Fees during tax season

Should accountants be adjusting fees for services rendered during tax season?
Answer: Yes!

I was very tempted to end this newsletter right here. This would have been the shortest newsletter EVER.

Increasing fees for services requested during the months of March and April when we’re already extremely busy flies against what I keep saying about value billing. Many would argue that the value of a service rendered during tax season does not increase. At least according to how I try to determine the value of services.

So then, why charge more during tax season?

First, we must answer this all-important question:
How should a firm determine the VALUE of services rendered?

Well, there are a many things to consider. But the answer can be summarized in the following question:
To what degree are we providing a solution to a problem? 

The more serious the problem, and the better the solution, the more the service is worth. Most would totally agree with this. And most would also agree that this is based on the client’s perception.

If Bob doing his own bookkeeping is causing him sleepless nights and bringing him every day closer to a hearth attack and divorce, the value of the bookkeeping service for him is far greater than for Mary who simply dislikes doing her own bookkeeping. 

Does that change during tax season? Nope. Probably not. So how can one justify charging more during tax season?

Simple. Supply and demand. 

The value of the service rendered is only one of the metrics we should use to determine our fees for services we render. But if demand for our services is greater than our capacity, the price should increase. 

Does that mean we increase fees for monthly bookkeeping during tax season? Probably not. Or at least, I wouldn’t. 

How about those who want us to prepare their year-end financial statements during the months of March and April? Do we charge more for those? Whether I would charge more for that service would depend on a few things: 

  • Whose idea was it to have a year-end that requires financial statements be prepared during tax season?
  • Could the client have selected another year-end date that would still work with the nature of his/her business?
  • Could the information have been brought in BEFORE tax season? In other words, is the client requesting you do his/her corporate year-end financial statements during tax season because he/she failed to come in at a more appropriate time?
  • Is the request for services a result of the client’s poor planning and organization?
  • Is the extra work requested from you due to something that was in client’s control?

I doubt I need to tell you where I’d go with the fees in each of the above scenarios. My patience is greatly reduced with clients who needlessly add stress to my life during tax season. And with my lack of patience comes the cost of higher fees to bring my blood pressure back down. Funny how that works.

In conclusion, I’ve always felt very comfortable with charging more during tax season. Put differently, I’d be extremely disappointed if everyone’s effective rate in my firm wasn’t 10-20% higher than usual for those 2 wonderful, glorious months. Sure, beats the alternative which of course is to work tons of extra hours for the same money we make the rest of the year. Thanks, but no thanks. I love my clients. But I like me and my family and friends more.