Monday, February 8th, 2010
ARE YOU GETTING PAID?
I really like the opening line in an article titled, “Better Ways to Get Paid” by Liz Gold (Accounting Today 2/15/10 issue and on WebCPA):
“When it comes to communicating your firm’s fees, don’t dish out surprises.”
I also appreciate Liz featuring my comments.
Are you explaining, clearly and concisely, your fee system to your clients upfront?
I can’t remember exactly where I heard it. It was many years ago from one of the leading consultants at the time (maybe Don Istvan, maybe not). The recommended process was to interview a potential client, filling-out a detailed application sheet, explaining the firm’s pricing policy and advising them that this process was to see if they qualified to be a client of the firm.
In more recent times, we have heard from MANY other consultants (including David Maister) that CPAs tend to take on any client, even ones they don’t really like, just to increase the size of their book of business. They do it for the money.
Here’s how Maister described it:
Professional or Prostitute?
You will get hired, rehired, obtain referrals and have lessened fee sensitivity to the extent that you care passionately, both about your work and your clients. Believe passionately in what you do, and never knowingly compromise your standards and values. Act like a true professional, aiming for true excellence, and the money will follow. Act like a prostitute, with an attitude of “I’ll do it for the money, but don’t expect me to care,” and you’ll lose the premium that excellence earns. True professionalism wins!
“There is a gigantic difference between earning a great deal of money and being rich.” – - Marlene Dietrich
Thanks, Rita – for always being such a good source of information and insight. And for promoting the story here! All my best.
What do we always say?
Communication
Communication
Communication
This is not only critical inside our firms, but also with our clients.
Our firm uses a ‘commitment’ letter at the time of engagement. The letter outlines the responsibilities of both parties. This past year this letter came in handy with slow pays/no pays. We presented the client with a signed copy of the letter and openly asked the questions “What did we fall short of the agreement” – “How can resolve this matter with DOHC”.
Having clear open discussions with our clients is definitely helping our collection activity!
Kelly – Thanks so much for the comment. This is an excellent practice and a great example of explaining fees to a client, clearly and concisely, upfront. – - Rita
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