Policy on charging for nuisance calls or short calls

[SaraEA]

We recently had a client call with a trust question and told him to consult the attorney who drew up the trust documents.  The response was, "Well, he charges me every time I call, so I thought I'd call you instead."  What does that tell us about our billing practices???  Why do clients call us instead of the IRS (no 2-hour wait time), or the Social Security Administration (might actually require driving over there), or the motor vehicle dept or insurance company (hey, the notice has numbers in it--call the accountant).  This week we tried to set company policy about nuisance things we need to spend time on and should charge for, but we all got into the "well, he's old or confused" or " he doesn't have any money" or "he's been a client such a long time." that we ended up with no policy.  Just decided to charge when it gets out of hand, but by the time you realize that you don't have records of every 5 and 10 minute phone call for a "quick question."  How do others handle this?

[jklcpa]

I opened this subject and moved the above post from another unrelated topic so to not hijack it into a discussion of billing practices.

[rfassett]

We keep time sheets and bill monthly. Our time is kept in 10ths of hours.

[Catherine]

I have found the phrase "I'll have to research that one and get back to you plus bill for the time" makes lots of folks demur.  But it is always a judgement call.

One of my local colleagues starts every tax return with a $150 PITA fee.  IF they are not a PITA, and IF they have not pestered her with calls during the year, she discounts the fee.  And of course you can start with a smaller fee and discount as much or as little as you want.  So then it is built in to the tax return.  I have some folks who call with multiple questions every year; when I do their return I keep those calls in mind when deciding how much to discount from my standard per-form fees.  YMMV.

[JohnH]

The best defense is a good offense.  Deflecting nuisance calls & visits begins with getting them to use email and texting as their primary means of communication. If you don't start the process it usually won't get done.  I get the client's email and/or text number (depending upon which they prefer to use), and I find a reason to initiate a communication with them using that method early on. Now they have me in their contact list, so the natural thing to do is send me an email or text when they have a question at some later date.  

I also tell them that I return phone calls within a day or two, but generally respond to texts & emails immediately.   I'll reply to texts and emails after hours and weekends if it's convenient for me, but phone calls are generally during regular work hours only.  That sets the expectation that they will get a reply faster, so they tend to migrate toward emails & texts as the primary means of communication.  Sometimes my reply is simply "I'll look into that and get back to you", but that generally satisfies them that I'm on it.  And if the question is so complex that I actually need to invest billable time in the answer, it's easy enough to tell them that in the reply. Very few questions are actually that complex.

Getting clients to email and text also forces them to stick to the point and clarify their question.  If not, my responses asking for clarification serve that purpose without my having to listen to them ramble.  My philosophy revolves around the idea that I want to keep my clients out of my office and off my telephone so I can get some work done. 

 

Edited November 7, 2015 by JohnH

[Lion EA]

I'm doing more and more of what JohnH does.  Used to think I needed the face-to-face interview, but learned that receiving the hard copy and having hard copy of what I told them (well, electronic but printable if needed) is really more important.  I build a fee into my tax prep fee to cover those questions throughout the year.  I do want them to contact me BEFORE they do something with tax consequences, so I try not to bill extra.  I adjust their tax prep fee each year as I get to know their needs better.  If I don't feel used, the fee stays the same.  If I was feeling put upon during the year, next year's fee goes up.  Sometimes I detail the reason, sometimes something vague like Bookkeeping or IRS inquiry or..., sometimes it's just less of a discount or I refer to some tax law change when I talk with them.  But, I try to have only one bill per year so they feel like they are receiving service from me during the year as opposed to paying those 15-minute increments like their lawyer charges.

[JohnH]

One thing that fascinates me is how many older clients are very willing to communicate via email and text.  Yes, there are some who simply can't or won't get the hang of it, but the traffic runs heavily in the opposite direction.

And anyone in this business who isn't embracing email/text communication going forward is guaranteeing they will lose (or never gain) business with a large segment of the younger generation.  They may as well start planning an early retirement or a career change.

[MAMalody]

I am probably behind the tech curve, however, how to you archive text info and answers? Should I get with my grandkids and have them s how me?

[rfassett]

I communicate via email extensively with my client base. I charge them the same way I would charge a telephone call.

With all due respect to JohnH, I do not, and will not, communicate with my clients via text message. A very select few folks have my cell phone number. So when I receive a text or a call on my cell, I know it is non-business related and is probably something that commands my immediate attention. When I say "select few", I mean like maybe 12 people. And all of them know that giving out my cell phone number, to anyone, ranks among the gravest of sins. I have office hours with phones that have multiple lines and voice mail to capture any call that is missed because the lines are busy and/or the call comes in after hours. If I texted with clients, I have a sense that I am also giving them license to call my cell phone as well as text to it. And that ain't happening, I don't care how old school that may be. And if that attitude means I will soon be forced into retirement, bring it on.  But for the record, that attitude has not hampered the growth of my practice one iota.

We all have differently structured practices. That's what keeps life interesting.

Edited November 8, 2015 by rfassett

[Randall]

I am probably behind the tech curve, however, how to you archive text info and answers? Should I get with my grandkids and have them s how me?

For email, I wait until the questions/exchange is completed, then print/pdf the whole thread and save into the client file.  I don't use text.  It's not that easy to print and save the thread.

[JohnH]

I frequently save texts.  

The simplest way to do it on an iPhone is to do a screen shot & print out a hard copy or convert to a pdf and save it.

Not sure how that is accomplished on "lesser" devices.  

I'll stand by my assertion that bypassing the way younger clients communicate will adversely affect the potential growth of one's practice.  But of course the way this actually plays out depends upon the makeup of the client base.  And I definitely agree that we all operate differently. That's why this forum is so informative.

BTW, I don't give my cell phone number to EVERY client - some only get the email address.  It really is all about making distinctions.  Adding names to the contact list makes it easy to refuse unwanted calls to the cell phone. Just look at the caller ID and send it to voice mail. Most of the time they will follow up with a text.  

Edited November 8, 2015 by JohnH

[Roberts]

On 11/7/2015, 12:36:12, Lion EA said:

I adjust their tax prep fee each year as I get to know their needs better.  If I don't feel used, the fee stays the same.  If I was feeling put upon during the year, next year's fee goes up.  Sometimes I detail the reason, sometimes something vague like Bookkeeping or IRS inquiry

I agree with this 100%. There isn't a magical rule that says our fees should be equal for each client. Nice clients who ask lots of questions aren't charged at the same rate as jerky clients who ask a lot of questions. Everything is in perspective. My business is small enough to remember these things - if larger - just make a note on their return to remind you when you update the client list for the new tax season to charge $x more for X service.

[RitaB]

I put notes like "OMG" or "PITA" in the file and it all comes back to me come time to charge at tax season.  Actually, I keep pretty good notes of phone conversations, and put a hard copy of emails and text messages in the file.  Then adjust fee upward.  I don't explain why.  No, I never overcharge, so nobody complains.  I'm fine with that, too.

[SaraEA]

Texting with clients brings up lots of problems.  As others have noted, it means they have your cell number and feel free to call you anytime day or night.  People also expect instant responses to texts--wait five minutes and you get another one wondering what's taking you so long (even if it's 2AM).  And how secure are texts?  I know they are often used as evidence in criminal investigations, so they are definitely out there for someone to access.  I won't even let clients email SS numbers because no email account is totally secure.

We have a few clients who will call and, if they get sent to voicemail, immediately email and then text--all within 3 minutes time. I'm all for "bypassing the way younger clients communicate" if it means letting the "I want what I want when I want it" generation know they aren't your only client and that others might actually have a life that doesn't revolve around them.

I really like texting and finds it saves lots of time in my personal life. I'm just afraid that if I let clients do it I won't have a personal life.

[JohnH]

You raise some valid points, but I will reiterate this this really is all about how you manage communications.  I'm on a retirement glide path, so my experience won't be the same as that of others.  But I think I'd be doing the following even if I weren't scaling back.  I expect to eventually convert both business and personal entirely to a single cell phone.  One number for everything. I like the ability to communicate from home, the beach, in the office, or anywhere else I choose.  On my schedule and at my convenience. 

Managing the contact list is key because you can see who is calling before you choose to hit the "Accept" or "Decline" button.  Custom ring tones also help tremendously.  My total business and personal phone communication is probably 25% or of what it was just 2 or 3 years ago.  That is due somewhat to attrition, but mainly a result of persistently moving people to email and texting.  

I'd suggest a change of thinking about handling people's expectations.  There's no requirement that you respond on their schedule.  The response timing is still under your control - the process of choosing when to respond to a text is no different than choosing when to respond to a phone call.  On your schedule and at your convenience.

[Abby Normal]

I want to encourage my clients to call me before they do something stupid, so it's well known that I don't charge for 5 minute calls. Sometimes it becomes a billable meeting or research. Sometimes I just charge them more for their taxes.

[RitaB]

15 minutes ago, jmdaviscpa said:

I want to encourage my clients to call me before they do something stupid, so it's well known that I don't charge for 5 minute calls. Sometimes it becomes a billable meeting or research. Sometimes I just charge them more for their taxes.

Exactly.  Yesterday I had a client call, they had been dinking around online trying to find out about contributing to IRAs.  She told her husband, "This is stupid.  Let's call Rita."  Took three minutes and what they really needed to know was that they had until April 15, 2016 to decide, and I would be able to tell them exactly how much it would help them before then. I could hear the relief in her voice.  This couple has sent me three other couples over the years.

OTOH, there's that guy who stops in and talks for 30 minutes four times a year.  Two minutes about business.  Ten minutes paraphrasing five times what I said in the two minutes.  Eighteen minutes of, "So how ya been?" Gotta build in a fee for that stuff with him or I would be on the six o'clock news someday.

[jklcpa]

1 hour ago, jmdaviscpa said:

I want to encourage my clients to call me before they do something stupid, so it's well known that I don't charge for 5 minute calls. Sometimes it becomes a billable meeting or research. Sometimes I just charge them more for their taxes.

 

Yes, exactly this and what Rita said also.  I don't charge for calls that are quick either. Giving away a couple of minutes of my time is good client relations and builds goodwill, and the clients recognize that and send me referrals. Other reasons for that are because that 2-3 minute phone conversation will save ME headaches later by allowing a bookkeeper to record the transaction properly and will produce a better set of books for the client and for me, or that smart client that has found the correct answer and only wants affirmation. 

[JohnH]

 

22 hours ago, RitaB said:

I put notes like "OMG" or "PITA" in the file and it all comes back to me come time to charge at tax season.  Actually, I keep pretty good notes of phone conversations, and put a hard copy of emails and text messages in the file.  Then adjust fee upward.  I don't explain why.  No, I never overcharge, so nobody complains.  I'm fine with that, too.

I think I'm going to add another acronym to the notes I put in the client files, just in case the client sees my notes.

It's "What WIT !".

The translation is -> " What Was I Thinking (when I took this guy on as a client) "

[RitaB]

My new one is WWJD.  What Would JohnH Do?

[JohnH]

34 minutes ago, RitaB said:

My new one is WWJD.  What Would JohnH Do?

Formula for Success:

1) Figure that out

2) Do the opposite

3) More often than not, you'll come out ahead.