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I hope this is not an “off-limits” topic, as I couldn’t find anything about fees and fee schedules. Background…I will kick-off my tax preparation business this year, got a few tasks to complete before I am up and running, however, many of my potential tax clients seem to be in more of a need for budgeting and cash flow management. This lead me to find AADMM and now I’d like to include these services strongly into my tax preparation business. Most of my clients will be low to middle class income and most will be living paycheck to paycheck, qualifying to EIC and struggling to even think about contributing to a retirement plan.(I don’t hang with the rich crowd…lol) I WANT to really help them by budgeting their money, monitoring their spending, and helping control their cash flow. I do this anyway with my daughter. Now…here’s my question. How much are these services worth? How much do I charge? How do I charge? hourly or by the service? I’ve tried to crunch numbers with estimated time committed for budgeting, monitoring, paying bills, etc and I’m afraid that I will be unaffordable for many of these people. Many of these could become tax clients, of course but I don’t want to be working all year for a tax return fee. I’ve thought of charging by a percentage of their net earned income….which would mean I’m practically volunteering services for those at $20,000 a year but as they become more financially solid, I may have secured a long term tax client that could be making $50,000 and “might” even keep me on as the DMM just to help stay on top of cash flow and financial stability. Sorry for the long post. Still at the business plan stage really… Any help would be appreciated. Even someone that would voluntarily mentor me!! That would be great! 🙂
Lisa Cooley
lisa@triforcetax.comHi Lisa,
I am very interested in this topic and don’t think it is off limits, but I will defer to other DMMs on that 🙂 I am also exploring how to offer DMM services to lower income clients as there is quite a need. One DMM recently shared that she was able to write a grant that covered DMM services for seniors in her area with no cost to clients. Last year, I was approached by the Dept. of Human Services about helping a client (60+ with cognitive issues, but working part time) who couldn’t afford my fee but they had no one else. They contracted with me to provide up to 10 hours to help set her up and then they would assign a caseworker or volunteer after that. I am now a vendor for this program under “Caregiver Services and Resources”
In Dane co where I live, I am able to refer people (of all income levels) to the financial education center for credit counseling, budgeting, etc. https://fyi.uwex.edu/danecountyfinancialeducationcenter/ and once they have their finances under control, I may get a referral to help with their actual DMM work. It is important for me to be clear about my fees upfront and some people do say that they cannot afford to pay me. It would great to have an option where I could refer them to a reputable program that would provide quality DMM services with costs defrayed by another source of funding. (AARP used to do that but has discontinued in WI). It could be great PR for AADMM to be a resource for those individuals who need DMM services but can’t afford to pay if we could make this type of referral.
Just my opinion here but I don’t lower my fees for clients (although I do have a professional courtesy fee for clients which is $10 less than my usual rate.) I also may offer my minimum of 2 hours per month and limit the amount of work I am able to do for the client, but it’s their choice. And sometimes when they see how I actually save them money, they elect to add more hours. I stress that we are professional in our work and provide valued services with E&O insurance, so my fee takes that into consideration. I’m very interested in hearing other opinions on this topic. Thanks for sharing Lisa!Barbara Boustead
barbara@marysdaughterllc.comLisa, Recommend you use the search feature to find previous discussions in these forums about “Fees” … you will find several responses to a similar question that should be helpful for at least part of your query.
Good luck!
Roxanne Cheney, LLC
thank you for that suggestion to search. I spent some time exploring the search results and found some good ideas. Seems like most are charging based on hourly rate and time spent. I still have much to consider and lots of figures to crunch. I’m still leaning toward the idea of a percentage of my clients take-home pay when I’m monitoring cash flow and budget monitoring….however, I’d still like to make sure that its not unethical or illegal to charge based on income. I consider this value-pricing in a way. Maybe for elderly clients that I perform bill-paying services form might be charged by the hour since I’m not necessarily setting up budgets or cash flow monitoring. I got me some more thinking to do! lol
Lisa Cooley
lisa@triforcetax.comWhen I first started out, I took a class on owning one’s own business that I felt was very helpful. It was sponsored by SCORE (volunteer retired executives) and I see that the chapter in your area has a class on entrepreneurship and starting a business. That might be something helpful to at least get you started with the types of questions to ask yourself that might also address some of your pricing options. Your local chapter is: https://louisville.score.org/
Thank you! I just filled out a request for a mentor at score. Thanks for that direction.
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