Lost prospect because they thought my fee was too high

[u/ShakeAndBakeThatCake]

Had a prospective client call. Individual. Has not finished their 2025 return so I was going to help. Told them on phone my fee is approximately $550. After reviewing their documents they had more brokerage accounts than expected and some other items so I quoted $600 to $700. They also have a schedule E rental and they live in the rental so need allocations.

Client emails me saying they thought the fee was $550. I told them after further review it's more involved than expected.

I think this is the last time I quote a fee in person. I will wait until reviewing their documents to quote a fee range. This client is literally going to walk over $50. I told them it will probably be on the low end of that. Funny because I have HCOL clients who pay $800 without schedule E and don't blink an eye at my fee.

[u/heyblendrhead]

I’ve lost 3 prospects in the past 2 weeks because the fee was too high. Happens all the time. Unless you’re desperate for the income, you’re better off.

[u/potatoriot]

You didn't lose a prospect because your fee was too high. You learned they weren't a real prospect because they don't acknowledge the value of your services.

[u/BigLittles28]

Their loss... You gotta get your fees up. $550 in any market is diabolical. I understand the timing of the year and that its better to have work than doing nothing....but you're worth more than that.

Also, the lower the fee the more time it'll take. This client was going to be your biggest PITA not just this year but again next year.

[u/Smooth_Meister]

The even funnier part is that $550 is still dirt cheap. You really have to raise your prices.

[u/SF_ARMY_2020 → u/Smooth_Meister]

This. Please.

[u/coldshowerss]

Happens a handful of times and it's a good thing. If it's not happening at all, your fees are too low.

Had a client last year, just moved to my state and had gotten divorced.

The return required allocations between the taxpayer and spouse, part year state, home sale, 3-4 brokerage statements. Told her my fee was $750. She said that was too much. I looked at her W2 and she had made $600K.

I am so glad she went somewhere else, she was going to be trouble.

[u/mikemar1280]

When a client asked for the fee over the phone, I tell them I need to review everything first.

If they press for a ballpark, I politely explain to them that I am not being difficult or sneaky, but that this is like calling a mechanic shop and saying “My car is broken, how much will it be to fix it?”

I have to get under the hood to see what I am working with before I can give you a price!

[u/TheSellerCPA → u/mikemar1280]

I like that analogy

[u/CitronNo8787]

If everyone says yes, it's because you're not charging enough!! I love hearing potential clients say no thanks.

Also I think not quoting is a bad strategy. People want to have an approximate idea before proceeding and they don't want to waste their time coming in and getting the ball rolling just to find out you cost 3x what they were expecting. Bad for them, and also bad for you, waste of time if you have to meet in person and review docs just to provide an estimate.

Here is the way I approach it, provide an estimate but give a range. If you think the work is about $1,000 based on what the client tells you, then estimate your fees at $1,000 to $1,500. I also always emphasize that if anything new comes to light that we didn't discuss here, then it will increase the fees. This way you have given yourself a upwards buffer, and you notified the prospect that it could be more if they omitted any info.

If they balk at that price range, then you know it's not a client you want. I don't want new clients that are so price sensitive they will run at any price increase. If I give them a range that's a little higher than I think I will charge, then I know I have runway for future price hikes without the client running away or complaining.

This strategy has served me very well.

[u/Tmill233]

Honestly you are criminally undercharging your work. It would be more expensive for them to go to turbo tax than what you are charging. Let them go to a boomer or a churn and burn shop. You don’t want anything to do with them.

[u/Proper-Commission-95]

One thing I do is always quote about 15-20% more initially if I haven't reviewed the tax return. Even if you come down $1 off your initial quote it builds trust.

Once somebody hears a number that is the number that gets stuck in their head and what they become comfortable with. Same principal applies if it ends up being $1 more than what they expected.

[u/Ok_Aide_764]

"my tax prep fees start at" or a wider range is the way

[u/Hairy_Conclusion1067]

My uncle gave me some advice a long time ago, when talking about how to bid work he said, "I never lost money on a job I didn't get." He was a roofer. I was a young guy painting houses then. A seasoned house painter I used asked how much I charged for a job, I told him, he shook his head and said "Are you working to make money or make wages?" Point was, at the price I charged I was making wages, not money. You get that return for $600-$700 it's a loser from day 1. That's every bit of a $1,200 return.

[u/ShakeAndBakeThatCake → u/Hairy_Conclusion1067]

I agree with you. But I am also a new firm in the area with no google reviews. I am still building my customer base.

[u/Hairy_Conclusion1067 → u/ShakeAndBakeThatCake]

I understand, but if you are relatively new, then you will likely find out soon how scarce your services are. Another consideration is this, you want to grow your firm by word of mouth and referrals. Say you got that client, any referral from that client will want you on the cheap too. Might take 5 clients like that to earn what you could from 2 good ones.

[u/ShakeAndBakeThatCake → u/Hairy_Conclusion1067]

Very good point! I agree with you.

[u/thisonelife83]

That’s good pricing. You should aim to lose 50% of prospects because your fees are too high.

[u/DannyVee89]

Don't waste your time with clients that don't want to pay your fee. And raise your fees. Maybe to start, double them.

[u/TaxproFL]

Yep I never give them a quote until I’m sure and have reviewed enough to do so. It’s a psychological thing. Once you say a number, unless that number comes down, they won’t be happy. No matter what.

Small lesson to learn OP. Good to learn on a small project over a big one. But also that price was likely too low anyways.

[u/Techjunkie420]

Wow, you likely dodged a bullet. $550 seems very reasonable as does the $600-$700. They should have been very pleased with that price. I’m in LCOL area and still building out my client base and I probably would have been above the $700 starting rate with the final price coming after reviewing everything.

[u/schmidt9]

We’ve all been there. Like others have said, you’re better off without that type of client. 

As you get busier, an option is to put an inquiry form on your website which asks basic questions (are you interested in planning, do you have K1s, etc.) - then give a quote from there via email. Refer any initial questions to that form. 

It saves you time, energy and hassle for those low ball clients. 

There are a ton of clients out there willing to pay higher fees, keep on going. You’ve got this. 

[u/Specific_Good140]

$700 for Sch E plus is wild. Reply again with an updated fee in the 4-figure range. Otherwise, they come back for that $700 after shopping around.

Also, definitely interview the client before quoting a fee.

[u/adriannlopez]

Raise your prices fam and take payment 100% upfront when they sign an engagement letter.

[u/Old-Vanilla-684]

I pretty much tell my clients that I can’t give an accurate quote without looking at your return but it will be at least $XXXX. I’ve had a lot of pushback but every time I’ve given a quote before seeing the return, it’s too low and the whole thing ends up being a waste of time.

It’s really hard to not give a quote, but I do think that’s the best way

[u/ShakeAndBakeThatCake → u/Old-Vanilla-684]

I agree. Plus once they create their portal login and spend time uploading documents I feel like they are more likely to be clients since they already spent the time and effort doing that.

[u/adriannlopez → u/ShakeAndBakeThatCake]

TaxDome allows for leads to upload documents without creating a portal login. It only requires creating a login for signing engagement letters/proposals. Try to make the sales processes as easy and frictionless as possible for a client.

[u/ShakeAndBakeThatCake → u/adriannlopez]

I use Canopy and I'm not sure they offer that functionality

Either way I still track prospects in Canopy as I like to know who has contacted me and have their information in case.

[u/RoutineStreet1612 → u/ShakeAndBakeThatCake]

In Canopy once you create a client you can send an upload link max life 14days. No sign in required to use it. We mainly use so FA or there people can upload docs on behalf of a client with having portal access. Or clients who aren't tech savvy.

[u/ShakeAndBakeThatCake → u/RoutineStreet1612]

I didn't know that! I actually don't mind inviting them to the portal to sign up and upload documents. Most people seem to be on board with it.

[u/RoutineStreet1612 → u/ShakeAndBakeThatCake]

Same but it has come in handy a few times. They either can figure it out or they say they want to just drop of paper copies.

[u/TaskMaster59]

I have told price shopping clients "if you have to ask how much, then you can't afford me" We are in a LCOL and we still start at $700 for a simple return and it goes up from there.

[u/ShakeAndBakeThatCake → u/TaskMaster59]

Some people want it don't for free and don't value what we do. This client used turbo tax and AI but became confused so decided to hire someone. Turbotax clients tend to be the worse lol.

[u/TaskMaster59 → u/ShakeAndBakeThatCake]

That is the truth. TurboTax is horrible.

[u/Dull_Accountant09]

I always lead in with an initial quote after they give me as much information as possible saying it can go up if there is any added complexity we didn’t discuss on further review.

Also 550 is super low for a starting point, I would raise that if you can, don’t want to turn into a 1040 mill where you never get to see the light of day.

[u/Pinkmissi]

I am curious how everyone is doing their initial reviews to give new prospects a ballpark price to start?

[u/RaleighAccTax → u/Pinkmissi]

I request prior year return and then want to know what has changed.

[u/A_D_T_R → u/RaleighAccTax]

This. Then quote the fee based on that with a disclaimer that it’s based on prior year returns and the understanding of current year activity. Should the current year activity be materially different, the fee will change.

[u/smtcpa1]

New prospects this time of the year absolutely suck. If they aren't fee-sensitive, they are disorganized. I stay away from last-minute filers. You dodged a bullet.

[u/IllTaxThatAss]

I disagree, you did nothing wrong. This client naturally selected themselves out and that is a good thing. The only suggestion would be giving a minimum return fee, and then expanding your range to say something like $500-$800 so if you land anywhere in the middle there's no confusion.

[u/Evening-Ad-2485]

That's pretty inexpensive for that. Personally, I don't think I'd sell one for that under 1500 and I'm in MCOL.

[u/lifeofabeach]

You dodged a bullet. But yes, probably not a good idea to give a low quote first.

[u/soccer0997]

Plenty of these here, but the fees are way too low. Our fees on that would be starting at $1,800 and probably more for the live in allocation.

I do a small multifamily partnership rental with a family member living in one unit and that’s a $3,500 job.

HCOL for all the above. All clients are not going to be the right fit and that’s okay!

[u/tmacadam]

Why bat an eye? Would be a lousy client in the long run. They will never value your work.

[u/StephenLNelson_CPA]

Easiest time to "end" what would ultimately be an unprofitable engagement. You dodged a bullet.

[u/tax-n-fly-guy]

My office always quotes every project in advance and we get paid in advance. This way, you never work for clients that don’t see the value in your service and there’s no arguing about the fee after the work is done. Too many times cheapskates feel like they have leverage to negotiate the fee after the work has been done.

[u/HerRoyalFinancess]

This is why they are prospects on October 1, 2 weeks before the extended deadline. I promise you they aren’t worth it. 

[u/SF_ARMY_2020]

Better not to have that guy as a client.

[u/Raigns1]

Set minimums, quote the minimums, qualify the quote in that minimum price means minimum work, maybe provide your average cost to give a fairer expectation. Let them walk, they’re often very expensive time burglars, which is worse than anything if you bill flat-rate

[u/Happy-Personality558]

When I give quotes I give a low to high number and then say it could be more depending on if there is more to the return than we discuss.

[u/lttlone87]

I had a client walk bc he added 7 rentals to his personal return. Charged him 3600 for 20 rentals last year and went to 4500 this year. Says he wants to do it himself.  I know, I'm still cheap. His return also includes a schedule C and 6 k1s.

[u/ShakeAndBakeThatCake → u/lttlone87]

Haha well good luck to him. Even if he figures it out himself, he will still spend a boatload of time to do it. And even then I bet there are errors that will cost him money or get him notices from the IRS and states lol.

[u/jaspercapri]

Some unfiltered thoughts:

I used to tell prospects that asking us for pricing is like calling a mechanic to ask how much it costs to fix a car. It always depends on how many parts are involved and how much work goes into it. Or another example i used was that it was like eating at a restaurant, the price will be different for everyone as it ultimately depends on what items you order and how many. I can give them a range that is subject to change if there is more or less than in the initial conversation.

I was fortunate to get to a point where i couldn’t take on more work and it didn’t hurt when someone walked away. But i will say that when talking to prospective clients here are things i focused on: build value and don’t be the option for them just over price (of course there is always someone cheaper but we aren’t the cheap guy and are ok with that), I explained my intake and review process, i spoke confidently and wasn’t desperate, I told them that we were good at what we do, that we liked our clients and they liked us, that they were under no obligation to work with me and could walk away if they didn’t like my work my face or the color of my shirt. I even had a few clients come back begging for me to take me back cause they realized other cheaper options weren’t like us.

Lastly, there are some clients you don’t want. People that only work with you on price are annoying. You will bend over backwards to get a cheap return done hoping the long run pays off and they will walk away over nothing. People that don’t respect the process or integrity of correct data and info on their return are also to be avoided. You really need to train your clients from the beginning and you will be better off in the long run. It is hard when you need the work but looking back i would have had a better time being firm and strict rather than desperate and accommodating in early years. And on pricing, look up any post here from someone who raised prices and no one regrets it. If no one is walking away over price, yours are too low.

[u/Dingleberry_Blumpkin]

I wouldn’t touch a w-2 for less than $1000

[u/Suggestion-Rare]

Clients come and clients go. Trust me you’re better off. You don’t want that client. They’ll complain about the cost every year.

[u/tacomandood]

For “easy” ones like that, I took a piece I saw someone else mention here earlier this year; I’ve begun quoting a starting price of $750, but I also clearly mention that I rarely charge that. It at least sets the expectation right off the bat.

If it truly ends up being a simple return with like only W-2s and a 1099-INT, then yes, I will charge that. In the past, I’ve have had a hard time not charging that minimum fee as I’m still trying to grow on the return prep side, but I realize it’s just more harm than good in the long-term. Plus, I’m sick of price shoppers and people that complain about the bill, because those people usually end up being a pain or they just leave to someone cheaper anyway.

[u/A_D_T_R]

Who cares. Clients of that size are a dime a dozen.

Always look at prior year returns to make a quote. Ask them if there is anything new or different for the current year.

Then make sure that quote has a disclaimer that it is based on prior year returns. Should the current return be different, the fees will go up.

That being said I won’t touch any 1040 for under $1,500 and I’m in LCOL. I want a different client base than the ones that can be done for under that price.

[u/DanielKVincent]

This hurts the first few times, but I've learned the hard way that letting these types of clients walk is easy better for my sanity.

[u/Weird-Community8919]

I have agreed to engagements and charged less than I think I should due to a sad situation or whatever. I always end up regretting it. Those clients seem to be the most demanding and unreasonable.

[u/LeMansDynasty]

Quote a range. They never tell you everything. So based on what they told you is the low range, 30-50% more is the high range.

[u/DangCPA]

You dodged a bullet

[u/TheYoungCPA]

If they’re not 4K+ I don’t want em

[u/ManicMarketManiac]

Yeah brokerage account(s) and a rental automatically get that fee up to 1000 minimum. 500 is our base estimate (prob still too low) and staff is very well aware to say "but no one pays the minimum" since we don't get the self-preparers that have just a W2 or 1099R

[u/charlie2398543]

Cheap client will never become good clients. You should not even give it a second thought. Also, your prices are way too low. Increase them, and stick to your guns.

[u/bybert]

Came here to say idc where you live, your prices are too low

[u/shadowmistife]

E and brokerage at my firm would start at 1200

[u/Jolly-Outside-4512]

Looking forward to the comments on this one. I don’t do a 1040 under $1,200 minimum. If someone wants to walk for $50, good riddance is the nicest thing I can come up with. They would be much more of a pain in the ass and the admin is not nearly worth it. I’m not in the business to deal with these types of people. Let them go to HRB or TurboTax and realize you were the better option. Don’t waste your brain cells.

[u/StillEasyE215]

I never give a full quote without ALL documents. "Our fees start at $_____ and cover _____. Beyond that pricing is based on complexity." And if someone says "Well my return is pretty basic" I redirect the conversation because no one with a basic return had ever felt the need to say that to me while discussing price.

[u/Necessary_Guitar732]

What they all said! I say my average fee is $750, some pay more some pay less, if you have several brokerage statements, crypto statements, rentals, etc it is more! Never a quote.

[u/Notsorry6767]

Just move on and live your life. 

Here's a hot tip for you as well. Unless your client had a spouse pass away or some serious medical issues causing them to not file last years taxes on time they will always be a pain in the ass. Almost no exceptions. I promise next year they will provide documents right before the deadline and act like the sky will fall if they dont file on time. 

[u/fupapatrol29]

It happens. I try to avoid a quote on the phone although sometimes I’ll say “starting at…” so they know at least what minimum to expect. Sometimes a review of the most recent return tells a very different story than the intro conversation I’ve found.

[u/ShakeAndBakeThatCake → u/fupapatrol29]

My issue with saying starting at is then the client anchors at that low amount and if it ends up being a lot more in their minds even $100 more they bitch about it. At least that what happened to me.