Rate Increase Notification
This year, I increased my rates to $250 per hour from $190 last year, reflecting the cost of living in my medium to high COL area. The client signed the engagement letter acknowledging this new rate.
The client is retired, receiving investment income, and has a K-1 that produces non-resident income in another state, which involves filing two state returns. He also requested a quick projection for the upcoming year. He switched to me from HRB five years ago after they mishandled his non-resident state return.
Last year, I charged him $800 for my services, and this year, the charge will likely be a bit higher. However, when he dropped off his documents this morning, he made some comments that suggested he thought my fees were excessive, which left me feeling frustrated.
At this time of year, it’s normal to feel fatigued, and I truly value clients who express their appreciation. I’m considering completing his return, and when I send the invoice, telling him, “Based on our conversation this year, it seems we may no longer be the best fit. You may want to look for someone else for your 2025 return.”
He is one of only two clients who have expressed dissatisfaction.
One response
It sounds like you’re in a tough situation, and it’s understandable to feel frustrated. It’s important to recognize your worth and the value you provide to your clients, especially in a high-cost living area. Before making a decision, consider the following:
Reflect on the Value: Remind yourself of the expertise and reliability you bring, especially in correcting the issues he faced with HRB in the past. You’re providing a valuable service that can save him time, stress, and possibly money.
Communicate Openly: Instead of making a decision to drop him, perhaps have a candid conversation with him about your fees and the value he receives from your services. Sometimes, clients don’t fully understand the reasoning behind rate increases or the complexities involved in their returns.
Evaluate the Relationship: If he continues to express dissatisfaction despite your efforts, it might be worth considering ending the working relationship. However, do this thoughtfully and professionally. If you decide to move forward with his return, you could mention that you are re-evaluating your client relationships and that you may not be the best fit moving forward, especially if you have clients who appreciate your work.
Focus on Positive Clients: It sounds like you have clients who value your service. Make sure to invest your energy there and seek out more clients who appreciate your expertise and are willing to pay for it.
Remember, it’s your business, and you deserve to work with clients who respect and value what you do. Good luck with your decision!