The firm quietly paying for hundreds of subscriptions

A firm owner told me recently about a practice he was in the middle of buying. It was in financial difficulty, which was reflected in the price, and he wanted to understand why before he committed.

Part of the answer was sitting in the expenses. The firm was paying for something like four hundred accounting software subscriptions on behalf of its clients, and recharging almost none of them.

Nobody had decided to do that. There was no generous policy, no loss leader, no strategy. There was simply no line item, so every subscription had been quietly absorbed at the moment it was set up, one client at a time, over years.

Why it happens to careful people

It is tempting to file this under sloppiness, but that is not what is going on, and firms that consider themselves well run do it just as much.

It happens because of the order things occur in.

You agree a fee. Later, sometimes much later, the client needs to be set up on software, and you set them up, because getting them on it is what makes the work possible. Going back at that point to add a few pounds a month to an agreed fee feels disproportionate to the amount involved. So you absorb it, telling yourself it is small, which it is.

Then it happens again. And the software company raises its prices, twice, and nobody re-examines a decision that was never consciously made.

A cost you absorb is not a cost. It is a fee reduction, and it is the only kind that gets bigger every year without anybody agreeing to it.

That is the part worth sitting with. If you had reduced that client's fee by the same amount, you would have felt it, recorded it, and probably reversed it at the next renewal. Because it arrives as an expense instead, it never surfaces at all.

It is not only the software

Once you start looking, subscriptions turn out to be the visible edge of a much larger habit.

The clearest example is the registered office. Providing it is a real service with real value: the client's home address stays off the public record, and somebody else deals with the post and the endless letters offering to reclaim their business rates. There are companies whose entire business is selling exactly this, at twenty to forty pounds a month.

A great many firms provide it for nothing, to dozens of clients, without ever having decided to.

The same goes for the company secretarial bits, the confirmation statement that somehow never appears on an invoice, the odd bit of software you pay for so a job can be done.

The rule that resolves all of it

You do not need a policy for each of these. You need one test.

If the client would have to pay somebody for it, it belongs on their fee.

That is the whole rule. It settles the software, the registered office, the filing fees, and everything else in the category, and it does it without any awkward reasoning about what things cost you.

It is worth noticing that this is not about recovering costs. Whether the subscription costs you thirty pounds or three is beside the point. The question is what it is worth to the client, and the answer is whatever they would otherwise have to pay for it, because that is the alternative they are actually choosing between.

The objection, which is understandable and wrong

"I do not want to nickel and dime people."

Nobody does. But look at what the alternative achieves.

An invisible freebie buys you no goodwill whatsoever, because the client does not know they have it. They cannot be grateful for something they have never been told about. If you provide their registered office for free for six years, and they leave, they will leave having no idea you did it.

Put it on the proposal and two things change. They can see what they are getting, which makes your fee look like better value rather than a single unexplained number. And if they do not want it, they can say so, which is information you did not previously have.

Itemising is not the same as nickel and diming. It is the difference between a fee the client can understand and a fee they have to take on trust.

Worth doing today

This is one of the rare things in a practice that can be fixed in an hour and never needs doing again.

Open your software account and list every subscription you are paying for on behalf of a client. Put your fee next to each one. You are looking for the rows with nothing in that column.

Then do the same for registered office addresses. Most firms find they are providing more of these than they thought, at a price of nothing.

Do not try to correct all of it at once. Take the worst offenders to their next renewal, where the fee is being discussed anyway, and make the change there. And fix the intake, so it stops happening: every new client, from today, has their software and their registered office priced at the point the fee is set rather than added silently afterwards.

In Power Pricing these are ordinary services with their own line on the proposal, so the client sees what they are getting and the fee cannot be set without them being considered. Which is really the only reliable fix. This was never a problem of firms deciding to be generous. It was a problem of a decision that never got made, at a moment when nobody was looking.