Accounting Fees

Accounting Fees

…Actually, any type of professional fees. Accountants, lawyers, physicians and even plumbers’ fees – many clients complain they are too high.

Surprise! They are not too high. If they were, then many would retire much earlier than they do, take more vacations or have bigger houses and more expensive cars. Professionals usually earn good livings, but that is what they are – a living. Would you trust your work to a professional that did not earn a decent living? I think not!

The problem with fees is that they are for services, not for tangible products that many times can be compared to similar products widely sold in many places.

What is a service worth? I also know that it is difficult is compare two professional’s fees for the same deliverable. Let’s take a lawyer’s one-hour consultation. One charges $200 and the other charges$600. Would the advice be the same making the service a commodity thereby making the attorney with the $200 fee the better value? Well, suppose the lawyer charging $200 has very little experience in the issues discussed while the lawyer charging $600 is a recognized national expert. Wouldn’t you think the attorney with the higher fee would provide better guidance than the lawyer with the lower price? Suppose the consultation was for a life altering strategy; wouldn’t you want to meet with the most experienced attorneyrather than the least expensive?

With respect to tax returns, two accountants can deliver the exact same return, while one charges $800 and the other $1200. Might you think the accountant charging the $1200 was priced too high? However, suppose I tell you that the lower-priced return was prepared after the information was mailed in with a brief call by the accountant, while the higher-priced return included a meeting with a CPA that resulted in suggestions to change the client’s investment configuration to make it more tax efficient, some tips to give charity in a more efficient manner, advice to open a one-person 401k to shelter consulting income in the current year, and a heads up to sign up for their employer’s cafeteria health plan for the next year. The return is the same. The advice is not! You evaluate the fee based on value received. Perhaps the fee for the $800 return should have been lower, while the advice provided should have been priced higher. Either way, professional services and fees are not necessarily subject to comparison.

I suggest that every bill you receive be considered a value bill. Consider the value received and either shop around for a new professional or be glad you had access to a great professional at a bargain price.