Nice people do not succeed?

I had what I thought was a very low fee potential client meeting last week. The work involved preparing a simple tax return. About an hour's work at the most. The meeting was with retired husband and wife. The tax return to be prepared was for the wife.

I found the couple to be pleasant people. I listened to their needs and answered their questions. They had a letter from HMRC Compliance Unit that in my opinion was dealt well by them. Further, the Compliance Unit accepted their explanations and the wife ended up with minimum penalties.

When it came to the question of fees, I told them that I need to think about this and I will email them a quotation.

After they left, I thought further and concluded that I really do not want just tax return jobs. There is just not enough in it for me. I then said to myself, rather than telling them I am not interested I will quote them a high fee. I thought they would find someone else.

I was surprised to get a response back from them today saying that they would like to go ahead. The fee I had quoted was £400+VAT.

I do not know why I feel guilty now. This is business and I should not feel guilty. I quoted a fee and they accepted. That should be the end of matter. I keep thinking about this and why I am letting my emotions come in the way of business? I am tempted to reduce the fee but this just does make business sense.

At times like this, I question myself whether I made of the right stuff to be in business? You do not become a success by being nice.

Comments
petersaxton's picture

Charge £100 + VAT    3 thanks

petersaxton | | Permalink

I would charge £100 + VAT and not feel guilty

Be honest    1 thanks

Fidget | | Permalink

Charge a reasonable fee or be honest and tell them you dont want the appointment.

If doesnt sound as though you are happy to charge an unrealistic fee to people, and I wouldnt be happy either.

The only people who admire greed are other greedy people. It isn't good business to take advantage of your more naive and trusting customers and it could do long term damage to your reputation. The greedy accountants may gain in the short term but will their clients stay with them long term.

SteveOH's picture

Nice people DO succeed    1 thanks

SteveOH | | Permalink

In a sense, you've misled your client because they probably think that £400 is the going rate. Or maybe they think that there is a lot of work involved. You obviously have a sense of guilt otherwise you wouldn't be asking this question. And it's to your credit that you do feel guilty.

I think the answer is simple. Do the work and then present them with a bill for £100. I guarantee that you will feel a lot better; they certainly will.

Maybe it's worth it for them    1 thanks

hazeljohnson | | Permalink

Maybe it's worth it for them to have peace of mind that the return is being dealt with and they don't have to deal with HMRC?

 

petersaxton's picture

Why is it worth it?    1 thanks

petersaxton | | Permalink

When other local accountants will do it for £100?

BillyBob's picture

Worth?    1 thanks

BillyBob | | Permalink

It could be worth £1,000 to them to have everything dealt with and they might be thinking that they're being massively undercharged.... What's expensive to one can be cheap to another. And FT might give them something that a £100er wouldn't - even if it's just a feeling of confidence. Who knows that they haven't seen someone cheaper and decided that FT is worth more? So many variables and we don't know the answers...

If you feel bad after doing it (and assuming that there aren't complications - bearing in mind they've obviously had some problems before) then why not say that it took less time than you'd anticipated and you've reduced their fee accordingly? That way your conscience is clear, they pay less and everyone is happy.

petersaxton's picture

Be fair    1 thanks

petersaxton | | Permalink

Charge them £100 and dont try to justify it. You know a fair price and no amount of waffle will change it.

Red Leader's picture

From £400 to £100 in one day    2 thanks

Red Leader | | Permalink

FT: Be careful about billing £100 after you've quoted £400. At the very least, it looks like you don't know what you're doing when you quote. It would appear very haphazard. I don't know how much you should charge. Might the client be high maintenance, records disorganised, lots of ad hoc queries during the year, is there some technically tricky area to deal with? That said, I see that in your OP you say an hour's work. Can you tell us something more about the work involved in the return? Maybe your hour is an under-estimate.

You suggest that you are not interested in jobs that are just tax returns. If you can charge £400 for an hour's work, it sounds like you need more of them, not less!

FirstTab's picture

Thanks

FirstTab | | Permalink

Thanks for the comments. I will think about this and post here what I will do.

Red Leader - You gave me a lot to think about - thanks.

RedTapeDoc's picture

Overcharging customers    1 thanks

RedTapeDoc | | Permalink

Overcharging customers can drastically affect your reputation, if the customers find out ....  a bad reputation overpowers any good reputation factors. 

 

 

Monty Python's picture

Free

Monty Python | | Permalink

 

We  wouldn't charge for a simple tax return for someone who is retired. However we don't take "walk ins" and these sort of jobs when they do occur are generally for a existing client's parents / elderly aunt etc.

From what you say I'm guessing that this job consists of a couple of pensions, a couple of savings accounts, and a few shares ?  As we would be doing it for a clients relative I wouldnt dream of charging.  In the case of someone not related to an existing client I agree with others that maybe £100 would be reasonable, although to be honest when its what you describe as a nice couple I's probably not bother charging and let them buy me a pint sometime.

It might not fill your bank, but it does make you feel better if occasionally you do a bit for free.

"That's business"

chatman | | Permalink

FirstTab wrote:
This is business and I should not feel guilty

Why not? "that's business" seems to be an excuse for all sorts of disgusting behaviour (not necessarily yours, although I do not think you should have done what you did). Just because it is business, does not make all things excusable. What would you think if someone said "well I appreciate someone got hurt, but that's paedophilia" ?

worth

david5541 | | Permalink

BillyBob wrote:

 

its about what the prospective client wants to pay for

so often corner shop "tax shops" who may offer something cut price will not give any value with what they offer.

 

sole practitioner's "punt" is a gamble (after all winning business in this tough climate is about being a punter).

 

i bet sole practitioner has tax software; and staff; who do alot more than tax returns..and PII

 

its discraceful when you cant quote a good fee as a sole practitioner. sole practioners have much higher fixed costs(as a proportion) than the top 20 who may charge £400...

 

It could be worth £1,000 to them to have everything dealt with and they might be thinking that they're being massively undercharged.... What's expensive to one can be cheap to another. And FT might give them something that a £100er wouldn't - even if it's just a feeling of confidence. Who knows that they haven't seen someone cheaper and decided that FT is worth more? So many variables and we don't know the answers...

If you feel bad after doing it (and assuming that there aren't complications - bearing in mind they've obviously had some problems before) then why not say that it took less time than you'd anticipated and you've reduced their fee accordingly? That way your conscience is clear, they pay less and everyone is happy.

Tony S's picture

Why don’t you refer them to someone else?    1 thanks

Tony S | | Permalink

 

If you really don’t want to bother just doing tax returns why don’t you pass the client on to someone who does?

I’m sure you must know someone who would happily do this for £100ish. You can sort of come clean to the clients by saying that you don’t normally take on just tax return jobs as it is generally not value for money to the client. Your pal down the street however does loads of simple tax returns and could therefore do it a lot cheaper than you. 

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