Knowing When to Stand Firm on Fees
With year end work approaching and tax season on its heels, you may find yourself in a conundrum: Good clients who really like working with your firm, love your service and think your fees are fair that just won’t be able to pay your standard fees this year. What should you do when clients ask for a fee reduction?
Start by identifying the A clients you want to invest in. When you know the clients for which, should the issue arise, you are willing to make fee concessions you’re more prepared when approached. Be ready with a plan to talk with clients so you are not taken by surprise if they ask.
Don’t discount the fees of a D client in bad times. You’ll only perpetuate the pain going forward. Be willing to let some clients go.
When a client asks about reduced fees, first explore changes in scope that can impact the total fee. Will a review be ok for a year or two vs. an audit? Can you do a collateral only audit vs. a full scope engagement? Can you get clients to do more of the work so you invest less time–like assigning a client’s employee to the audit team full-time for the duration of the fieldwork to be the “go-fer” in finding information or people, and to get questions answered without the CPAs doing the running around? Can you arrange a term payment plan for the fees to make it easier?
Most importantly, be willing to talk with clients about the subject. Don’t hesitate or act angry they asked or buckle at the first sign the client wants a reduction. Empathize with them, but remember what you are charging for the service you provide is fair. If you choose to invest in a client, make sure they know it is a temporary situation. Let them know you are willing to do it because they are an important client of the firm and you want to help.
Finally, consider proactively approaching clients you know are suffering and invest a little in fee reductions or a temporary change in scope. Your small investment will generate exponential returns by strengthening your client relationship.