The big debate: Should you give out free advice?by
The question of whether firms should give free advice is one the most hotly debated topics in the profession. After a year of firms giving away hours of free advice and support, four practitioners debate the biggest issue of the day.
To give advice or not to give free advice - that is the question.
As a profession, it can be tricky to know where to draw the line with what constitutes general goodwill and just plain freeloading with dishing out advice to potential clients. The events of the past year have made knowing where to draw the line even more of a minefield. In particular, accountants wrote off hours of billable time supporting clients with furlough claims, but this charitable endeavour has not bore fruit for practioners now the restrictions are easing.
The topic has continuously sparked debate in Any Answers, with both sides firmly backing their corner - but which side are you rooting for? We spoke to four AccountingWEB members to hear their arguments for and against giving out free accountancy advice in their practices.
The argument FOR giving out free advice
Duggimon - AccountingWEB member
I don’t think the knowledge and expertise I have is worth so little that I have to guard it closely. I’ve spent a long time learning the ins and outs of my profession and that knowledge is valuable, but the value isn’t only measured in fees.
We live in a society, and part of that concept of society is that those with more help those with less. Knowledge is a resource and should be shared where practical to do so, provided it’s not to your detriment. This is all a bit philosophical but what it boils down to is that if a person comes to me and by virtue of my knowledge I can, with very little effort, make a big impact for them, then I should do so. I lose nothing, they gain a lot, it would be wrong of me to do otherwise – the end societal impact is positive.
I can give a recent example – a nurse called me and asked about doing a tax return for her. She’s on PAYE but had expenses not reimbursed by her employer. I asked her a couple of questions, established these weren’t significant, and told her how she could find and fill out a P87 form to reclaim them herself.
This cost me 15 minutes – she gained the knowledge of how to reclaim £50 - £100 per year. My other option would have been to take her on as a client – I couldn’t very well charge her more than she was reclaiming from HMRC though, so the pressure would be on each year to do the work in less than half an hour, including AML verification and other onboarding and communication. Or I could just help her. Why on earth would I not?
Nigel Henshaw - AccountingWEB member
In general practice, ‘advice’ is given on many different subjects and levels. This could range from ‘what software is best for me’, a question answered in two minutes, to ‘how can I save tax’, a question that would require a much more in-depth discussion.
My general position on this is that I am happy to have a conversation for no charge and provide an opinion up to a point. With experience you should be able to determine where that point is, and you should be able to ascertain whether or not someone is a freeloader.
Someone calls and says “my mate down the pub said I should be limited – at the moment I do my own tax”. This could go either way – a short conversation should establish the facts and an opinion could be given as to the viability of going limited through a brief discussion of pros and cons. It’s unrealistic to charge a fee for this but a fee could result if he wants to explore it further.
The initial meeting is my chance to sell my services and show the individual that I know what I am doing and that we can work together. If I was to say I can help you with that but it will cost you, I don’t think I would gain many clients!
Someone in the original post mentioned that a roofer would not work for nothing. If I had a leaky roof I would expect to be able to call on a roofer to come out and quote me a fee – I obviously would not expect his reply to be "I will come out and look but it will cost you".
The argument AGAINST giving out free advice
FirstTab - AccountingWEB member
My experience has proved that accountants in practice, compared to solicitors, give too much advice without charging a fee for that advice. This may be due to a lack of confidence, or a keenness to present a good impression to potential clients in order to sign them on.
Accountants have spent years acquiring specialist knowledge and skills. This has value and should NOT be given away for free.
The reason clients expect a free service is because as accountants we have shot ourselves in the foot by being ‘nice’ and overly helpful without a return. Being nice does not pay the bills. We can be ‘nice’ but still charge for services.
I have not set up to be nice to clients or to help the community. I can do this outside my business. Being profitable would enable me to do this.
I want to run my practice as a business. That means advice, outside my engagement, I will continue to charge for. My case is weakened by ‘nice’ accountants giving free advice. It makes it very difficult to get clients to pay.
My plea to my peers is to please STOP giving away your years of knowledge and experience. It does not create goodwill. It shows you are desperate and you are not helping our profession. You are NOT being ‘nice’.
It’s interesting because this last 15 months has brought out the worst and the best in people. We’ve got some people who are so grateful for what we’ve done for them, but we have got some people who’ve had stuff for free and now that we’re quoting them for services they’re saying no. It is amazing how short people’s memories are - it’s disappointing.
It’s dawned on me more and more how little attention I’ve paid to my kids and family during all of this. I was just blinkered, either doing webinars or calls, and not paying any attention to homeschooling at all. There’s things like that that we’ve sacrificed. You wouldn;t talk to clients about that necessarily, unless you had a really good relationship.
Steve Briginshaw at Clarity has a great idea that he used in his business - if you’re doing work for free, invoice it and then credit it. Perhaps with hindsight we should have done that a bit. We started charging for furlough around June when the rules changed, but until then we did it for free. We do charge now, but not what it costs. It’s still a loss making exercise.
Now is about reviewing all your clients, what they’re getting, what they need, and having those conversations with them. The way it’s been this last 15 months with doing stuff for free can’t continue. It’s not sustainable.
Sharon Pocock shared her thoughts in an episode of Any Answers Live, which is available on demand to watch anytime here.
Now that you've heard both arguments, it's time to decide which side of the debate you're on. Are you for or against? You decide!
It's the big debate: Should accountants give out free advice?
— AccountingWEB.co.uk (@AccountingWEBuk) June 18, 2021
Comment below with your stories and viewpoint.