Discussion:Retainers

My practice pricing is coming along. I am looking at an account setup fee of $100 to review previous books, tax returns, get a proper chart of accounts set up, etc.

I also added a section in the engagement letter about back work to repair problematic clients and get them current and correct. I quoted a billable hourly rate of $60 but now that I am thinking about it--as a result of another poster's idea--I am thinking I will quote a minimum of 5 hours if the client is in a real mess (aka the shoebox client). If the client is fairly clean, I will go hourly.

Any thoughts? Will this scare away most of my possible clients?

This is going to be a side job to my 60 hour a week job I have now so going lowball on the pricing isn't my plan. I can forego the cheap accounts if it means I have time to do one or two moneymakers.

Thanks, Michael

Thanks, Michael

My experience with retainers: if a client is serious about getting the work done, they won't balk or walk. Their willingness to pay shows their commitment to getting the work done, and getting it done correctly. If they balk, explain that you always charge retainers to new clients because sometimes, after you've gone through all the work, it's possible they won't like the bottom line i.e. huge tax bill, and will wish to go elsewhere to find another accountant in hopes of getting a better "answer". You would like to protect yourself against such a situation.

I will add the non-refundable retainer to the letter. If a client comes in really clean...aka quickbooks files, etc. I might just waive the $100 setup fee as well.

I was originally going as a bottom barrel type operation looking to undercut everyone but realized that I would be busy as heck (I work a 60 hour a week job as it is) and not making any money. If a few walk, that is fine as long as I retain a few.

Michael