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My Week: Fee Increase

26th Jul 2018
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Hello folks. We reached record temperatures during the week. It was uncomfortably warm in the office. I was cursing my architect for not thinking ventilation during the planning stage of renovation. It is now too late for us to have air conditioning. Mind you, the eco-warrior in me is pleased with the status quo.

Increasing fees

I have a client hit list on fee increases. I contacted three of them during the week. It was not easy. Nobody wants to pay more. There was resistance.

I was concerned that some or all of them would jump ship. One said she would review her options. Meaning she will look around.  Through an exchange of emails, we reached a compromise. I agreed to reduce the increase by 50%. Thankfully she is staying on.

With the remaining two clients, after stressful discussions, they caved in on the increase. I have a few more clients to contact. My target is three a week.

I should have addressed fee increases some time back. I do not think; I am not any different to others in procrastinating over the matter. It is simply due to the fear of losing some of the fee bank. It is risky, but at the same time, it needs to be addressed.

Social Media

I have started experimenting with social media. I still have not downloaded Facebook, Twitter, and Linkedin apps on my smartphone. Some time back, I even turned off all notifications from these channels. Over the weekend, I will review which notification to make active again.

Being truthful, I do not like any of the channels I mentioned, since it a time-consuming activity to keep up.

At the same time, I need to participate, since my reading has shown they are important sales channels if done right. It is early days for me. I will take it day by day. No doubt, I will make mistakes. That is the way we all learn.

Tax Blog

As you know, I am addressing a weakness in my tax knowledge. In that regard, I drafted a business blog on residential landlords deductible expenses.  Like my AW blogs, practice makes perfect.  I have a long way to go. If I were not studying for CTA exams I would not have drafted a blog on tax.

CTA

I booked for the November 2018 Individuals advisory paper examination. It is challenging to find the time to study. In the evenings I am exhausted. That leaves early mornings before work and weekends.

Individuals is one of the more challenging paper since the coverage is wide and also because of the time pressure in the exam. You really need to know your stuff to get through.

After the last exam, I covered all of CGT, and I had covered personal tax before the last exam. I just started on past exam questions. I will now only work om past exam questions unless it is an area, I do not understand.

And Finally

I love the summer, but it has been too long since we had rain. I want rain to reduce the uncomfortable temperature levels and so that we do not have water shortages. Lack of rain is now worrying.

I hope to back here next week. Unless of course, my head ends up on a stick.

Replies (5)

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RedFive
By RedFive
27th Jul 2018 17:51

What percentage fee increase are you asking for (of the existing fee)?

I’ve just vat registered and absorbed the vat on non vat clients. I will be embarking on a fee increase exercise on a case by case basis so interested in your experience.

A couple done so far have both taken the full 20% another I went with 10% and was fine. I am far too cheap to start with though and they probably know that.

Thanks (1)
Mark Telford Chartered Accountant
By Mark Telford
27th Jul 2018 20:27

@FT - did you increase fee because you though they were due an increase or did you think they were under charged/you were too cheap?

I don't go with this annual increase malarky.

Year 1 - get to know client, work takes longer than expected.

Year 2 - understand the client now work done a lot quicker (so why increase fees)

Year 3 - again, work completed efficiently, if happy with fees no need to increase

Year 4 - increase fees explaining why - increase in size of business, change in reporting requirements, increase in software costs

I've recently increased fees for a number of clients on this basis and had no issues - some said they were expecting it.

All the above assume you've provided the same services across the 4 year period. Obviously if you start to do more work - charge for it.

Thanks (1)
bike
By FirstTab
01st Aug 2018 16:55

Thanks for the response.

Fee increases were in the range of 20 - 25%.

Fees were increased since the current fee levels were just not viable. They were clients I took on in my early days.

I do not have annual increases. Fees are reviewed on a client by client basis.

Thanks (0)
bike
By FirstTab
01st Aug 2018 16:55

Thanks for the response.

Fee increases were in the range of 20 - 25%.

Fees were increased since the current fee levels were just not viable. They were clients I took on in my early days.

I do not have annual increases. Fees are reviewed on a client by client basis.

Thanks (0)
avatar
By dbowleracca
12th Aug 2018 09:15

I think annual fee increases are necessary for most clients, unless you are already making a good recovery or the business needs have reduced.

Our staff will want a 2-3% payrise this year, and Iris will want to put their fees up by 6% or similar, and then on top of that there’s GDPR to comply with and MLR, plus auto enrolment costs.

If we didn’t increase fees, we would just make less profit each year.

Best to put fees up by 3% a year or more if the job is making a poor recovery, as it is easier to handle for clients than a 20% increase every 5 years.

Thanks (1)