Pricing, Billing, Costing: Don’t Blame Clients

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 →

Some Clients Just Aren’t Worth the ‘Mishegoss’

By Ed Mendlowitz

QUESTION: I have a client I really don’t like and want to drop, but I hesitate because of the long relationship I’ve had with her, and also I don’t want to lose the income. What should I do?

RESPONSE: I’ve addressed this before, but I am taking a different approach this time.

Dropping clients is never easy and I don’t think should be done lightly. However, there are some instances when it needs to be done. This particular client I was called about is extremely obnoxious. Not the normal grade of obnoxious, but far more so.

In fact it was one of the rare clients that I dropped. The call was from the accountant who had the client since then. I had the client six years. She’s had the client eight years – so she is much more patient than I am.

When she told the client she was dropping her, the client started to cry and beg her not to, so she changed her mind. Now she wants me to tell her what to do. For beginners, I have dropped very few clients. This client was one of the nastiest people I’ve ever dealt with. She was also very nasty to her husband, treating him like s – – t, and he has since passed on.

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Is the Profit Squeeze Over?

New trends emerge in net profit margins and accounts receivable.

After years of intensifying and debilitating pressure on bottom lines, profits at tax, accounting and bookkeeping firms appear to be hitting 10-year highs, according to information obtained by CPA Trendlines from Sageworks, the specialist in tracking private-company financials. READ MORE →

Keeping Clients in Line: Start with Late Fees

Ed Mendlowitz CPA The Practice Doctor Q and A

Plus five more clauses you might want to consider.

By Ed Mendlowitz
101 Questions and Answers

QUESTION: You state on the bottom of your invoice that you charge 1.5% for balances over 60 days. Do you actually implement that or is it just warning? Do you do it on all clients or just some? Do clients pay that or complain? If they send in payment without that, do you write off the finance charge or leave it open? READ MORE →

How to Find New Clients on Social Media

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Study shows CFOs’ key interests and topics for conversation.

By CPA Trendlines

New research into chief financial officers’ habits on Twitter shows their favorite topics of conversation, how they describe themselves and their top sources of information.

Any one of those could be an opportunity to make a connection, maybe even make a new client, according to business development experts. 

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When a Client Threatens to Sue

Ed Mendlowitz CPA The Practice Doctor Q and A

By Ed Mendlowitz
101 Questions and Answers for Managing an Accounting Practice

QUESTION: A former client wrote me a letter threatening to sue me for bad services.  I did nothing wrong and actually did a great job and they still owe me money.  What should I do? 

RESPONSE: Walk away!  Ignore the threat.  Don’t respond.  Stop billing them.  And go about your business.  Life is too short to get tied up in dissipating actions.  It is rare to run a business without getting stuck from someone.    READ MORE →

The 5 First Steps in Targeting Clients

Ed Mendlowitz CPA The Practice Doctor Q and A

How to build a plan.

By Ed Mendlowitz
101 Questions and Answers for Managing an Accounting Practice 

QUESTION: I want to start growing my practice but am having trouble defining my target client.  I tend to accept every client I can and seem to have clients all over the place. Is there anything I can do to better target my “ideal” clients? 

ANSWER: To have a target client means you have a target. The target is the result of a plan. So, what is your plan?  READ MORE →

When Should You Drop a Client?

The thought and calculation that goes into pruning a client list.

By Ed Mendlowitz

QUESTION: I want to clean out my client list of small tax clients because I am just too jammed during tax season, and don’t have enough business to hire someone. Should I just drop the lowest-paying 10% of my clients?  

RESPONSE: I never like dropping clients unless you just can’t stand them and are losing money on them and they never referred any new business to you. However, there are times when it is smart to prune your client list. 

Many times practices grow where you take every client that comes along. For some that is a good strategy. For others, the strategy could be to accept only the type of clients you feel you could service best and can get the right fees. We are in a personal service business and we make our money by the work we personally do or personally are responsible for and personally supervise. We literally give up part of our lives for the benefit of our clients (and also to make our living). Somehow the living comes – for some a little higher and for others a little lower, but it comes. It is the way we want to spend our time that we need to control. 

This starts with a clear assessment of your abilities and what gets you charged up, and where you think you can help clients the most, and for which they are willing to pay your fee based somewhat on the value of what you contribute to them. Regardless of when you started and how much you might have strayed from your original plan, you can always do an up-to-date assessment and start from that point going forward.  READ MORE →