Will Cole

Journalist

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Fight the freebie: Accountants chat fees

As one accountant battles with a client on chargeable training, the Any Answers community once again grapples with one of the profession’s age-old questions: “Why am I doing this for free?”

26th Sep 2023

7 comments

Will Cole

Journalist

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The perennial headache of scope creep is one that many a stressed accountant has faced in practice. As small gestures of goodwill quickly spiral into hours of unpaid work, it’s not surprising that practitioners can feel that their hard work is devalued by chancer clients.

Whether it’s a “minor” tax question, a “simple” mortgage certificate or (as user Bridgebl01 unfortunately discovered) the training of a client, practitioners can quickly find themselves out of pocket.

Fighting the freebies

Explaining their situation in a recent Any Answers post, Bridgebl01 went on to write how they have recently found themselves at odds with a client over the offering of training services after the client’s previous bookkeeper moved on at short notice.

“We provided hands-on training to the client and took multiple follow-up calls to make corrections. We have come to bill this time off but the client feels that it shouldn’t be charged and be treated as goodwill or included in his annual accountancy fee.”

Unsurprisingly, Bridgebl01’s post attracted significant attention from the Any Answers community, who once again lamented how accountants continue to find themselves in this awkward position.

“Unfortunately, your goodwill is being abused. Unless it was a trivial amount of time (which clearly it wasn’t) why should you do it for free?” wrote user David Ex, while fellow regular Steve Ha quipped that the poster should return the favour. “What does your client do? Ask for some of that for free, as a gesture of goodwill,” he wrote.

Interestingly, the thread also resurfaced the debate of monthly versus fixed fees, something that has been brought into sharper focus since the chaos of the pandemic, with user Donald MacKenzie arguing for the former in this particular case.

“This is an example of why fixed fees are not always the best way forwards,” MacKenzie wrote, while asking: “Why on earth should you do work, not included in your expected workload, without charging?

“My invoices to clients can go down or up in any given period. It depends on what I do for them,” MacKenzie concluded.

The engagement letter is key

While some sympathised with Bridgebl01’s plight, others used the post as an opportunity to again emphasise the importance of a watertight engagement letter.

“Suppose the person you have trained makes a mistake. Suppose that costs the client. Do they have a case against you? Maybe. And maybe you are not insured against any liability, because it’s not covered by your engagement,” wrote Any Answers regular Tax Dragon.

Member JRX went a step further, asking the original poster whether they had since updated their letter of engagement.

Standing your ground

However, for many, the crux of the issue focused chiefly on the client not valuing the time of the accountant, with some arguing that it might be time for the poster to revisit their contract.

“If the client doesn’t value your time and insists training should be free, I’d tell them to obtain their free training from elsewhere,” wrote Kevinringer. “Why should the accountant be expected to train clients’ staff free of charge?”

Robbie T took a similar approach, arguing that while this issue can be seen as a “learning opportunity”, it’s essential to “hold your ground” against clients looking for a freebie, even if that means cutting ties.

“If the client sticks to their guns, I’d be strongly hinting at a disengagement,” Robbie T explained.

How would you deal with such a client? Would you double down at the risk of losing the client? Or simply take the learning experience and revisit your fee pricing? Let us know in the comments below.

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Replies (7)

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By SuperAccountingSteve

26th Sep 2023 10:05

We are not friends or colleagues its strictly business, but that may clash with marketing.

Thanks (4)

By Self-Employed and Happy

26th Sep 2023 10:08

I can't believe how people are still struggling with fees.

We have fixed fees which are very specific and are then stamped by them signing the Letter of Engagement which includes the schedules of service.

In the example given in the article we clearly wouldn't have been providing bookkeeping up to this point so the client comes to us and we would give them two options BEFORE any training.

1) We can teach you how to use QBs, leave you with detailed instructions one off cost = £x

2) We can do the bookkeeping, these are our expectations with regards to records, please add £x per month to the monthly fee

When it comes to mortgage applications / other non-accountant things then we'd either not charge them if they are a good client paying a decent monthly fee (though it is not an expectation of a client, we just experience do small time consumption extras for free and that gives you scope to charge for the bigger one off things), or we'd let them know up front it would be £x.

None of our clients ever come looking for a freebie and the vast majority even preface non-accountant questions with "bill me for whatever time", this is because over the years we have had very clear lines drawn on what they are and what they aren't paying for.

The best way to combat this is to think, would a solicitor give their time for free?

Thanks (3)

By AndrewV12

26th Sep 2023 10:24

Funny enough I was reviewing my position on this.
At the moment I do a lot of work for free.

Ideally going forward i would like to ;-

5-15 phone call, no technical reading, maybe brief look on internet - free
Any technical reading, TECHNICAL ADVICE - charge

Or say at the beginning of any conversation, Its not my chosen area of expertise so I cannot advise, after all I don't want to do it and you don't want to pay for it- AND GAUGE REACTION.

Thanks (0)

By Marlinman

26th Sep 2023 10:45

As a sole practitioner I have fixed fees and don't keep timesheets. If someone phones or emails for a quick bit of advice I don't normally charge. If it's something big, I would quote a fixed fee in advance. If you start charging everything and recording minutes spent, number of phone calls and sheets of paper like solicitors do, they become frightened to ask for advice and make a mess of things. It also increases admin time which I don't want to be doing

Thanks (3)

By Mark Lee

26th Sep 2023 10:46

I'm sorry to say that if a client doesn't value the accountant's time and effort then this is often a reflection of how the accountant themself values what they do. This isn't unique to our profession. It happens in other professions and trades too.

If we want clients to value our services then we need to do so. This starts with first impressions. So keeping track of time spent with prospective clients and avoiding giving them (much) free advice - as doing so just sets them up to expect free advice after they become a paying client too.

It includes building up your self confidence so that you can indicate when additional services , research and advice will lead to an additional charge - and giving the client the option to agree the amount BEFORE you do anything extra. Or as soon as you realise that it's more time consuming than you might previously have anticipated.

One of the problems is that the fear of upsetting or losing the client takes hold such that 'difficult' conversations are deferred. Many years ago I promised myself I would never do any work unless payment terms were agreed upfront. I never again want to risk doing any work for free. That means NEVER doing any work and only later trying to negotiate the fee.

Thanks (2)

By ShakingMyHead

26th Sep 2023 12:01

I think its a bit of a liberty. But, knowing that software isn't 'simple' (especially if the client is new to it), then the Accountant should've set a training fee up front. How long did they think it'd take? 10 minutes? If they didn't want to pay it, then the response should've been 'No problem. Look on YouTube' - that's free. It has taken years to learn software and you shouldn't undervalue this. I don't know who thinks their accountant has time to sit down all day training them? (for free). I remember years ago a very well known software provider would come to your office to train you for something like £800 for the day. Tell them to phone the software provider.

Thanks (1)

By indomitable

26th Sep 2023 13:40

The key is ALWAYS to advise upfront there will be a fee.

Had a start up small client today complaining he wasn't getting enough support, another accountant approached him saying they provided unlimited support to start ups (good luck with that!)

I pointed out to him that he is on a 'compliance only' package so any extra help such as bookkeeping, Xero training, anything other than basic tax planning would be charged extra.

Didn't like it thinks we should be answering all his questions and provide training for free.

Now they are considering their options and will probably move. But this is OK I do not want clients that I am losing money on.

This client earns a lot of money but obviously thinks his time is far more valuable than ours!!

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Standing your ground

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