cpa billing rates

when fees don’t keep up with cost increases

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ed mendlowitz cpa the practice doctor q and ait’s not too late in the year to make changes.

by ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor

question: my expenses have crept up greater than my fees. what should i do?

more practice doctor q&a: lowballing and why it (usually) doesn’t work | when is it time to merge? | what goes in a client’s permanent file? | why the average fee doesn’t matter | no more printouts at cpe programs? | how to apply value pricing to bundled services | 6 ways to take a client beyond tax prep | 18 ways to blow a partnership opportunity | when experience doesn’t add up | 8 times when hourly billing trumps value pricing | 6 ways to know what you don’t know | 10 do’s and don’ts for making small business clients happy | client’s difficult daughter balks at bill | 6 simple steps to impress a prospect

answer: very important to increase fees at least enough to keep up with your increasing costs. here is a story i have told dozens of times at speeches. this is one of the things i wrote that i really like. in case you wonder, i have given a copy to freddie.

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lowballing and why it (usually) doesn’t work

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ed mendlowitz cpa the practice doctor q and aplus some exceptions and how to pull them off.

by ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor

i actually received the same question from two people in one day. these calls were from two cpas i speak to a lot, have a lot of respect for and who have successful firms with other partners and a good number of staff. 

question:  (1) i lowballed a fee to get a client ($2,000 a month), got the client and the time was running twice what i charged them ($4,000 a month). i asked for an upward adjustment four months later of halfway between the time and the fee (an additional $1,000 per month). they dropped me and went back to their prior accountant, who was charging less than i was ($1,800 a month), but who didn’t do anything close to what i was doing. i feel the client knew it was a lowball and took advantage of it. what did i do wrong? read more →

why the average fee doesn’t matter

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ed mendlowitz cpa the practice doctor q and anot all data is relevant.

by ed mendlowitz
the practice doctor

question: what is the average fee that your firm charges for a review? assume the company is approximately $10 million in sales and $3 million in assets.

answer: what is the average size suit men wear? this might be nice to know but it is not relevant to any specific situation. read more →

how to apply value pricing to bundled services

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ed mendlowitz cpa the practice doctor q and adon’t confuse it with value billing.

by ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor

question: i tried value billing and it didn’t work. i would rather bill my business clients on a fixed fee for my services.

response: actually, you are value pricing when you do the fixed fees. you confused value pricing with value billing. value pricing is where you sit down with the client and you jointly determine the price before any work is done.

more practice doctor q&a: 18 ways to blow a partnership opportunity | 8 times when hourly billing trumps value pricing | 10 do’s and don’ts for making small business clients happy | 10 (nearly) painless ways to keep up to date with technology | 23 reasons clients really need you for taxes | running an accounting business | 14 ways to switch to value pricing | pricing, billing, costing: don’t blame clients

value billing is where you try to get an extra payment after the work is done. i believe the best way to determine a fee for recurring services is to set the fee with the client in advance of performing any work. i’ll explain. read more →

how to tell a client how the fee was set

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ed mendlowitz cpa the practice doctor q and aby ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor

question: i performed some additional services for a client and gave her a bill that she questioned and wanted to know how much time i had spent. i billed more than the time charges, but this client never gets time bills – everything i do is on a fixed fee so i never account for my time with her. what should i say now?

more practice doctor q&a: 18 ways to blow a partnership opportunity | when experience doesn’t add up | 8 times when hourly billing trumps value pricing | 6 simple steps to impress a prospect | making meetings more productive | 5 time management tips for an overworked accountant | running an accounting business | 14 ways to switch to value pricing | pricing, billing, costing: don’t blame clients

response: if a client is on a strict time basis, they are entitled to a breakdown of the hours and person performing the services.

otherwise, when clients ask me how i arrived at a bill i tell them something similar to this:

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readers sound off: value pricing vs. hourly billing

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bullhorn
reader sound-off

the gloves come off.

in his recent q&a column, 8 times when hourly billing trumps value pricing, ed mendlowitz addressed a question about moving completely away from time-based billing but noted that as much as he liked and suggested value pricing, he did not believe it could be used in every situation.

our readers’ opinions were both strong and divided. read more →

8 times when hourly billing trumps value pricing

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ed mendlowitz cpa the practice doctor q and aand when it doesn’t.

by ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor

question: i am trying to switching to value pricing and am having trouble getting completely away from time-based billing in certain situations.

response: value pricing is a great method and concept. i suggest reading, and thoroughly understanding ron baker’s “implementing value pricing: a radical business model for professional firms.” i like what he suggests, have used some of his techniques even before he started writing and speaking about them, and recommend it in many situations.

read more →

client’s difficult daughter balks at bill

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ed mendlowitz cpa the practice doctor q and ado you talk to the dad?

by ed mendlowitz
the 卡塔尔世界杯常规比赛时间 practice doctor

question: i have a very good client who pays us to prepare his daughter’s tax return. the daughter was going through a divorce and asked us to assist her and her attorney and she said she would pay us herself, and we shouldn’t ask her father to pay us and she also asked us not to tell her father what was going on. we did a lot of work and because of what we did she got a much better settlement than if we did not help her. additionally a lot of what we did was rush on-demand work and some of it was quite difficult. also, she was not the most pleasant to deal with on many occasions. read more →

卡塔尔世界杯常规比赛时间 forum: tax season prep tips?

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readers’ forum: hours worked. firing clients. setting prices.

chris basom
chris basom
  • chris basom, managing partner of your money matters in mission viejo, calif., wants to know the “one thing you wanted to implement before tax season but just couldn’t get to.”
  • “is cash still relevant?” asked solo practitioner roxann otto of otto tax & accounting services in slinger, wis.
  • charles g. read in the melbourne, fla., area would like to know how other accountants arrive at the charges they present.
  • deborah mcdowell cain of her eponymous firm in fort worth, texas, asked, “does your firm work five, six or seven days a week? is overtime for staff mandatory? are senior staff hourly, salaried, offered overtime or comp time?”
    • and harking back to the busy season, she also asked, “how many people touch a return? why?” read more →

14 ways to switch to value pricing

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ed mendlowitz cpa the practice doctor q and aby ed mendlowitz 

question: how do i switch to value pricing?

response: there are a number of ways. ron baker’s books tell how to do this. so does dave cottle’s but in a different way. i believe most firms do some sort of value pricing and that is when a fee is determined in advance with the client. i’ve written previously on this and have presented programs for cpa firm management groups, but here is a descriptive checklist to use as a guide: read more →

pricing, billing, costing: don’t blame clients

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communication negotiation pricing istock_000020509177how good communication habits can head off problems.

by ed mendlowitz
implementing fee increases

professional fees are typically billed based on time. yet, clients want outcomes and place a value on results, which doesn’t necessarily relate to time spent.

ingrained habits are hard to break away from. for ages, many professionals quoted jobs by providing hourly rates and possibly a range of expected hours. some projects are open-ended in the sense that no one knows where it will take them and what will be uncovered once work commences. this might include a forensic investigation, litigation where the discovery process becomes acrimonious, unraveling transactions in a complicated bankruptcy, a first-time audit of a multinational corporation or a tax audit for a reasonably sized business.

however, for most work, there is an understanding of what will need to be done and the approximate value to the client. this could include an annual audit, tax return, setting up a cost accounting or internal control system or a transfer price study. read more →