Hourly Charge or Fixed Fees

Hourly Charge or Fixed Fees

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At the moment, my firm charge clients a fix fee for the preparation of their yearly accounts.However I notice that a lot of time is wasted on visits by clients for general queries and unproductive conversation.

I'm now degating on imposing a charge out rate for consultancy.Any advice ie pros and cons will be much appreciated.
Nigel

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By Abacjm
20th Apr 2002 03:13

Fees
Nigel,
Whatever you decide should be incorporated in a Letter of Engagement or an amendment thereto which is agreed upon by both parties.
As a general rule, no meeting with the client should be seen as "time-wasting" but as a fee opportunity. It is up to you to make sure that the client goes away happy in the knowledge that although he has paid/will be billed for the consultation, he has learned something that will better equip him to do more of your work for you, through better record-keeping, a fuller understanding of Accountancy/tax/tax planning or whatever.
If the visits beceome too numerous and do become uneconomic or of nuisance value, it is up to you to steer the conversation back to business when it drifts to discussing Beckhams "My Left Foot", or the reasons why women need a hair-do every Friday!

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By neileg
22nd Apr 2002 09:23

Mixed approach
I used to adopt a mixed approach. After completeing the accounts and tax work for a year, I wrote to clients telling them what the next bill would be if there was the same amount of work involved. This usually prepared the client so that there was less surprise when the bill hit the mat. It sometimes provoked a constructive discussion on how the fee could be reduced by improving record keeping.

I presume you want your clients to feel they can get your advice at any time, but not for free. It helps to bill the client frequently, so that individual bills are kept small, and bill quickly so that there is a clear link between the work done and the charge. Keep the bill for the fixed fee work seperate.

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