So, picked up all the paperwork to complete a great big meaty tax return ( you name it's got it) , agreed price , letter signed etc , etc... Then just as I am finalising the tax return and calculations I start to get emails "oh, I forgot to add this, change this blah blah blah"
So, what do you all do? Say fine, smile no problem or suck in your breath and say "ooh that's a pain I've nearly finished so I will have to charge you more for the corrections/changes"?
Two things: If there are contingencies in the agreement to charge more and the sources of income and reliefs were clearly set out, then the simple answer is Yes, you can charge more. A friendly hint of this will test the water if he's likely to be understanding or will turn ugly.
With it being a meaty job; is there the possibility that it would lead to further duties? Say - accounts - bookkeeping - payroll - VAT etc. If so, then you could expect the same scenario and any new agreement should emphasize the time spent. Put it down to experience with a plain statement that you have not broken even or made a loss on the job.
I had one at the other end of the spectrum drop by the other day. I don't think his business will last and it could become time consuming. In my case it was easier to turn down the job.
No there won't be any possibility of further work, just the tax return each year. ..... It has made me think though that I should rewrite my letter of engagement to cover this scenario in the future. Just how to say it without sounding a*** will be difficult though.
This kind of thing happens quite a bit with the messier clients, obviously if the banks are reconciled then you would hope everything will hang together but it's when stuff is paid out from cash or other sources that this can happen more frequently. I normally put it down to goodwill but mutter something so they know it's an inconvenience if I have agreed a fixed fee however if there is an element of hourly rate then it gets added to the bill. Most of my stuff is fixed fee however!
Learn from it, list the kind of things that appear late and when checking through the books remember to ask for those kinds of things too.
Tim makes an excellent point in this is a chance to have a further meeting to see what other services/additional value you can add (monthly management accounts?).
I generally look on the first year as a loss leader as clients will always manage to somehow surprise you (especially with any sentence that has the word "just" in it).
The first year gives you a feel for the client and the second year you quote based on actual rather than assumed knowledge of the level of work that the client will take.
Also, with the first year there is always a learning curve which would be unfair to burden the client with.
I've found that once you know the client and they can see what you can do for them then they are more understanding of a rise in rate.
I would not increase the rate after signing the engagement letter if I had any intention of keeping the client.
All of the above said, one of my clients has changed from a loss leader to retaining them through morbid curiosity. I like to think that once established having one pet project where it makes no financial sense to keep them but you do because you are just trying to fix them for you own piece of mind is not too unbusinesslike.
I certainly would not however keep a pain in the proverbial that I didn't like.
All the best,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
