The end of the year is when many accounting firms decide it is time to reevaluate the way they handle business. One of the important aspects of your accounting firm you may want to be looking at right now is what you are charging clients for your services. Is it time to raise your rates?
One of the biggest concerns for many accounting firms is that they don't want to lose any clients due to a rate increase. To help your accounting firm make an informed decision about whether it is time to raise your rates, the Rules of Thumb blog from MoneyThumb has listed below legitimate ways to justify your rate increase to clients without losing their business and do it in a professional way that makes them feel your new rate is well worth paying. We have also offered some sound advice on how to go about announcing your rate in increase to clients:
Added Value and Increase Tasks Performed
Make a list of what you do for your client now and what you did for them initially. Spelling this out will help convince the client and motivate you. For instance, you may have started out doing taxes and have added services like business relationship consulting, handling payroll, or accounts receivable management. If that’s your situation, you have a clear cut case- the client is simply getting more than they were in the beginning.
If you haven’t added such value, consider it. Accountants everywhere are expanding their practices to incorporate many more services. By doing so, they’re making themselves explicitly more valuable to clients. Niche services and additional education and/or accreditation you have acquired are value-adds you may already be giving clients.
But aside from adding additional services, gaining experience is a value-adder in and of itself. You may have started out at a lower rate because you had little experience. If enough time has passed, that’s not the case anymore.
Passing on the Cost of Technology
If you have been in the accounting business for a good amount of time, then you have probably switched from manual to computerized accounting, and are using accounting software that you paid for. Also, there could be apps that you use to help clients, apps that they don't have to pay for themselves. The price of doing business online is more expensive than offline, that's just a fact. Clients will totally understand this and be on board for a rise in your rates based just on this fact alone.
How to Announce Your Raise in Rates
So you now have to solid ways to justify your raise in accounting service rates. But how do you tactfully and professionally go about informing your current clients without ruffling feathers? Let's face it, no one likes change, so this is a critical part of your rate increase, letting your clients know and having them agree to the increase.
MoneyThumb.com advises sending out an announcement newsletter and/or announcing your rate increase on your website, loud and clear, with the reasons above Make sure your message is positive and be sure to include language that emphasizes how happy you are to have added so much value for your clients over a given time frame. This way they will feel like a part of your growing success. Also, this approach will let clients know that it’s an across-the-board increase and that you’re not just targeting them.
Also reach out to clients individually- by email or by paper letter, depending on each business. Write them a personalized note thanking them for their patronage, but also detailing the exact value you have added over the course of your relationship. Focus on the positive- mention how their business has grown and let them know how you have been an invaluable factor in this growth.
Let Clients Know You Use MoneyThumb
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The MoneyThumb team would love it if you would share this blog post on your social media page so that your peers can take advantage of our sage advice.