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We all have many types of clients with various fee arrangements, depending on the client and the nature of the work we will be doing. Early on we decided to bundle our services and charge a fixed fee, i.e., value price the relationship. We always left out some things such as tax audits, a one-time estate plan, a comprehensive financial plan or business valuation or work on a marital separation, and perhaps included some wiggle room for unanticipated services. But by and large we set a fixed annual fee, payable monthly, with bills sent or credit card charges made on the first of each month. This worked and still works in many situations.
Just exactly what are bundled services? I have a four-part response:
1. All of the basic and essential repetitive and compliance services the client needs. These are easy to anticipate and price. They include periodic meetings we would have and phone calls that were typical for this type of client. We never put a number or limit on this.
2. The necessary coaching and consulting that we knew the client would need. This was estimated based on our knowledge of the client and how involved we would be or become in their affairs. We would estimate the time and/or value and include this in our price.
3. Unlimited initial consultations on new ventures the client wanted to start or become involved in. We never want the client to hesitate to call us with these projects. This always gives us an inside track, especially when there would be partners with our client.
4. Oddball or creative projects we wanted to try, start or explore that had potential to add great value to our services and to the client. Sometimes they were fishing expeditions that led nowhere, but occasionally we hit something right on the head. While our initial work was always performed for no additional charge, sometimes it led to major projects or additions to our regular work. This also gave us opportunities to train staff in added services they would not ordinarily work on because we did not have to justify the time.
We priced the entire bundle as described without a breakdown. Sometimes changes were negotiated and sometimes the price was increased to take into account the client’s preferred way of doing business. On some (rare) occasions we have even included some of the extras that were not likely to occur often, such as tax audits. What we usually do with new clients is suggest the initial fee and then provide for a review of the entire relationship at the end of a year. Whatever we need to do to get the client and the “monthly” check or to keep the client happy, we did. What we did worked for us and the client.
Two highly recommended books on pricing are Ronald Baker’s "Implementing Value Pricing" and Dave Cottle’s "Bill What You Are Worth, Third Edition."
Edward Mendlowitz, CPA, is partner at
