Why Your Firm Should Have Retainer Arrangements

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Consider a retainer arrangement. Consider a retainer as providing the client with access to you when they need it. This is an extremely valuable service in the eyes of the client and it is often seriously undervalued by Accountants when they provide it.

A strict retainer involves no formal contact – the client calls you when they need you. You might also have a hybrid retainer, meaning you provide some sort of high-level service and provide ad hoc access as part of that service. Some firms refer to this as a virtual CFO service. In almost all cases, I see this extremely valuable service being underpriced. I see Accountants delighted at selling a virtual CFO service at $3,000-$4,000 per month.

arrangement

But ask yourself this question – how much would the client pay to have someone on the payroll providing the service you are offering? The answer is usually $80,000 to $100,000, with the caveat that the service would unlikely to be as good. So why are you offering it at half the price?

If you sell a virtual CFO service, you should price it at MORE than the market rate. Your client could not hire someone with your expertise for $100,000. Nor could they benefit from the fact that you are NOT on the payroll and, as such, if they are going down the wrong path, you would have no qualms speaking your mind and telling them. Someone on the payroll would find it hard to do that.

payroll

Creation and effective implementation of a retainer arrangement is just one of many accounting business strategies we help Accounting firms like yours establish. Let us help you. The first step is getting your firm’s business performance profile so we can determine which aspects of your business we should focus on.

About the Author


Colin Dunn

Director & Co-founder at PANALITIX

Colin is a Chartered Accountant who, having spent almost 10 years with one of the fastest growing and most innovative firms in the UK, has since invested over 20 years helping business owners to improve their businesses with a focus on attracting new clients, better managing existing clients, developing new products, building an engaged team and strengthening internal business processes.

Colin's primary focus at PANALITIX is on product development and business improvement content. He is the author of the bestselling book “Accountants: The Natural Trusted Advisors".

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