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Fee reduction due to coronavirus

I'm reducing monthly fees by 50%

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https://www.accountingweb.co.uk/any-answers/fee-reduction-due-to-covid-19

I had a few mainly negative responses but I'm doing it anyway. I'm not going to recharge the amounts later in the year.

Trying to help my clients get through this. I think this is the most professional approach; think of your clients not the money.

Replies (14)

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By wilcoskip
23rd Mar 2020 20:18

I am thinking of my clients, but I also need to think of my family, staff, suppliers etc.
Hence our prices remain unchanged, but we won’t be charging extra for helping people deal with new government relief measures etc. That’s on us.

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By Tim Vane
23rd Mar 2020 21:09

I too am thinking of my clients. They will need more information, more advice and more help dealing with HMRC and other parties including lenders, landlords and local government than ever before.

We will be expected to help them as much as we can and as a firm we will, but frankly, we offer a service and this service comes at a price. I’m not going to undervalue myself or my staff when we are working harder than ever. Our prices will certainly not be going down.

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JCACE
By jcace
23rd Mar 2020 21:36

Well done mjshort.

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boxfile
By spilly
23rd Mar 2020 21:54

Payment holiday yes, fee reduction no. I can see that some clients will have significantly less bookkeeping requirements though, so will adjust for that if and when.

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By Manchester_man
24th Mar 2020 01:37

I too am not going to be able to blanket reduce fees. Will be judged on a case by case basis. We will still be having to do the year end accounts / corp tax, submit vat returns and then advise on deferred payment due dates, plus a lot more work required RE payrolls at the moment and advising on the government announcements etc.

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By SXGuy
24th Mar 2020 07:40

Payment holidays. Extended periods to repay fees. Free advice to help all I can. But my fee will remain the same.

I still need to feed my family and no ones going to offer me a discount. I can already see my income dropping as a result of this so I'm not about to make it worse.

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My photo
By Matrix
24th Mar 2020 08:08

Are your clients cancelling their Sky and mobile phone contracts or just non essential services like accounting? If we are expected to complete forms to reclaim thousands of pounds for clients and are seen as an essential service, then you can do what you want but I am not working for free.

And none of my clients have asked me to.

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By EOAKS
24th Mar 2020 09:04

I too have agonised over this question and came to same conclusion as most here. I'm not a charity and I've done the work at a fair fee.

As Tim says we shouldnt undervalue ourselves. You wont get a plumber or solicitor reducing their fees. They do know that you've done the work.

Unfortunately I have a number of clients who are invoiced on an annual basis (for historical reasons.) I've issued invoices for past years work (some even last week) and on the ones I think might not pay due to the circumstance (or have already rung up crying down the phone) I've already offered payment by instalments.

Call me hard but I have also issued interim statements to those who I can see will go under. Doing so will get me on the creditors list on liquidation.

I'm going to take this opportunity to get as many as possible on monthly DD and tighten up my procedures so my plan of action is going to be:

1. I will wait 6 weeks from issue and then if they have not paid and I didnt offer payment by instalments on the current outstanding bill originally then I will do plus 10% discount on next years if they go monthly DD on future bills. Say unless I do extra work I'll charge the same as last year (or give an estimate). If they have paid by those 6 weeks then I'll again offer 10% discount on the next invoice if they go on DD monthly with same offer of keeping bill same etc etc

3. Review all past clients who have been invoiced before this virus hit and offer 10% discount if go on DD (its only fair.. its not their fault I invoiced pre virus and and they paid) - again same offer of keeping bill the same etc

3. Send emails to all CIS clients next week telling to get their stuff to me asap after 6 April to get their refunds (I get their refunds into my client account so I can take my fees).

Also remind all POA clients clients that in Dec the tax payment amount will be higher this year and although the govt are being kind with the July deferment many will spent it forgetting that its a deferment rather than a cancellation of payment.

Next year is the year that its going to hit us. I already have clients deregistering for VAT which means reduced fees for me next year (if they havent gone to the wall anyway by then)

I also predict that the software companies (Quickbooks etc) will do a hard sell and push that 'you can do it yourself' - again I've had a couple of clients already saying that as they were deregistering they wont me as it will be easy and they will do it themselves.

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Replying to EOAKS:
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By SXGuy
31st Mar 2020 10:55

What had been your expirence with telling clients about July's poa? Most I've told have said well I don't want a bigger bill in Jan I may as well pay it.

I guess its only working for those who don't have the money. Not really helping everyone.

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By Cheshire
24th Mar 2020 09:14

I considered this over the weekend and came to the conclusion that I would sit it out at least until the end of March and re-assess based on what clients are doing/able to do/want me to do.

Ive had some actively phone to re-assure me that they will continue to pay my fees as they understand I am a one woman business.

One asking me to take on some extra work and he is prepared to pay an hourly rate (fixed fee for other) as it frees him to do more critical stuff.

Then this today 'Can I also ask you to work as little as possible please?! The truth is I can't afford you, but at the same time need your services.''

I cannot furlough myself. I work from home so no help there. Have some cash in the business that will keep me going for a while and can live fairly frugally if I need to. Providing lots of help for nothing at the moment but for the rest am looking for payment. But will just keep re-assessing on a case by case basis.

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By ComanCo
24th Mar 2020 10:35

I would be inclined to see just what is involved in making claims as part of the government assistance package. The mechanism has not yet been fully clarified and therefore it is too early to call.

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Red Leader
By Red Leader
24th Mar 2020 10:46

Give longer credit rather than discount.

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blue sheep
By NH
24th Mar 2020 13:19

You also have to consider the longer term - you are going to be an essential service for your clients for the next 10 months and beyond, in that time many of them will have severe cashflow problems and will not be able to pay your fees at all. If you do not build up sufficient resources now and have to cease trading yourself you will be no help to anyone.
IMO you have jumped too early

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By Cardigan
31st Mar 2020 14:20

I'm not absolutely sure what to do either. At the moment, I am waiting on clients to approach me and will deal with them on a case by case basis. I have been working non stop the past few weeks on non-billable work, so I don't want to make the situation worse.

I know a few clients have temporarily closed but I haven't offered them a payment holiday, even if my conscience did twinge a bit. I have salaries, rent and bills to pay too. However, if they ask, I will give them a payment holiday.

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