Want to know how to announce a rates increase to clients without scaring them away? Regardless of how big your practice is or whether you’re a sole practitioner working solo or you have a full team of staff behind you, it is doable and it only takes 4 steps for you to do it right. Here is a foolproof 4 step process to raising your accounting fees.
1. Decide on what to charge
When thinking about how to announce a rates increase to clients, you first need to know how much you are going to increase them by. As a rule of thumb, practice owners should review their fee structure every 12 months.
To help you decide on what to charge for your services, a valuable exercise is to benchmark your fees against local competitors and similar-sized practices. While this shouldn’t dictate how much you charge, it can be useful to make sure that you’re not undercharging for your service offering and that you remain competitive.
2. Identify which clients need the increase
Once you have decided on your new fee levels, you now need to look at your Client Portfolio Analysis and identify which fees you need to increase. Does your whole client base need to increase or is it just a handful of clients?
If you have a quoting tool (you’ll have to do it manually if not), use this for each client to work out what their fee should be. This allows you to identify each client that needs an increase so that you can start making an action plan to implement them.
3. Start using a quoting tool for new clients
You want to get every new client that you win onto your new higher-fee pricing model, so in order to do that, you will need to use your quoting tool. Negotiating a fee increase is never easy later on so from the get-go, you need to use this tool to work out the rate for the client.
If you use your quoting tool in the initial meeting with the client, they can see how it is calculated and they will be much more likely to accept the rate as is. If they try to negotiate, stay strong and highlight the benefits and value that they will get which are reflective of the prices. You don’t want to be making deals from the start otherwise they will come to expect it!
4. Prepare and have the fee increase conversations
The last step of the fee increase process is how to announce a rates increase to clients. This is one of the hardest conversations that any accountant will need to have, but with the right preparation and feigned confidence, those phone calls or face-to-face meetings will most likely be a success.
Here are a few tips when it comes to having the conversations:
- Create an action plan for each client.
- Think about potential objections that each client may have and practice your response to these.
- Focus the conversation on the benefits and value you can give your client not the money.
- Pick clients who you don’t mind losing as your first few conversations.
- After the conversation, follow up with an email or letter outlining the changes and benefits to the client again.
- Refine and improve this process once you have implemented a fee increase. (Read how to implement a fee increase in 10 steps)
Need help with writing an engaging letter? Download our accounting fee increase letter sample here.
Increase your fees one step at a time
Every accountant who has put their fees up is always worried from the onset that they will lose too many clients. The reality is, however, that they will lose at most a handful of clients but gain a significant increase in their net profitability.
Now you know how to announce a rates increase to clients so nothing should stop you. Take it one step at a time (there are only 4!).