An important decision to make as an accountant is how to maximise revenue from clients without scaring them off with extreme prices.
Some firms prioritise short term profits over long-term relationships, coming up with schemes to make money off clients. Eventually these clients realise they are being “schemed” and go elsewhere.
Increasing fees can also drive clients away. Some clients may stick it out due to painful process of changing to a new accountant, but even these may eventually leave.
Then again, some accountants are too lenient with their fees: by lowering prices they operating at a loss, too afraid to bump up prices for fear of losing the client.
It is essential to find a way to prioritise your business while still keeping your clients happy.
Cut costs by reducing audit work or developing a procedure that deals with low-level tax work which could be more profitable.
Find a few bigger big clients to boost profits. Bigger clients are less intimidated by higher fees. A company dealing with the Big Four accounting firms expects to pay high fees. If you are able to undercut the Big Four slightly, you can build your practice rapidly. Your customers feel they have got a bargain, and encourage word of mouth marketing – bigger clients carry more weight in the marketplace.
It is possible to find a balance between running a happy practice, making good profits and building a corps of loyal, satisfied customers.