Phoebe Roberts, EA <Phoebe[at]cottagesoft.com> wrote:

- quote -

Yeah, been there, done that...

Anyway, thanks for your comments on all of this. I am
~considering~ reintroducing hourly billing in some cases
because I got hit pretty bad this year on a handful of
returns that were ~way~ more complicated than prior years.
The problem, of course, is to identify IN ADVANCE the
situations that are likely to go deep into "overtime." <g
MTW

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MTW wrote:
- quote -

We always agree to it, and I always suggest that as an
option to people who think their price is too high. Our
fixed price is based on our desired realization rate, which
varies from 60% to 120% of our nominal hourly rate. Except
for clients we've historically made *very* good money on
(who we're happy to accommodate if they feel they're paying
too much), or people who have become simpler (and deserve a
lower rate) hourly is a worse answer.

- quote -

We offer our clients a choice because we want them to be
happy. If it were just our own happiness we were
concerned about, it would be the fixed price, take it or
leave it. We do fixed prices because we hate billing
(especially when the bill is surprisingly large), and no one
is unhappy with an unexpectedly small bill. Even us,
because we got our full rate, which is more than our desired
realization rate.

- quote -

Then they feel obligated to negotiate every year, because we
obviously set the first offer too high.

- quote -

the return is worth and never darken our door again" policy,
which covers that situation.

Phoebe

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Phoebe Roberts, EA <Phoebe[at]cottagesoft.com> wrote:

- quote -

Aha! The "have your cake and eat it too" option. <g> Do you
often agree to that? It seems like it would kind of negate
the reason for offering the client a choice in the first
place. I guess I'd be tempted to set the cap on the hourly
rate at (say) 20% above the fixed price; or, instead, simply
negotiate a discounted fixed price with the client.

- quote -

That's a reason why I have always avoided any type of
bartering, not wanting to "offend" the client if there is a
~disparity~ in perceived value. <g
MTW

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MTW wrote:
- quote -

As to Phoebe's third option, I employ a variant of that.
After we're through and client has his checkbook out with
pen in hand, he asks me "how much do I owe you?" And I
reply "xxx dollars, if that's all right with you," or
something like that: maybe, "if you agree."

And annually when I revise my monthly accounting fees my
letter always spcifies it as a "proposal", and not a "fait
accompli." The standard in our profession SEEMS to be,
"this is what I charge, and if you don't like it, you
can...... (lump it.)"

Now, as to your preferred barter medium for females; well,
it really depends on what she looks like and how
available.... (ohnevermind)

Cheer$$,
Harlan Lunsford, EA n LA
(and no, I've never done that! lol)

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- quote -

My fee schedule CLEARLY & CONSPICUOUSLY says "MINIMUM FEES
PER FORM" on it. My invoice lists the all the forms and
schedules used by my software in the preparation of the
return but does NOT list the individual fee for each
schedule. Many of the schedules and worksheets used do NOT
have individual fees associated with them because I simply
don't feel like breaking my fee down for some items - for
example, for estimated tax payments the system is setup to
charge only for the calculation but the invoice lists the
calculation AND the coupons.

I have no difficulty in discounting the fee whenever a
client is well organized and prepared. By the same token I
lost little sleep writing up the fee when the client is ill
prepared, unorganized, and can't (or won't) stay focused on
the task at hand.

My fee schedule clearly says that it does NOT include all
charges for all possible forms and that other fees and
charges may apply.

I can count on the fingers of one hand, with fingers to
spare, the number of times in the last 21 years I've clients
ask for a detailed/itemized accounting of my tax prep fee.
And when they want one, I have no problem giving them one -
of course it usually means that they will be the first to
see an increase next year!

Lastly, am I willing to tell my clients how I bill? If they
ask, certainly. I make no apologies for their deficiencies.
My brother, also an accountant though in a different city,
has a sign on the wall behind his desk that reads - Lack of
proper planning on YOUR part does NOT constitute an
emergency in MY office".

Gene E. Utterback, EA

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MTW wrote:
- quote -

"Hourly capped at the fixed price offered" is a popular one.
"Hourly capped at a lower price" we may or may not take.
With the exception of one client where there's been some
issue about the value of the items bartered, we give a cash
price to barter clients, whose barter items are also priced
in cash. The client with valuation issues pays with a
specified number of the items bartered; since the expense is
a business deduction on both sides, the exact value doesn't
matter.

We've happily bartered for: greeting cards (handmade by the
client as her business), massage, auto repair, paintings,
photography, and haircuts. We have unhappily bartered for a
fountain with a woman who felt that her fountain was worth
several hundred dollars (due to its artistic merit) while we
felt it was worth the $20 we could have bought the
equivalent at Home Depot for. She is no longer a client.

Phoebe

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Phoebe Roberts, EA <Phoebe[at]cottagesoft.com> wrote:

- quote -

I am curious... Have you received any interesting offers
under your third option? I once had a prospective client who
offered to trade services, like bird watching and flute
playing, for tax preparation. I told her that my preferred
"barter" medium was CASH, and never heard from her again.

MTW

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- quote -

I thought I had replied day before yesterday, but apparently
not.

Yes, I have "needy" clients too. But these are "needy"
cause they're po .. (poor). And my really low fees
reflect that. I couldn't do their return for free and
insist that it's free, or they wouldn't come back the next
year. A matter of pride you see.

But more to the point, we are indeed free to charge
according to...... (get this!) .... facts and
circumstances!

Cheer$$,
Harlan Lunsford, EA n LA

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- quote -

Tell your clients what you doing (or planning on doing), see
what they think. You are willing to tell them, right?

How do you mange to charge more for 'needy' clients using
the same fee schedule?

I use a fee schedule that is the same for all clients, but
have an hourly rate that may apply ABOVE AND BEYOND the fee
schedule depending on the circumstances relating to
individual clients.

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- quote -

Not I would, but your post has me curious - what is the
problem you see with multiple price tiers and why do you
view that as only related to differentiated services?

I've always thought I was free to charge "whatever the
market will bear" and if I choose to charge different
clients for the same work that I was free to do so as long
as I wasn't discriminating against them as a protected
class. Quite frankly, I have some "needy" clients that I
regularly charge more than my other clients because they are
so difficult to deal with - please note that we bill on a
fee schedule for most work and not hourly.

Gene E. Utterback, EA

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[snip]

- quote -

Not so tought. Unless you plan to provide clearly
differentiated services, I do not see how you can set up two
price tiers. However, you might do a 10% accross the board
increase, or reset your fees to hers.

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Harlan Lunsford wrote:

- quote -

Not everybody charges by the form, though, and the process
we go through to get prices is too sausage-like to subject a
client to.

I've seen some returns where the preparer charged by the
form, and every scrap of paper that his computer would
produce was bundled into the client copy.

We give a (negotiable, if asked) price up front for most
returns, with an option to go hourly if the client prefers.
Engagement letter has 3 choices: fixed price (default if
nothing is marked), hourly at standard rate (which is
provided, and doesn't vary), or "write your own option in
below, and we'll tell you if we don't like it."

Phoebe

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- quote -

Nice web site. colorful, but nice. And you post your
prices, too.

I kinda think more preparers should do that. As it is,
many in this profession keep it close to the vest, hoping
they can charge "what the traffic will bear." WE need more
openness.

For example, another preparer who sends me her clients for
efiling (and I do not solicit them) started out with one of
the big boys. Well, H&R Block, that's who. And naturally
used their pricing structure to start back about 1986. And
somehow managed to match H&RBlock every year, so that
nowdays she's charging maybe 140$ for a typical set of
returns.

So, she's had three heart attacks and closed up, but will
send her clients to me. Now, should I charge them about the
same she's been charging them? Or charge them regular
fees, i.e. about 25% less? Tough call.

Cheer$$,
Harlan Lunsford, EA n LA

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