Implement a fee increase in your accountancy firm. A 10-step guide
What is your reason or reasons for not deciding to implement a fee increase for your clients in your accountancy firm? Perhaps you don’t feel able to increase them because you don’t know where to start or what to charge or you don’t have the time to do it properly. Or maybe you are just avoiding it because you don’t want to have those difficult conversations with clients. Whatever your reasons to not implement a fee increase, you need to overcome them. Knowing the value of your work is the only way that you are going to win the bigger and better clients that you actually want so that you can grow your million-pound practice. To help you do that, here is a step-by-step guide to implementing a fee increase.
Step 1: Know your why
What is your why for wanting to implement a fee increase in your firm? Will it allow you to hit your monthly revenue goals? Will it allow you to work fewer hours and spend more time with your loved ones? Perhaps it’s as simple as weeding out the low fee clients so that you have a core of high-quality clients who fit your niche and offer you the type of work that you love.
Once you know your why and it’s at the front of your mind, this can be a powerful confidence boost that gives you the motivation to get started. Starting is always the hardest part but knowing your why will also give you the dedication to keep going until it’s done.
Step 2: Understand how you got into your current situation
Ever heard of the phrase “you got yourself into this mess, you can get yourself out of it?” As harsh as it may sound, it’s true. Only when you understand how you got into a situation can you fix it and get yourself out of it.
Look at your existing clients, are they all on a standard package paying their compliance fees monthly via direct debit? Are you invoicing using bookkeeping software such as Xero? If not, these are the key priorities that you need to fix. Any client who doesn’t accept this change should be told that their fees will double or that they will be helped to find another accountant. (Find out how to get your clients paying direct debit)
Step 3: Build a comms and implementation plan
So you know your why and have identified some existing problems in your accountancy firm, now it’s time to devise a plan to address them. Implementing a fee increase is an important growth objective for your firm, so it is recommended that the whole firm focuses on this during a 90-day sprint.
Put together a strategy outlining everything that you need to do to implement a fee increase. Set yourself weekly targets to hit and review your progress at the end of every week.
Step 4: Identify the right fee level ‘packages’ and individual fees for individual services
Your fees should reflect your own business model now, not your prices a few years ago or the prices of a local competitor, so base your fee levels on you.
To work out the right feel levels for your service packages, perform a comprehensive review of your costs and then mark up these costs to ensure you get an ideal profit. You can use spotlight reporting to do this, but you’ll find that most firms typically fall into three packages:
1) Stripped back essential compliance services only service at £60-£150/month
2) An ‘all-in’ compliance services (not including bookkeeping) at £150-300/month
3) An advisory + compliance service package from £300/month
Step 5 (optional): Build (or buy) a fee quoting tool
Quoting for services can get out of hand, especially when staff quote clients themselves, and this can lead to massive inconsistencies between your clients.
By creating your own spreadsheet-based quoting tool or buying one such as Easy-quote, GoProposal or Practice Ignition, you can be sure that your staff are confident to quote clients so that there is less bottleneck in your firm and that your pricing is consistent across all clients. This tool will also allow you to accurately quote live in your meetings with clients preventing them from trying to negotiate the price and increasing your conversion rate.
Step 6: Do a client portfolio analysis and make a plan for each client
To implement a fee increase successfully, you need to be sure that all of your existing client’s fees are where they are needed to be.
Use your fee quoting tool to re-quote for every single client that you have and once you have completed this client portfolio analysis, make a plan for each client to raise their fees where applicable. (Why don’t most small accountancy firms have a clear fee strategy?)
Step 7: Identify and role play the “what happens if?” scenarios
Every client isn’t going to say “yes, sure, we’ll be happy paying more!” when you have those conversations about implementing your fee increase, so think of the various potential scenarios that could arise and role play how you would handle it.
Gocardless has some content to help you with what to say to clients who are resistant to moving to direct debit, so use this to script your responses. Always pick easy clients that you don’t mind losing first so that you can practice having these conversations.
Step 8: Timetable your fee increase calls
Thinking that you have to make all your fee increase calls in one go will overwhelm you, so timetable in when you will make your calls and spread these over a few weeks.
Timetable in each client for a call and make yourself weekly targets for the number of calls that you want to get done. Plan to call the clients that you don’t mind losing first and then as you grow in confidence, call the clients with the biggest fee increases. You will soon find that you will grow in confidence after each call is done.
Step 9: Make yourself accountable to implementing your fee increase plan
It’s all well and good devising a plan but if you don’t build in accountability, it’s unlikely to get done.
Accountability can be as simple as asking a colleague to check in on your progress every two weeks or giving yourself short-term rewards for when you make a certain amount of calls. If you’re struggling to make these calls or get through to your clients, you could get your client administrator to phone or email your clients for you to book face-to-face appointments. That way, you are accountable for attending the meeting and having that conversation.
Step 10: Call your clients and follow up with written confirmation
Now that you have everything that you need to implement a fee increase successfully (here are 3 successful ways to do it!), the last step is to make those calls to your clients and talk through the reasons for the increase. Once you’ve had these conversations, it’s good practice to follow these up with written confirmation.
Although the best time to implement a fee increase is at the start of a client’s financial year, there is nothing stopping you from having the fee conversation NOW. Using this step-by-step guide, you should have the confidence that you can increase your fees successfully.