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Am I the most stupid accountant in britain today?

Am I the most stupid accountant in britain today?

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CRM calamityPost with the Most 2008

I have recently taken on a new client and agreed a fee of £2,500 + VAT. They are extremely happy with this fee, as their last accountant was ripping them off (this would be putting it mildly).
However, having now done most of the work I realise that I have overestimated slightly, and consider that £2,100 + VAT would be a fairer fee. I will be seeing them tomorrow and intend to reduce the fees.
I tend to take a longer view of things and don't believe in making a quick buck in the short term.
My question is: am i the most stupid accountant in britain today (ie voluntarily giving away £400) or am I too generous for my own good?
how many would behave in a similar fashion?

anon

Replies (62)

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By skylarking
18th Jan 2008 16:01

Old adage
I was taught a very long time ago . . .
'A client remembers the service long after they have forgotten the price'. If you have provided a decent service you are just flushing money down the toilet.

(Maureen, a gentleman always pays)

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By maureenhaynes
18th Jan 2008 15:40

Being Fair is not stupid
You must believe your charge-out rates to be accurate - or your would be re-thinking rather than posing the question - and in this case your assessment of the work required was higher than it took. Great - let your client have the benefit of that. this year. She is likely to have a long enough memory to cope with the possible future occasion when you have to spend a great deal more time on the job and charge accordingly. However much she was being ripped off before is not relevant - you are getting a fair price for the work done. You can also feel good about treating your clients as you would wish to be treated.

ps taking her out for a slap-up meal might be enjoyable but they always know who pays.

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By Anonymous
18th Jan 2008 15:38

Andy
Would you be able to claim the £400 as "client entertaining"???

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By Anonymous
18th Jan 2008 15:35

What if.....
more work had been required and your time costs amounted to £2,900. Would you charge for the extra time? The client is likely to say that a fixed fee of £2,500 was agreed and that is what they will pay.

A fixed fee is exactly that - fixed.

I would look upon it as making a little more profit on this job than you anticipated. This won't always be the case!

The potential problem with recommendations due ot the fee redcution is other clients may come to you seeking a similar fee but where a lot more work may be required.

However, bottom line is you have to do what you feel comfortable with.

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By Anonymous
18th Jan 2008 15:05

A different approach
Charge her what she expects to pay, no what she is contractually obliged to pay, and with your virtual £400.00 'bonus' take her out to dinner at a decent restaurant. That's what you really want to happen, right?

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By AnonymousUser
18th Jan 2008 15:03

Or..
How have you decided that £2,100 is fairer? Based on random charge out rates? Based on how long it took you? Based on what you charge other clients?

Perhaps the £2,500 is the fair price and your other fees are too low?

The client has clearly decided that £2,500 fairly represents the value of the service to them. Why shouldn't you charge them that? Who cares if it may have 'cost' you less than you expected, that's your reward for doing the job efficiently!

Why don't you ask the client? 'Now the work has been completed are you still happy with our original quote?' They're the ones who know if the price is fair or not.

Good service, not £400 is going to get you the respect of the client.

Accountants are allowed to make a profit!

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By Anonymous
18th Jan 2008 14:23

I don't think stupid
You would be quite justified to charge the full quote. However you have to decide if offering another discount will get you this woman's trust and a lot of recommendations or whether she will insist on this lower fee forever.

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By Jason Dormer
18th Jan 2008 13:32

Im with you
I would play the long game and reduce the fee. In addition to how you feel personally you can always look at the £400 as a marketing investment, this client will tell everyone what you have done for her.

I also do not see why this client should get charged for other clients overuse of your time, you need to bill them more, not her.

If, around the corner, extra time and work is required you could always reinstate the original price or exceed it as you have gained the clients complete trust, and also satisfied your own conscience.

Or maybe I am stupid as well.

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By Anonymous
18th Jan 2008 12:18

Value
If the client is getting value and happy with the fee as quoted, charge the fee.

If you sell goods in a shop and you make a cost saving on the purchase, you would only lower your prices as part of a marketing campaign - ie you wouldn't autocatically reduce them.

If you're that bothered about it, keep it as a contingency. As has been mentioned, you don't know what's round the corner.

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By Anonymous
18th Jan 2008 11:59

Fixed price
I agree fees in advance with clients. They're happy and I'm happy knowing that it's a fair price.

However, when I come to actually do the job, some complications arise, but other jobs are simple. What you don't know at the initial meeting is that they could require a lot of attention seeking during the year eg calls, bank meetings etc. You don't know until they ask/ring/write.

I have one client who I spend about an hour a week on (nice bloke - likes to chew the fat on everything), but I couldn't charge him £5000. But I do various other jobs which take literally 3 hours who get billed £1000 each.

So, I would still invoice for £2500 and enjoy the extra £400 until the time another job crops up that you lose out on.

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By AnonymousUser
18th Jan 2008 11:45

What about next year?
But what if you charge £2,100 this year and next year there turns out to be some unexpected complication requiring extra work? Your client's expectations will be based on this year's price, not on what the rip-off-merchant used to charge him. A long view might be to charge the agreed £2,500 this year and hold that price for a year ot two till you have a feel for the pattern of his work over a longer period.

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By Anonymous
18th Jan 2008 11:38

.
It’s up to you.

As you agreed £2,500 then that is the fees, however, if the right fee should be £2,100 then I have to be honest that is what I would charge, the relationship with client is a marathon not a sprint, therefore take the long term view.

Jason
Holden Associates
A Blog for Small Business

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