Thursday, December 9th, 2021

Increasing Fees

“Every year, review clients and decide who should be culled.” – Bill Reeb, CPA

If you have been at the grocery store lately you have probably been shocked at the increases in prices. I know I have!

Suppliers and companies are facing more costs of doing business such as increasing wages and benefits for their employees. So have CPA firms.

Some firms are notifying their clients about an increase in fees. It is time to notify your clients about a more significant fee increase this year than in past years.

One of my long-time friends from the CPA Firm Management Association has allowed me to share an example of their firm’s letter to clients, as follows:

Like many businesses, we are seeing rising expenses due to the
pandemic, changing laws, supply chain issues, and overall escalating
cost trends. Specifically, there have been dramatic cost increases
in sustaining our workforce, benefits, software, supplies and
technology.
In order to keep pace with these changes, we will be increasing our
fees. For the preparation of your 2021 income tax returns, our
minimum service fee will increase by a percentage range of 11% –
20%. This new fee is calculated based on the scope of your 2020
work. If the 2021 work includes extra complexities as compared to
2020, the fee may increase by a greater percentage. This shift in
pricing will also come with increased value as we hope to serve as
your financial and tax resource throughout the year.

It is better to let your clients know ahead of time rather than be surprised when they receive your invoice. Now is NOT the time to afraid of losing some clients.

  • "We have to up our game when it comes to managing our firms."
  • Bill Reeb

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