You might have wondered why we prefer Fixed Payment Agreements (FPAs) at JMp Accountants. Over the past five years, we’ve used this model with most of our clients and found that it helps us provide the best service, at the best value.
It means no hourly rates and no time sheets (which we refer to as the ‘rip off system’). Instead, you and your TA agree upon your monthly accounting requirements and set a fixed rate to cover these activities.
When prepared properly, an FPA is the best solution for both clients and TAs. Both parties have a clear expectation of the fees and requirements and can budget their time and expenses accordingly.
FPAs are a great option for clients that appreciate transparency and integrity from their accountant.
The dangers of Fixed Payment Agreements
In the initial months of the arrangement, when the specifics of your needs are still being determined, there can be some issues that could derail the benefits of an FPA. They include:
- underestimation of fees – and underservicing because your budget is not large enough
- overestimation of fees – and overservicing because your TA is trying to use your whole budget
- variations in services needed – including your changing business conditions, or ad hoc requirements.
Creating the perfect agreement for each client is a science. To make sure that you’re getting the best value (and it’s a fair arrangement for both parties), we regularly review your agreement and update it as necessary.
You’ll also be pleased to know that we always err on the side of generous – our ongoing relationship with you is more important to us than splitting each and every single hair.