Discussion:What fee should i charge to former colleague who asked me to help him out with his returns?
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Wkstaxprep (talk|edits) said: | 12 March 2008 |
| Hi everyone,
A former colleague of mine(borderline friend) from 5 years ago who also has his own tax practice and with whom i have kept in contact with over the past 5 years sharing tax season thoughts, discussing client fees, etc., mentioned to me after i sent him an email just saying hello, that he hadn't even gotten to any of his personals yet because he got back logged with corporate and partnership writeups and tax returns. He asked if I could somehow help him out. I'm more than happy to help him because he has been a great influence in helping me with my fee structure and increasing my revenue. I just took about 10 returns off his hands and he is basically outsourcing the returns to me. Question (drum roll) - what would be a fair fee for both of us? Even though I am happy to help him out, it is going to require me to reach into my reserve tank and find some extra energy I didn't even know i had, and he knows he will get a great product and just basically have to give the finished return to his client and get paid. I sure as heck don't want to get paid a per hour/diem going rate. I took the returns without discussing fees, only that he said don't worry i don't mind paying you at all. (probably a mistake right? but i am doing a favor so..) I am thinking the fairest method would be for him to give me a portion of the fee for each return. for example a $600 fee return he would give me $200-$250 flat fee for my services. I just don't know what percent would be fair. I have a feeling I will let him dicatate the fee and I just hope that I don't wind up not feeling good about what I did if he pays me very low - he gave me about 10 and he says he has another 10-15 if it works out, so i will also have to see if the fee comes up on the first ten and if i'm not satisfied then i will just tell him "i'm sorry but i can't take on anymore it's just too much to do with my own practice" Thanks for your time and any feedback. Will | |
| 12 March 2008 | |
| 50% of what he bills if all he needs to do is a minor review of the work you do. If there are wholesale changes and additional supervisory work is required, then naturally less would be adequate. | |
| 12 March 2008 | |
| Yes, I would say low end would be 1/3, high end would be 1/2. They are his clients. | |
Wkstaxprep (talk|edits) said: | 12 March 2008 |
| Thanks, I'll keep you posted what the final verdict is, he seems like a stand up individual, i was thinking 30% woould be the minimum he would pay, and 50% wouldd be high end.
right now, I'm feeling like 40% would make us both happy. | |
Tx-learner (talk|edits) said: | 12 March 2008 |
| Watchout! He is reading your posts...
Psychic@ | |
Wkstaxprep (talk|edits) said: | 13 March 2008 |
| That's o.k. I didn't say anything bad did I ? I hope not.
I just spoke to colleague advised him I already did 6 ou tof the 8 returns, and they are basically ready to be signed off on. He said just keeep track of my hours so he can me. I advised him I'm not keeping track of the hours I'm just really focusing on getting the returns done. If I get paid by the hour I will be vastly underpaid for the value i'm giving and comfor level that all he basically has to do is sign off on the return. Right now, I would be happy with 30%. How should I approach the fee topic before I take on the next set of returns? Thanks Will | |
Scottycoyote (talk|edits) said: | 13 March 2008 |
| hey its business..........nobody is doing this stuff for free. I would just mention it when you finish the first batch.....you want to do whats fair to him and to yourself. If youre doing 90 to 95% of the work, i dont think 50% of the fee is asking too much.....to me its a little low. Like you said youre having to find the time and energy to do them. It would be different if you werent busy. | |
Wkstaxprep (talk|edits) said: | 13 March 2008 |
| good point. | |
Southparkcpa (talk|edits) said: | 13 March 2008 |
| I believe you may have made a mistake taking the returns without a set fee.
In my view, you should have instilled in him the value you will bring and set a minimum fee of say $200 per return up to 50 percent. This way there is NO misunderstanding. As an aside... In my practice, I use one per diem guy and would never share the fee. I pay hourly $40 to $50. The value is in the client not the work. The per diem guy is not there year around answering calls, nurturing the relationship, reviewing pay stubs, mortgages along the way OR paying my $2,000 a month rent. Best of luck. | |
| 13 March 2008 | |
| What's wrong with billing him the normal hourly rate that you would bill your own clients? If I were helping a friend out or a friend were helping me out, I would do something along the lines of "my hourly rate, up to 90% of what you bill for this client" and if that resulted in me being underpaid, then I wouldn't do the next 10 - 15. The "up to 90%" keeps him from being cash-out for start-up time on what to you is a new client relationship. | |
Wkstaxprep (talk|edits) said: | 20 March 2008 |
| thanks for the feedback.
fortunately, it appears my colleague is doing the right thing and giving me a very fair fee for the returns. I have to respectfully disagree to some extent with southpark, i mean if i gave someone a few of my clients and he gave the return back to me in the kind of shape where i basically just had to call the client to tell him the return is done and even had review points/items to discuss with client from notes already prepared, i cant see how it would be fair to pay an hourly per diem rate (i think i'm objective here because i'm on both ends of the spectrum - i work per diem and i have my own practice) anyway, from the two retainers i got so far it looks like i'm geetting between 30-45 % percent of his fees. thanks again ! | |
