Year End Planning

Successful businesses, small and large, plan for profit. One of the primary tools used for profit planning is the preparation of an annual budget. The problem with preparing budgets is predicting the unknown.

One way to solve for the "unknowns" in your budget is to get guaranteed pricing from your vendors and service providers. This may not be possible with most of your vendors and service providers, but one place to start is with your CPA.

In progressive forward thinking CPA firms where an emphasis is put on providing total quality service and on the value of the services to the customer, the billable hour is not used. Rather, Fixed Price Agreements (FPA) are used.

As a customer, you do not buy hours from your CPA. Thus, your CPA should not sell time.

Instead, you and your CPA should sit down and decide together what services you value, and how much you should pay for these services. During the meeting, you should also discuss payment terms and any relevant mutual commitments. Then an FPA is prepared that states what you agreed to in the meeting.

With the creation of an FPA between you and your CPA, you have one less budget item to worry about.