Accounting Fee Increase Letter: Sample Template & Tips
Are you dreading the moment you have to break the news about an increase in your service fees to your clients?
It can be an uncomfortable conversation, even when you know the price increase is for their benefit. Especially for your longstanding clients, you don’t want to offend anyone or make them feel you take their loyalty for granted.
When it’s time to increase your service fees, how you communicate with your clients can make all the difference between whether they feel resentful or understanding about the transition.
Fortunately, there’s a way to craft a price increase notice that is respectful and straightforward, one which clearly lays out your new fee structure and the reason for raising your rates.
This article will help you discover how to communicate your higher rates with clients and includes a sample price increase letter you can use to notify them.
How to Determine a Reasonable Fee Increase for Your Services
There are many reasons why an accounting firm would raise its rates. It’s often an inevitable step most firms need to take at some point to remain competitive and profitable.
Here are a few reasons why your accounting firm may decide it’s time to raise its fees:
- You’re introducing new services or yearly packages.
- You’re hiring more contractors to share the client workload.
- You’re facing rising overhead costs.
- You realize you’ve been undercharging for your services.
- You want to offer a higher quality of service to select clients.
These are all justifiable reasons for raising rates, but the amount of the fee increase will depend on your reasons for doing so and, therefore, impact how you’ll explain it to your firm’s clients.
A great starting point is to assess your current fees and compare them against industry standards. Other components to factor in include the cost of living, market rates, inflation, technology changes, and the level of service you provide.
For instance, you may decide on a 3–5% annual fee increase to keep up with inflation and the overall market. Or, say you charge $470 for a tax preparation service, but you find competitors in your area all charge $500–$650 for the same service. This discrepancy may signal you’re undercharging, and you can decide to bump up your pricing accordingly.
No matter what fee increase you settle on internally, it’s essential to communicate the increase transparently to your clients and provide them with a clear reason why. Doing so allows you to manage your clients’ expectations and maintain trust in your relationship.
Free Template: Accounting Fee Increase Letter
When you’re ready to write your fee increase letter, you can either craft one on your own or use the free template provided here. Remember, you’ll need to customize the letter to detail your firm’s unique reasoning for increasing your rates.
[City], [State] [ZIP Code]
Dear [Client name],
First, we want to thank you for your continued loyalty and trust in our firm. You’ve trusted us with your business for [how long they’ve been a customer], and we plan to keep proving our value to you every year.
We are writing to inform you that effective [date], we are implementing a fee increase from [current rate] to [raised rate] for all clients due to [reason for increase].
As you know, we take pride in offering competitive rates while still maintaining the high level of expertise and care that you have come to expect from us. We understand that a price increase is never easy news to get, but we wanted to take a moment to explain the reasoning behind this decision.
Over the past year, our overhead costs have increased by 14%. These costs include software and technology upgrades, office space rental, and the continued investment in ongoing education and training for our team. While we have absorbed these additional costs thus far, we have reached a point where we must make this adjustment to continue providing you with the level of service you deserve.
Please know that we are committed to making this transition as seamless as possible for you. We value your business and appreciate your feedback, so if you have any questions or concerns regarding the fee increase, do not hesitate to reach out to us at [phone number] or [email address].
Again, thank you for your continued partnership with us.
Download Your Free Template
Click the link below to download the letter template. Select “File” at the top left-hand corner of the page, select “Download,” and then choose your preferred document format.
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4 Key Elements to Ensure Your Price Increase Is Well Received by Clients
Letting clients know your fees are increasing can lead to challenging conversations. As you can imagine, it’s never easy to learn that an essential service your business relies on is becoming more expensive.
You’ll want to handle this communication thoughtfully to avoid any backlash from your loyal clients, or worse, lose their business. Whether you write the rate increase letter yourself or use the template above, be sure you include the following elements.
1. Express Appreciation
Always include appreciation for your clients while maintaining a professional tone. Clients will feel valued from the start, and it demonstrates that you’re still dedicated to their satisfaction.
Expressing appreciation to your clients is vital throughout your relationship, but especially when you are asking something of them—like a price increase. It helps your firm come off as thankful and gracious.
Start your letter with a positive tone. You can even lay out specific instances where their business has been meaningful to your firm.
|“We appreciate all the years you’ve been in business with us and even recognize you were one of our first 100 clients!”
2. Give Enough Notice
You need to provide your clients with ample notice before the price increase goes into effect. Springing the price increase on your clients with short notice could harm your relationships and reputation as a business owner.
In many cases, it’s appropriate to inform your clients of your raised rates as soon as you decide internally, typically a few months before the higher price point begins.
This notice can help mitigate any client frustration upon receiving the letter. In turn, it gives them enough time to accommodate the increase in their budget or reassess their options if they’re already facing budget constraints and unable to afford the higher rate.
3. Be Clear
Offer a detailed explanation about how much your fees are increasing, when the change is going into effect, the reason behind the increase, and any other significant information you find pertinent. This clarity allows you to share your expectations while showing your clients what’s in it for them.
If your clients feel left in the dark, misled, or uninformed about the fee change and why you’re raising your rates, you could damage those relationships and maybe even your professional standing.
However, you also don’t want to sound regretful or unsure of the price increase, which clients may see as insincere. Avoid saying, “We regret to inform you that we are increasing our fees,” and focus on the positives instead.
When you provide a clear explanation for your clients, you can help avoid friction down the line and help them better understand your reasoning for raising your rates.
|“Starting at the beginning of the fiscal year, we will raise our fees from an hourly rate of $55/hr to $65/hr. In addition to investing in the latest technology to enhance our services, this fee increase will enable us to expand our team of experts and introduce new service offerings like tax planning and special advisory services.”
4. Welcome Further Questions
Once you’ve included all the above elements in your letter, be willing to accommodate questions to ensure your clients fully understand the pending fee changes. You can do this by providing them with contact details and information about when and where they can reach you for further discussion.
|“We understand you may have additional questions about how this fee increase will impact you after receiving this letter, so please don’t hesitate to reach out at (XXX) XXX-XXXX or [email].”
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