When Clients Question Your Fees

There is hardly an accountant or CPA in Pennsylvania who hasn’t experienced a client questioning his or her fees. How do you best address this concern without alienating the client? Adjust your client’s perspective and your fee structure.

The old-school pricing scheme was to charge by the hour for services, estimating the cost of doing business and adding on a percentage profit you want to see.

This cost-plus method worked for a long time, but in our age of technology, that pricing scheme is completely outdated. With DIY tax services and an almost infinite supply of so-called “accounting advice” available on the internet, your clients need to know why they should pay you instead of doing it themselves or paying some cheap online service.

This is where you need to change the narrative: you aren’t an autonomous number-cruncher. You are an expert whose knowledge, wisdom, and insight cannot be replaced by an online calculator, an AI chatbot, or an unknown and anonymous virtual financial assistant.

Your customer probably knows that you use tax and accounting software that generates tax forms and business reports. They may argue that you shouldn’t charge so much because things don’t take you as much time anymore.

Don’t deny the use of technology; in fact, highlight how you utilize technology in your services. But communicate your value very clearly: that without your knowledge, expertise, insight, and intuition, those reports would just be numbers on a page.  

Help your client recognize that you are being compensated for your knowledge and expertise, not for number-crunching. The time saved by running a program to generate reports gives you more time to analyze the actuals, find additional tax advantages, look for opportunities for growth, or recognize red flags and dive deep into the numbers to reverse trends at the beginning before they affect the bottom line.

Ask your client to think about what matters most to them and what they hope to accomplish through your professional relationship. If they say they just want their taxes generated, then they may not need your services. It’s okay to let go of a client who neither wants nor recognizes your value as an expert.

But most clients will tell you that they do want the insight that you’ve pointed out. They also want access to you so they can ask questions and brainstorm. Some may want data-driven insights, strategic tax planning, financial management, or assistance with business expansion, though they may not know it.

It’s your job to tease the information out of your client by asking key questions and allowing your client to talk. Then, by restating their needs back to them in accounting terms, you can show them that you were able to internalize their needs, evaluate them from an accountant's perspective, and repeat them back to them with suggestions on how you could help. This would clearly demonstrate that you are worth your pricing, and even more. By this method, you have opened up your relationship to expansion into different services.

The answer is yes, if you can capture meaningful connections with a value-based or fixed-fee pricing model. Fixed-fee pricing is a great first step away from hourly billing. Offering low-, mid-, and high-range price points with packages that provide different services and different levels of accessibility, you are taking the first step away from being tied to an hourly wage and clients arguing about your fees. This upfront clarity in cost and services will minimize questions about fees.

Value-based pricing, however, is the future of growth for your firm. When you have that conversation with your client and find out everything they want or need in financial, business, or accounting services, you can get an idea of what matters to them. When you zero in on the values that matter most, you can present a customized package that highlights the values the client is most willing to pay more for.

One of those values is access. Studies have found that the strongest value that accounting clients have is access to their accountant. With value-based pricing, your clients aren’t buying a package of services; they are buying a relationship. They don’t have to worry about racking up more hourly fees when they pick up the phone, because you have already negotiated a service agreement that provides them with the outcomes they’re looking for and the values that matter most to them. You understand their goals, and you and your client are working together toward those goals.

It’s when you develop this kind of relationship with your client, having been set free from the hourly rate and stepped into a place of collaboration, that price becomes no object.