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Accountants work long hours and regularly go the extra mile to help a client in need. They also wonder how they can sustain high levels of service within a fee envelope acceptable to clients.
Accountants in the early stages of Practice ownership rightly prioritise building their business and are competitive in setting fees, usually offering incentives to attract new work. When a client relationship is firmly established, along with a positive record of delivery, accountants then look to negotiate an uplift in fees to secure desired margins.
But what happens when a client pushes back?
Thankfully, there are strategies accountants can use when a client is looking for a reduction or refuses to accept an increase in fees.
Clients need to feel they are getting good value
Negotiating a fee with a client is not a ‘zero-sum’ game. A successful negotiation will leave both sides feeling they have gained something from the process. Most clients are not interested in the detailed work accountants undertake on their behalf and place more value on the personal relationship they have with their accountant. A simple measure an accountant can take to create the capacity needed to support clients is to outsource routine tasks such as bookkeeping or accounts preparation. The client will not see any difference in the technical accuracy or timeliness of delivery of work but will see an improved, personal relationship with their accountant.
In this scenario, both the accountant and client obtain value from the negotiation. The client will see an improved level of service and the accountant can justify the fee level by providing more personal support and timely advice.
Ensure fees reflect the value of work to your team
When negotiating a fee, accountants need to emphasise the value individual tasks contribute to the overall client experience. While it may be tempting to offer certain services such as bookkeeping or payroll at a lower cost to a client, the individual delivering those services may feel undervalued and that their work is somehow less important than tasks delivered by other colleagues. By nature, individuals need to feel their work is important and valued appropriately. Accountants should therefore be cautious when offering reduced fees.
From the client side, if they are able to negotiate reductions in fees, they will feel they could have secured even more from the request and wonder what more they could achieve by way of reduced fees or free services. When negotiations occur in the future, they will use this leverage as a matter of course.
Accountants who consistently undervalue services risk staff burnout, dissatisfaction, and lower profit margins over time. Whatever the fee negotiated, it needs to ensure the long-term sustainability of the business in terms of people and finances.
Promote the value added by accountants work
When clients are looking to negotiate a reduction in fees, accountants can highlight the positive attributes they bring to help clients succeed, including:
- Professional expertise and experience
- Quality and timeliness of work
- Positive customer experience
- Competitively priced services.
Compromise means keeping your most valued clients
A client may have a limited budget due to short term circumstances such as reduced demand for services or market forces. Accountants are often reluctant to lose a client regardless of the length of time the relationship has been in place. A compromise can usually be reached to agree changes in payment terms to monthly or quarterly or even a reduced level of service, such as reduced support or longer turnaround times for work.
By listening to a client and taking appropriate action, accountants will help build goodwill and loyalty for many years.
Consider new ways of delivering services for a reduced fee
While accountants look to set fees to deliver reasonable margins, many fail to review the way services are delivered to achieve the same objective. The automation of tasks and embedding of cloud-based software provide scope for changing the way services are delivered. Outsourcing services to an offshore provider can improve service delivery using the latest technologies.
In terms of the services an accountant may outsource, the work does not need to be confined to transactional areas such as bookkeeping or payroll. The outsourced accountant can support the onboarding of clients and provide continuous feedback on the services a client might need, such as tax or specialist advice. Outsourcing can help accountants look forward and support the real-time reporting needs of clients, adding value to the work of the onshore team. Outsourcing work helps accountants provide professional support and expert advice without increasing the permanent establishment of a Practice.
Accountants could also look at incentivising clients to undertake some tasks themselves and remove them completely from the scope of work. Advances in cloud-based accounting software, mean many clients are comfortable maintaining their own accounting records, requiring the support of an accountant only at key points in the accounting period.
Relying on clients to prepare basic accounting records can lead to peaks and backlogs of work at key points in the year when VAT returns need to be filed, or year-end accounts prepared. However, outsourcing such tasks can create the additional capacity for more direct contact which adds value to the client relationship.
Conclusion
Using an offshore supplier is increasingly becoming the normal way of doing business for UK accountants. When looking to negotiate increases in fees or considering requests from clients to reduce fees, outsourcing work help implement strategies to delivery objectives for profitability and positive client relationships.
Unison Globus UK’s outsourced tax, accounting and payroll services are suitable for all client engagements – from sole traders and micro businesses to large companies. We provide a free trial of up to 10 hours of accountant time, with turnaround in 72 hours. If you’re looking to outsource services for the first time, increase margins, and help your clients, you can book a video call with one of our expert advisors or email us at [email protected]
