april2021 - 28

FEATURE

How to Increase Your Fees with
Current Clients
By Shahram Zarshenas

EVERY YEAR, ACCOUNTING firms across the country take time
to reevaluate how they handle business with their clients. One
important discussion point is, " how much are they charging
their clients for their services, and is it enough? " .
Pricing is one of the biggest concerns
of a majority of accounting firms right
now. Some may feel they are overworked
and undervalued with all the extra work
they provide. It's not an easy thing to
discuss especially if they're dealing with
demanding clients. While it may require
a lot of courage and consideration, an
accounting firm also needs to think
about how much value they put in that
business relationship. If you believe that
increasing your fees is the right thing to
do, then here's what you need to know:

EXPERIENCE ADDS VALUE
Make a list of all the services you've been
providing for your client. This will give
you a more precise look into how much
work you put into your service. Have
you recently expanded your practice to
incorporate new services? If the answer
is yes, then it's a clear indication that you
need to raise your fees.
Adding more value to your practice
should be equally compensated. You also
get more experience through the years,
which in itself increases your value. For
legacy clients, you may have started
with minimal experience and a modest
fee. Now that your firm has grown and

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APRIL 2021 ■

www.CPAPracticeAdvisor.com

gained more experience, it's time to
negotiate fees that reflect that growth.

TECHNOLOGY ADVANCES
ALONG WITH COST
Being in the business for quite some
time, you're bound to adopt new tools
and equipment to help you do a better
job. You may have switched from a rudimentary form of accounting workflow to
automation and computerized accounting. Updating the accounting software
you mainly utilize always comes with a
cost. The price of doing business online
and using automated systems can be
expensive.

TELLING YOUR CLIENTS
Now that you have enough justification
for raising your fees, it's time to tell your
clients. Informing your clients that you're
about to raise your fees may be daunting,
but there's just no way around it. If you
want your firm to survive and thrive, you
need to make the hardest decisions.
Everything starts with a sample
letter for an increase in professional
fees. Notify your clients with a carefully
structured letter stating your intention,
justification, and commitment to providing a better service.
Here are a few things you should
consider mentioning in your letter:
* Thank your client for their business,
and let them know that you value your
relationship with them.
* Make it clear that initiating a raise is not
a random move and that it took careful
consideration and time to arrive at a
decision.
* Justify the increase. Lay all the details
of why you decided on a raise and how

much the workload has changed. Mention
relevant industry changes and new
regulations.
* Announce the increase and its effective
date by stating it clearly in your letter.
Include a comparison of old and new
pricing side by side to avoid confusion.
* Enumerate and clarify any exclusions that
are not covered by the new set of rates.
* Reiterate your commitment to exemplary
customer service. Let your clients know
that you are willing to provide a level of
service they have the right to expect.
The last thing you need to consider
is when you plan to send the letter and
when it will be effective. Ideally, you
should give notice at least two months
before the actual implementation of
the new rates. Give them enough time
to accept your proposition, but not too
much time that they may seek other
alternatives.

CONCLUSION
Raising professional fees is a natural
part of any accounting firm's growth.
It's never an easy decision to make, but
you'll experience it sooner or later. As the
market evolves, your business relationship with any client should also follow
suit. In the end, your goal should be to
provide excellent service and obtain fair
and reasonable compensation for it.
Every accounting firm needs the right
tools to provide a level of service they
can be proud of. Financial Cents offers
CPA practice management software
and workflow automation apps to help
you achieve your goals. Get your free
workflow starter pack and start hitting
those accounting deadlines today! ■
Shahram Zarshenas is CEO of
Financial Cents https://financialcents.com.
https://financial-cents.com http://www.CPAPracticeAdvisor.com
april2021

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