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Weekend Discussion: How Much Is Too Much When Raising Fees?

pile of dollars with a calculator, blank notepad, and pen

You may have seen this article on Twitter or in Footnotes on Friday: Higher costs prompt Westbrook accounting firm to raise rates. And if you didn’t, now you have.

In it, Mainebiz speaks to Tabitha Swanson, founder of the 33-person firm Swanson Group LLC based in Westbrook, Maine.

When asked what’s her biggest challenge, she says “juggling the pricing increases with the costs, some increasing unexpectedly without much notice while we only increase our rates annually and the bulk of our business flows in over a few months’ period.” Like one of her software products — which she doesn’t name — that “more than doubled” its pricing with a month’s notice.

But here’s the bit I wanted to call attention to:

We increased our [fixed and hourly] rates by 20% to 25% in 2024, and I suspect we will need to have a similar increase for 2025. We have continued to see pricing increases on products/services we utilize this year, and our pay for all staff needs to continue to increase in order to maintain a qualified staff to service our clients properly.

Here’s one reaction to that:

This prompted me to wonder, in the context of rising costs on literally everything and many accounting firms undervaluing the work they do, is there a such thing as overdoing it on fee increases? A hobby economist such as myself might suggest if clients are willing to pay it then you’ve properly aligned your services with their value in the market. Others might say this lady is insane and, like this person, see an opportunity to poach some disgruntled clients (as if anyone desperately needs more work).

A 2022 article in the same publication says Swanson Group is “the largest 100% female-owned accounting firm in Maine” and 2023 revenue was projected to be more than $4.35 million.

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