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Ah I love this topic and so glad you addressed the part about really defining the scope of the initial offering.
Fixed fees are great for all involved, as long as you aren't lazy and just let the work pile up beyond the scope of the original offering.
Instituting a review period doesn't hurt either. Around their year end is a good idea. Check that their monthly fee still reflects the hours you are putting in.
I'm lucky in that we don't have any of these issues so I don't need to change from chargeable time basis, quarterly bills for VAT and payroll work and annual bills sent with accounts for approval. However, I've often wondered about fixed fees and how they work in practice.
I've a handful of clients who I know would be on the phone weekly and email constantly if I offered a fixed fee. Time cost billing controls that. How do you manage these sort of clients or do you not have them? Are the fixed fee terms very restricted in terms of these "extras".
I am 100% fixed price for every client, of which there are 145. In 7 years I have only ever felt 1 client abused the free phone calls.
Conversely clients feel free to raise issues at an early stage, this means I can nail down little issues before they grow into big ones. Many clients raise this aspect, that they raise issues with me they did not with previous accountants due to the notion that the meter would be running and the phone call lead to a bill.
Quite often these calls lead on to extra work and fee variations.
I write really tight letters of engagement. So for example if a client says they are going to be giving me view access to download statements, and have good separation between business and personal, that is in the letter of engagement - on page 1 well before all the tedious legal drivel.
It often happens that clients indulge in mission creep, of course. At that stage, before undertaking the extra work, you raise a fee variation. It either gets accepted or not. If not, I won't be doing the work. If that leads to any sort of kickback then I walk.
I decide who I want as a client. I can honestly say that where I am now there is not one single client on my books I dislike, not one single one where my heart sinks when I get a phone call or e-mail from them.
In my first few years I had quite a lot of clients I felt that way about. Basically I needed the business back then and now I don't.