“It can be difficult to justify a rate increase when the client does not recall the quantum of services being provided by their accountant. Problems can arise when the engagement letter is out of date and not reflective of the services offered to the client. “The engagement letter can include a standard paragraph to alert the client to the fact that fees will change at some point in time, ultimately preparing the client for a future increase.
“Clients will be more willing to accept cost increases if they fully understand the value proposition being offered by the practice.
“It is inevitable that accountants will need to increase their charge-out rates from time to time to cover rising costs and maintain profitability,” Haste says. Some practitioners talk about the importance of getting the engagement letter right at the beginning, so as to enable increased fees.ĬPA Australia’s Josephine Haste CPA, Policy Adviser for Ethics and Professional Standards and Manager for Quality Review Education, is of the view that while the engagement letter must include references to fee structures (APES 305 Para 4.8), it is most important that the firm is able to communicate a value proposition to retain clients. The outcome often depends on how a fee increase is communicated – and whether it is perceived as credible. For practitioners, justifying the reasons for a rise is paramount because if you can’t, some clients will run straight to competitors.
However, sometimes there are very good reasons (operating costs, more staff, prices aren’t equal to services) for putting up fees – even though nobody is going to like it.
SAMPLE LETTER TO INFORM CUSTOMERS OF PRICE INCREASE FULL
With the Financial Services Royal Commission in full swing, there has probably never been a worse time since the global financial crisis (GFC) for practitioners to tell clients they are increasing fees.
0 kommentar(er)
