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Fees and billing checklist - Key lessons

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26th Feb 2018
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Philip Fisher concludes his accountant’s guide to fees and billing series with a look back at some of the key takeaways.  

This long series has contains an awful lot of information so it is worth reflecting on some of the most significant points that can help you the next time you try to scope or negotiate a fee, particularly where there has been an overrun or a dispute is in the offing.

  1. Take care throughout the process.
  2. Try to remain in control wherever possible.
  3. Prepare an engagement letter that is as close to watertight as possible.
  4. Make sure that this is signed by both parties.
  5. Try to envisage any potential problems before agreeing a fee.
  6. Agree a fixed fee wherever possible.
  7. Contingency fees can be very rewarding but also highly risky. In the right circumstances, they should definitely be considered.
  8. It is generally not a good idea to try and con your clients. Far too often, they will see through unfair or unreasonable charges.
  9. Consider the use of premium and discounted charge out rates in addition to a standard one where hourly rates are to be used.
  10. Bill little and often.
  11. It is important to distinguish between overruns and additional work.
  12. Address overruns at the earliest possible opportunity.
  13. Negotiate fees for additional work as you go along.
  14. Prepare carefully before sending out fees and also entering into any negotiations.
  15. Bear in mind that negotiating a higher fee than expected is great news for your business. It is a quick way to benefit not only top line but also the bottom line, often with minimal effort.
  16. Ideally, communicate unexpected fees verbally.
  17. If negotiation is necessary, consider the best method for carrying this out. Telephone conversations or face-to-face meetings are recommended.
  18. Sometimes it is worth giving a little in the short term to get long-term benefits.
  19. Use billing conversations as a means to gain additional work.
  20. Where things are going wrong, it might be a good idea to step back and let someone else take over the negotiation.
  21. Try to regard this process as enjoyable. It will make interactions with clients easier and reduce stress.

One further thought is that sometimes we can get ourselves into a horrible mess when trying to decide on how much to quote for a fee, how hard to press a client to payments and throughout any dispute.

In these circumstances, it is often a good idea to bring a colleague into the conversation and bounce ideas off them to get reactions. In these cases, two heads are very frequently much better than one.

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