compared with another suitably qualified and experienced accountant, or a friend of a relative ie; are they comparing apples with apples by way of benefits and value? And sometimes, people will hide behind price as a reason to not take up your offer when it could be something different but price is the easiest thing to say. (I have known people turn down quotes on the basis of price when actually it was because parking was difficult but they felt silly saying that!)
-- www.maxxy.co.uk www.find-me-an-accountant.com Twitter:@maxinemaxxy
Tax does not have to be taxing! Self-assessment
I believe that since self-assessment has been introduced clients have been led to believe that they could do it themselves and that is isn't hard, so they believe that we charge a huge amount for something that is quite simple to do!
I live in a rural area which suffers from low fees, probably caused by a over supply of service and a low volume of businesses in the area. The ratio of one man bands who work from home effects the fee situation too.
I price the job without consulting the "accountancy nominal code" I do not compare with previous accountants charges. I tell the client that I do not need to know what they have been charged before as it could comprimise what I believe they should be receiving if I worked to a price, I describe what we could do for them and how we can help them, they choose what they want and I quote them for it. I have not competed for the work based on price, I could be cheaper but only the potential client would know that, If i lost a pitch I could ring them to find why.
Added value is the key!
I believe on offering my clients good value for money and have in the past been guilty of the "price war" quote with the view that any fee is a good fee. I have quickly discovered that these "rate tarts" will never value the service, but keep moving on to the next lowest fee quote.
I now provide a prospective client with a clear schedule of the services I offer and areas where I can add value, rather than being a bean-counting number cruncher. My fee structure is based on the estimated time-costs involved, although I do sometimes look at a percentage of the amount saved where the client is happy to do so. This usually exceeds my normal rates but carries a risk that it may not.
These clients are much more likely to stick around and recommend me to their contacts. Win-win!