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Have any clients asked you to reduce your fees?

Have any clients asked you to reduce your fees?

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At various events in recent weeks the same theme has cropped up several times: “Clients are asking us to reduce our fees and do more work for less.”

At the recent CCH Conference, for example, Philip Woodgate from Goodman Jones commented: “We’re getting lots of pressure on price, just because our clients’ margins are going down. Clients are coming forward and asking for fee reductions, but they want to continue with the firm.”

The firm’s response was to review many of its processes and wherever possible move clients on to Twinfield cloud accounting software.

I also heard a similar story at the Accountex event in June from Mark Hil of Woking-based Ashfield Accounting. He’s using BankLink to help reduce fees and says pulling in bookkeeping data from clients’ bank accounts “helps reduce their fees” and supports both client retention and acquisition.

Have any other AccountingWEB members experienced similar pressure from clients to reduce your fees? And if so, what have you done about it?

We’ve picked up a lot of anecdotal evidence from comments like these and previous posts on AccountingWEB, such as the member who posted in January that “80% of clients are constantly asking for reduced fees and taking 60+ days to pay”.

In the circumstances, we thought it might be helpful to collect a bit of data to assess how widespread this trend might be and discuss how firms are dealing with it. Are you likely to follow the examples of Goodman Jones and Ashfield Accounting and use technology to make savings in-house, or are their other things you can do to preserve your margins?

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11th Jul 2013 13:16

I disagree

There is nothing wrong with your business model if you are earning 40k for a  full weeks work and if you think it is the same all around the country then you don,t know the country very well. 

If you want to live in the South of England then you need to earn a lot more to have a good lifestyle.  You get far much for your money in other parts of the country hence businesses pay in accordance to  local environment.    

It is irrelevant whether is an accountants firm or not as we have to live in the real world.  There are plenty of professions that work harder then us and who also worked harder then us to get their exams. 

I have to say I find this put down of a business model quite insulting.  For example my husband  employs 14 people and does not earn 60K he is in 6th year of business and it will continue to organically grow,  yet he loves his job and is happier then he ever was when he worked for IBM on a large salary while they systematically destroyed employees confidence.   He has 4 degrees and is Dr of Science. 

Please stop making judgements on what is a good business model.  A good business model is when it suits everyone, the employees like coming to work and you input into your local community.

   If you want to earn 60K then I have no problem with that but money does not buy you happiness and nor does it make a business model perfect.  Of course money helps but it is not everything.  General Happiness comes way ahead of earning 60K. 

 

It is perfectly normal for clients to question fees.  I ask do you just purchase everything  without asking the price and judging the value.  If cuts need to made then a business will look at everyone involved in that business.

 

Sarah Douglas Douglas Accountancy and Bookkeeping Services Glasgow 

 

 

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11th Jul 2013 13:14

@sarah

I'll assume your post was disagreeing with my post?

In which case you need to read it properly. I wasn't talking about any business I was specifically referring to accountancy practices.

Yes I understand that not everyone is driven to earn as much money as possible.

But and a big but, if you are a qualified accountant working in your own practice there is something very wrong if you're working flat out for less than £40k a year.

The 'busy fools' quote springs to mind.

 

 

 

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11th Jul 2013 13:23

@Kent 

@Kent 

I did put in a comment about accountants practices as I was editing it and I appreciate you may have been posting at the same time. 

Busy fools quote springs to mind.   If you are working Flat out  and more then 37.5 hours then your a fool to your own body.  I have done it and your body will pay eventually.  

If you are working FLAT OUT. and putting loads of extra hours in then yes you should earn more then 40k as you giving up on your family time or your own precious time.  

 

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11th Jul 2013 13:39

It's not often I disagree with you, KA

On this occasion I do disagree.

There is a big difference between being a busy fool, and not earning stack of money. It all depends on the type of clients you like to have, and I would choose lower fees (easy work & nice clients) over high fees and PITA clients who think they own you.

If you can get high fees from clients who are nice to deal with then you have the best of both worlds.

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to andy.partridge
11th Jul 2013 16:48

I agree

ShirleyM wrote:

There is a big difference between being a busy fool, and not earning stack of money. It all depends on the type of clients you like to have, and I would choose lower fees (easy work & nice clients) over high fees and PITA clients who think they own you.

Perhaps I didn't express it very well. I'd describe a busy fool as one working all hours for far less he/she should be earning, given their experience and qualifications.

The example you make of someone choosing to work less and being selective in only taking on clients they like and work they enjoy is a long way from the 'busy fool'.

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By Jimess
11th Jul 2013 13:45

Reducing fees

In answer to the original post I have not had clients asking me to reduce their fees, but I have lost a couple of clients because they have been quoted fees of £500-£600 for the whole shebang of accounts, payroll, tax returns, p11d's hand holding, bookkeeping and generally sorting them out when things don't balance.  When I started in practice I was given the advice "set your fees at a level you could maintain if you had staff and offices to maintain" and that is what I did then and that is what I do now.  I cannot compete with £500-£600 for such a service and will not drop my quality standards.  Over the last few years I have reduced costs down to a level where I cannot cut costs any more and introduced more efficient working practices to help us carry out the work more efficiently, but without affecting the quality of service the clients get.  There is a level below which I will not drop my fees if I do have to go below that level then I may as well sell up and get a job stacking shelves at the local supermarket.  I agree with an earlier posting - we are not just selling time, we are selling expertise, knowledge, practices and procedures.  We have bought that knowledge and spent years honing the expertise.  We are service providers not processing monkeys and as long as I can sell that service for a price that suits both the client and me then I will be in business. What we are finding more recently is clients coming to us because the £500 all in price they got last year has suddenly shot up to £1,500 this year, or the service was so appalling they have incurred huge sums of money in penalties.  No great gains for the £500 all in brigade there.

 

 

 

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12th Jul 2013 10:17

@ Jimess

There is a level below which I will not drop my fees if I do have to go below that level then I may as well sell up and get a job stacking shelves at the local supermarket.

Oh really!! Lets say, for sake of argument, you competed with the £600 all in brigade .... your hourly rate might plummate to £20 - £25 per hour I'd guess. Pretty poor for a qualified accountant I agree ... still 4 times what you will get at Asda. Sometimes we really have to remember that our nice £1,000 job that we despatch in a couple of days is a month's pay at a Supermarket.

I'm not really meaning to be holier than though ... I t/o £65k p/a and my wife is also a professional, so we are very comfortably off compared with the vast majority but I do get annoyed when people make the 'shelf stacking' comment without actually working out how little money is involved.

 

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By Jimess
to Paul D Utherone
15th Jul 2013 10:24

@ Steve Holloway

Steve Holloway wrote:

There is a level below which I will not drop my fees if I do have to go below that level then I may as well sell up and get a job stacking shelves at the local supermarket.

Oh really!! Lets say, for sake of argument, you competed with the £600 all in brigade .... your hourly rate might plummate to £20 - £25 per hour I'd guess. Pretty poor for a qualified accountant I agree ... still 4 times what you will get at Asda. Sometimes we really have to remember that our nice £1,000 job that we despatch in a couple of days is a month's pay at a Supermarket.

I'm not really meaning to be holier than though ... I t/o £65k p/a and my wife is also a professional, so we are very comfortably off compared with the vast majority but I do get annoyed when people make the 'shelf stacking' comment without actually working out how little money is involved.

 

I know how much shelf stackers earn - I did it for several months between being made redundant and setting up my business.  What you are forgetting is that the £1k fee that you suggest does not all come to me or my household - it covers staff costs, stationery, software, equipment, premises, CPD, staff training, health and safety, annual professional registration, PI, business insurance, not to mention taxes - do I need to go on?  If I was getting the £1,000 fee, that you suggest, in my pocket all found then yes I agree it would be a significant amount higher than I could earn stacking shelves at Tesco or Asda - but at least what I would get doing that would be the total contribution to my household, I would not have the business running costs to take out or the worry that goes with it.  I would also know that for the hours I work I would get paid for those hours on the same day every week, without having to wait for the customer to pay you.  I don't get paid for admin time, but an employee expects to be paid for it.  Employees are generally provided with training by their employers - I have to pay for my CPD.  Employees do not have to provide for the varying fortunes of being self employed - they are protected by law to earn a minimum amount per hour, by law they must only work a certain number of hours per week, and are able to take a minimum amount of holiday per year - we are not - if there is little or no money in the business to be had, then we have to take a back seat and draw on personal resources until everyone else is paid, if there is work to be done and deadlines to meet, we are the ones who have to meet that challenge or we may be leaving ourselves open to financial claims and spoiled reputation, if there is little or no work - we are the ones with the resulting issues.  We take the risk so we should expect to be paid accordingly. 

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12th Jul 2013 10:29

We are no different to most other businesses

What an interesting thread and, I'm guessing, far more than John bargained for when he asked the question.

I also think the tone and comments would have been significantly different 2-3 years back, things change so quickly and there have been many in our industry who have been persuaded that, just because they have letters after their name, work & train hard, the world does not owe them a living, we are just running a business.

Whatever the motivation, it is personal choice to go into accountancy, whether you go for exams or not, and if you come out the other end and find that you are not reaping the rewards you hoped for or that, for most of the time, all you do is fill out forms & do numbers, 90%-100% of which could be done by a punter without your help, then that's life. Things were a lot different when I started out and I certainly wouldn't go into accountancy if I was starting ot today.

I've experienced both ends of the earnings scale via all four lanes of the motorway, and know where I have been most content and happy with life, my only regret is not having tried constructive inertia/reduction 10 years ago.  We are all different but, for me, it's been a case of deciding what is enough and sticking there, taking back some control.

The above comments illustrate how impossible it is to compare models and fee rates but, being accountants, whether it's £40K or £1,500,we do so like to stick a number in a cell as it means we, and our spreadsheet, can then rely on it

Expanding John's question, is there is pressure from outside forcing us to think the unthinkable and reduce the numbers we stuck in the cells or do we get our heads out the spreadsheet, anticipate what's going to happen and reduce them ourselves?

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12th Jul 2013 10:44

Trouble is

The trouble is that the more accountants are content to work for less, the more accountants will be forced to work for less as the market rate adjusts. The Asda check-out scenario is a long way off, but it slowly edges closer.

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12th Jul 2013 10:47

@Glennzy

By expanding the argument about selling time to a daily rate (or in my case an annual rate) all you are doing is pointing out that there are 24 hours in a day or 365 days in a year and we have a certain amount of work to do in that time scale.

It doesn't follow that I, or my painter/decorator, think in terms of time rates when we are assessing the work to be done, there are just too many other paramaters to restrict it to two of them (Time & £@). 

S/he may very well look at my room and say "£300 AND it will take me 2 days" then go next door (walking past their 2 BMWs and kids in private school uniforms) and say "£500 AND it will take me a day & a half".

Honestly we are not really selling, and clients are not buying, time (well mine arent) they are buying what I can do in the time, which marches on whether I'm working or not.

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12th Jul 2013 10:49

@andy

Why should I bust a gut to overcharge my clients just to keep our industry artificially safe?

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to lionofludesch
12th Jul 2013 11:21

You shouldn't

Paul Scholes wrote:

Why should I bust a gut to overcharge my clients just to keep our industry artificially safe?

But Paul, doesn't 'overcharging' mean charging more than you agreed or for something you haven't done?

Also I don't understand why you should have to 'bust a gut' to charge what you are worth.

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12th Jul 2013 11:48

Selling time?

"Honestly we are not really selling, and clients are not buying, time (well mine arent) they are buying what I can do in the time, which marches on whether I'm working or not."

I don't think anybody thinks that we are selling time because to suggest we are selling time is a total nonsense. People are buying what we can do for them and we are giving them a price for it. That price will most likely be more than the cost of rent, rates, employees, equipment, software, etc. The biggest component of cost is most likely to be the cost of employees or the alternative cost of the partner. This is where the importance of time becomes relevant. If the time spent on a job is a lot more than another job then most likely we would want to charge a lot more. It would certainly be unlikely that we would charge less. To confirm my views. This isn't selling time.  This is about making a profit from the work done.

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12th Jul 2013 21:33

@paul
Reading between the lines are you not saying that you used to earn more, but now choose to work less, which is fair enough.

But in doing so are you not benefiting from a lifetimes work and buying your house when they were considerably cheaper.

Perhaps there are accountants who need the 70'K you referred to just to pay the mortgage because they bought their. House 10 yrs after you.

It seems what people are saying is not only should todays 20 somethings in accountancy have higher living costs, they should also expect to earn less. A true double whammy.

I believe the overiding factor in market prices for accountancy services nowadays is not technology or anything similar, but what people are prepared to take home. If everyone who took home 40K demanded 70K, prices would go up.

Fortunately I'm not just starting out, but neither am I at the stage in life where I can afford to rest on my laurels. It appears though I must be one of the few people who entered the profession in order to earn decent bunce. I can't believe that !

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12th Jul 2013 22:17

Is that the overriding reason?

" It appears though I must be one of the few people who entered the profession in order to earn decent bunce. I can't believe that !"

I used to work in an office at Yorkshire Electricity Board. It was a dead end job. People stayed there because they were paid better than most office jobs in Hull and they had a lot less work to do. I was very frustrated. The only people who had a job I was impressed with was the one qualified accountant on the floor who was in charge of about 30 people and I think the boss of the East Riding Area who was a qualified accountant too. I only met the main boss in the lift. I chatted to the other accountant sometimes and he seemed very knowledgeable and had a totally different attitude to the rest of the workers. He seemed to know a lot about business and I wanted to know more. It seemed to me that the best way to learn about business was to become an accountant. I didn't think about who earned more - it was the knowledge I was interested in.

I think people who enter a profession predominantly to earn a lot of money have a narrow view of life. There is so much more to accounting and business - not to mention life.

 

 

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12th Jul 2013 22:23

Peter ...

You worked for the Yorkshire Electricity Board, and my very first job was in the payroll dept. of the North Eastern Gas Board.

It was manual in those days, and all the payslips were completed by hand.

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to lionofludesch
13th Jul 2013 06:34

Maybe had computers

ShirleyM wrote:

You worked for the Yorkshire Electricity Board, and my very first job was in the payroll dept. of the North Eastern Gas Board.

It was manual in those days, and all the payslips were completed by hand.

I'm not sure but I think they used computers. Well maybe a big one in a separate room. There would be books of printouts and you had to find things in the order they were filed and there was no interrogation of the computer.

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13th Jul 2013 00:49

Have a good weekend

Just before signing off a few loose ends:

Peter - you say "I don't think anybody thinks that we are selling time because to suggest we are selling time is a total nonsense" I don't wish to be rude but you are butting into my chat with Glennzy who, on Wednesday, said precisely that...however I managed to avoid saying that s/he was talking nonsense.  So best I leave you to carry on the chat.

It's too late in the day to get into the old arguments with you on time & fees but, just to correct you on your assumption above, I could give you many examples where we took much longer doing job A than job B but charged less, sometimes it makes complete sense.

Andy - I'm not sure if you deliberately misunderstood what I said, or maybe I didn't get your point.  Tell me if I'm wrong but your concern was that if I and others reduced our fees than that would force others, who didn't want to, to do the same.  Is that right? 

Seeing as it's out of office hours I can be frank. If you are in business on your own account and/or are advising others on the ins & outs of market forces, competition and the dear old capitalist society, then this is one of the main principles you need to get your head around. Basically, that's how it works on most of the planet since the Berlin wall came down.

By saying I was over charging doesn't mean I was charging more than I'd agreed with the client, just that I can find ways to reduce the work I do or, more often, that I can just charge less. It may make people cross themselves but just because I can charge £X for a piece of work, doesn't mean I'm forced to do so.  If it makes more sense, some of the fees I was charging, especially for compliance work, had became premium rates for me, I had reduced overheads, was using IT far more effectively, I could therefore afford to discount them.

There are many complaints on here, and on other threads, that people couldn't see why £1.5K wasn't a fair fee for a one person Ltd Company.  I agree, I have and could charge that, I'm worth it, but I now chose not to, because I can, and I feel much more comfortable and in control making that decision myself rather than staying with the flock to be undercut by the £600 brigade.

My busting a gut comment was not clear.  I've passed over a significant number of clients to another accountant who was able to charge a lot less than me, this has taken a large load off my shoulders.

So sorry if that puts pressure on you but, that's how the coffee smells and besides, if I can do it I'm sure there are many out there who will find it just as easy.

zarathustra yes, as you can see from the above, I have scaled down the practice but you are wrong in the rest of your assumptions.  The only benefit I have had over a 20 something today is that 15 years ago I was able to get a 95% mortgage.  I still have it today and need to work out how to pay it off in 5 years. My 4 kids & step-kids are late 20s early 30s and 3 have their own places and the other prefers the freedom of rent and none of this with any help from me.  Life is just different today and hopefully they won't experience the 15% interest rates and negative equity I did in my 30s.  I would also challenge the worn out mantra that you are a failure if you don't own bricks & mortar, we are stuck in a rut in the UK and the world really doesn't stop turning if you pay rent.

Of course, if someone needs £XXK to live then they should strive to earn it but I usually question whether we are talking want or need here.  As an example, we seriously considered moving to a caravan 2 years ago, we don't need a 4BR house, or two cars or all the other trappings that we used to believe were essential to life.  I also discovered I didn't "need" £40K's worth of office & other costs but for years had convinced myself that it all had to be paid for and I should always strive to grow....now that is nonsense.

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13th Jul 2013 07:20

I see it

"Peter - you say "I don't think anybody thinks that we are selling time because to suggest we are selling time is a total nonsense" I don't wish to be rude but you are butting into my chat with Glennzy who, on Wednesday, said precisely that...however I managed to avoid saying that s/he was talking nonsense.  So best I leave you to carry on the chat."

OK, I accept he said it but I don't think he meant it!

I think he meant that was what he contributed but obviously it isn't what a client is wanting.

Somebody making in error doesn't justify your position.

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13th Jul 2013 23:38

I'm confused now
As my comments are been taken out of context. Surely if a job took you a week you would charge more than a job that only took a day, granted not necessarily 5 x more but more. If the job was quoted wrong I would honour the quote then explain the extra work and try and agree a better fee the following year or get the client to improve records. Yes I appreciate people are paying for skill and knowledge but they are paying for it in blocks of time for compliance work. I have just agreed a deal to work with a company to refinance its borrowings this is a fixed fee plus a success bonus if the required result is achieved. The success bonus is obviously not time based but on the value of what I have done for the business. The fixed fee part has a number on conditions has a number of milestones and involves certain time commitments and attending meetings each week etc.

My comments regarding time for me are that I feel my annual earnings are ultimately governed by how many hours I choose to work. In that I would have to work more hours to earn £80k than I would to earn £40k. When in employment I used to regularly work 60 per week, my annual salary was based on a 40 hour week so I was effectively unpaid for 20 hours. I gave up the job as I no longer wish to work that sort of hours as I was missing my daughter. I am confident I can earn same sort of cash that I was before by working 35 to 40 hours per week which will do me. When I get to this level I may choose to grow further and get staff etc I may not. I don't think shows a lack of ambition. I would not charge someone more who drove a Porsche than someone who drove a van If work involved was the same. If I was in Paul's position and looking to wind down I would simply reduce client numbers and maintain fee levels, I wouldn't just do the same work at cheaper rates to reduce my income. If I was winding down I would be looking to work less hours so I could enjoy my hobbies so it would be pointless working as much for less money. If my views differ to others the so be it, but they work for me.

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14th Jul 2013 11:55

@ Paul

You are I are probably nearer in years to retirement than to qualifying, so many of these issues will not affect us directly but let's not pretend that our actions do not have broader consequences and some of them will be unintended.

My gripe with low fees is twofold:

1. If the galacial commoditisation of compliance accountancy and tax cheapens the profession it hurts those accountants who have sacrificed much (not least their youth!) to amount to something. There is also the impact upon the quality of those who have a desire to enter the industry if the rewards are low to consider. You pay peanuts etc. What the institutes are doing about this I don't know. It's probably high time some serious rationalisation went on there, anyway.

2. The clients lose out when accountancy is merely a commodity. I am sure that your clients, like mine and those of many other small practitioners, receive important and helpful advice along the way when their accounts and returns are prepared. You could almost say it's 'free advice'. I believe that this is a valuable by-product for small businesses and will be lost when the service offering becomes more like factory processing.

I wonder of you might think that you spoil your clients - what will happen to them when you put the closed sign up for the final time? 

I believe that drive towards low fees might be bad for small businesses - or at the very least the argument is not cut and dried. I understand what you say about supply and demand and capitalism. Well, that mechanism has tended to disappoint in recent years so maybe there is a case for intervention. In the meantime with this issue and with others like  green issues, animal welfare etc. we influence it by starting with our own behaviour.

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14th Jul 2013 12:35

I have had fee reduction requests from potential clients, but existing clients usually tell me increase my bill.. which is lovely to feel appreciated!

In my employment, where I was charged out at double my current fees, a lot of clients questioned the cost.. I simply pointed out how much they charge per hour, and it was suddenly no longer an issue, especially for those who hadn't spent years studying!

I do feel that more and more people no longer want to pay, maybe because as HMRC takes the mystery out of tax, they feel that it must be so easy, and they don't consider the full picture - insurance, software subs, the time spent building a file etc....and more costs for those that have offices and staff...  But, I guess it never hurts to ask, and I agree with the strategy of asking for something in return, such as better record keeping.

 

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14th Jul 2013 13:29

Cheap fees

Not too far from me there's an accountants who don't charge much for doing tax returns. I get the impression they ask for documents and don't review whether any documents are missing.

I've had plenty of clients who would be shocked by what I asked for and what I did. They'd say their previous accountant never asked for all this.

Eventually, without me prompting, they would say their previous accountant was a cowboy.

I don't think there should be any artificial regulation as that would take the choice from the client.

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14th Jul 2013 14:30

Other Professionals study too.

Do Accountants think they are the only profession that have put in the hours studying?

 I think we will find that so have loads of our clients as well to run their business.  I do not think it is unreasonable for a company or client to look at the costs of accountants.  They do this for everything else they purchase .  We are just another part of their overall business.

If you don,t want to do a job at a certain price then you do not have to and the company or client can go else where.  The market is flooded with accountants and other businesses know it.

Good clients know it pays to have good bookkeeping and accounts but some business just don,t care.

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15th Jul 2013 11:17

We are not imortal or even special

@Andy; Whilst I am, in theory, only a few years away from retirement (and would do so in 20 minutes if someone came up with an office) this has nothing to do with the processes I've described above, the prime driving force that started it off several years back was my personal circumstances but it was only then that I realised how long I'd been running when I could have been walking and achieving the same, or even better results, for me and my clients.  In other words, I wish I'd realised this 20 years ago.

I agree with the thrust of your point 1 but have no sympathy with the need to gripe about it.  The past 200 years of the industrialised world is characterised by thousands of industries and activities that have grown, declined and become extinct because of technology alone, why should we be any different and, if we chose to live an industrial (rather than say an agricultural) world, why should we be surprised, in fact, why aren't we taking advantage of it, that's how commerce works?

For example, I used to fill out personal tax returns by hand, phone & write to the client & HMRC every step of the way, manually calculate the tax liabilities etc etc, and it took a bloody age and the client didn't want to know.  These days there's still a form to prep & submit and very soon I'm hoping that the clients will be doing 98% of it with me spending 30 mins topping, tailing and checking it.

With regard to the role of the trade associations surely the best they can do is to advise practitioners to get their heads out their....spreadsheets, and smell (AND drink) the coffee. 

You can either cheer that you no longer have to waste your time doing mundane stuff and can concentrate on more valuable and interesting work, or you can sit with your head in your hands.

Which is precisely where my approach differs to yours in point 2.  I agree I want to retain that checking facility once a year, in order to keep the client and to charge for the more valuable advice & services, for goodness sake why on earth should these be a free by-product?  A far better example is in online accounting, I used to shy away from any bookwork but now I get involved regularly with my cients via their online accounting which enables me to find out far more about them and their need for other help & advice.

And when I put my closed sign up? I'll just do what I've been doing and make sure I pass clients on to the accountants I know and trust will do a good job for them.

Having said all of that I do feel that the industrialised activities and, in particular, the profit & growth motives ave done far more harm than good in the world, it's just that, at the moment, this is where I live and operate.  You are right though there's nothing to stop anyone making an effort to turn the tide and my concerns for the environment ran a close second in persuading me to downsize and stop consuming.

By the way if anyone else feels very strongly about the damage business does to our environment and population how about signing this petition?

 

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15th Jul 2013 11:36

Glennzy

I agree that everyone needs to find their own way to work & charge to achive what's important to them, even if that's 7 days a week in front of a computer screen.

I have no argument with recognising that time is a factor in what you earn.  So taking your example to the next stage, when I retire and don't work any hours my fee income will be £0. But that doesn't mean that, when I do have hours in which to work, I shouldn't find the most efficient and valuable work to do.

Where we differ is in recognising that whilst doing a month's bookkeeping or a tax return is no different for you or me between the ones we do for client A and the ones we do for Client B this is only half the picture, ie they might make the world of difference to Clients A & B, which is why I am liekly to bill a different amount for each job, to match the fact that no two clients are identical.

As well as how much each client may value the work you do for them, how about the urgency or importance of the piece of work?  I might do client A's tax return today and charge £200.  Almost identical Client B brings me the information on 29th January and begs me to do it by 31 January.  It's an identical tax return to the one I did in the summer, do I charge the same or more for it?  The irony is that, assuming I don't show them the door, there's every possibility I'll rush it through in half the time it took me to do A's in the summer, so do I charge B half what I charged A?

 

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15th Jul 2013 17:56

Andy

I see what you mean.

If you have charged them just for the compliance work and this, or anything else, comes out of the woodwork then yes, it's a discussion point and also, depending on whether it's a 5 minute call/email or a new exercise/project you'll decide to charge them £0 upwards for any extra work it involves.

To guard against this sort of potential confusion & decision making I charge clients a flat fee for the year, incorporating an element that enables them to call/talk to me, or me them, at any time about anything, with no extra fee.  So each year cients either get great value for that £XXX or no value at all (bit like insurance or the RAC).  It also gives us the buffer to go into depth about topics and then, if it really is a new piece of work, I can quote separately for it.

Before anyone asks, it's not the same for each client, I either know, or can have a good guess, whether clients need a lot of general support or not and so I might build in anything from £50 to £2K pa for general support.  With new business clients I might quote for 3 or 6 months at a time, so we each have a chance to review and amend t.

What I never agreed with was quoting a client for a year's work and then, because they needed substatially more than we'd agreed, upping the bill the next year.  Far better to charge for extra work as it happens.

 

 

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20th Aug 2013 16:34

Accountants make Poor Negotiators
I had a high-maintenance client company whose fees had fluctuated between £5k and £10k pa - it tended to lurch from one crisis to the next - whose directors told me the story of how they negotiated an all-in "free unlimited advice" deal with a one-man-band FCCA nearby.

"He quoted us £150 a month for everything, including unlimited access," they told me. Unable to believe their ears or their luck, they raised their eyebrows and asked the accountant whether he wished to reconsider his quote. Whereupon the accountant responded "Alright then, £100 a month!"

So they hired him there and then.

That was two years ago. I had a call from the MD last Christmas asking whether they might return to our practice at their old £5k - £10k fee level.

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20th Aug 2013 16:48

Sample size of one does not give confidence

I'm an FCCA and I may or may not be nearby and I quote all in one fees, but with the combination of tightly worded terms of engagement, time to quiz them on how they did things and what they needed and a nose for crap clients I doubt I'd have lost any money.

The result however may still have been the same, ie "bog off and pester the poor sod who used to put up with you" 

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