I operate as a single director/employee accountant.
I have just quoted £125 per month to do a one man limted company's bookkeeping (based on 30 receipts per month), accounts, company tax return and one person payroll.
I thought I was cheap, but he's told me he's received 2 other quotes cheaper then mine?
AM I cheap???
Replies (21)
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That's pretty cheap, don't sell yourself short for the sake of a client who's looking to go with the lowest bidder.
No, that's not cheap. Plenty of folk would charge less than that. Let's face it, you're talking about a couple of hours a month, and there are "accountants" that will do it for a lot less, since they will have almost no overhead so it's pure profit to them.
On the other hand, why worry? Charge what you feel you need to to cover your costs and make a profit. If others will work for less money then it's not your problem. If the client is going on price they are unlikely to value your services anyway.
Depends where you live but I would imagine you'll be undercut on a regular basis in these parts.
Thirty receipts a month ? What's that ? Half an hour ?
Depends on transaction detail, I used (about 4 years ago) to rough back check one fee at 75p per transaction posting, say 80 per hour to charge circa £60 per hour, so a credit sale has one post re invoice and one post re receipt.
The transaction entry tended to come in at circa £2,500 p.a., payroll at £400, vat returns say £500, reconciliations/bad debts/control accounts/ landlord balance squaring another £1,200, drafting accounts another £200-£300, other work in year took it to ahead of £5,000, and I did not do the final accounts/CT, these were done by another firm for additional £1,200.
However that was into excel, into say Access Accounts software I was much slower posting and could sometimes struggle, if description needed typed, to post 40 purchase invoices an hour when I used a job costing module , as had to input Supplier code, date, invoice details, invoice number (sometimes nominal coding different lines) ref, description (three sheets of plywood) and then job cost allocation. The fastest route was to have a grid stamp made, code up all the batch, then post.
So, re the transactions, if a cash basis for 360 transaction posts a year with mere year end debtor/creditor/ depreciation/stock adjust, yes, I could undercut, if full purchase ledger/sales ledger system, with in effect double the transaction entries, then possibly looks fair.
(That is targeting circa £60 per hour for record keeping and say £120 per hour for accounts/tax work)
Ah, Rod Stewart's less successful follow on to "Do you think I'm sexy".
That price doesn't sound cheap to me to be honest. Not saying it's OTT, but there's some crazy cheap accountants out there. My view, don't bother trying to compete with them on price.
Id say it was OK myself.
Generally I have noticed a drift down in fees in the past 2-3 years in my area whilst tax is getting more complicated.
Roll on MTD so we can jack them up a bit.
Roll on MTD so we can jack them up a bit.
I suspect you'll lose a lot of clients by doing that. Like I said, plenty of folk will do it cheaper, and while you can generally keep clients by keeping prices at a similar level, I think you'll just prompt them to shop around if you jack up prices for MTD. After all, as far as most clients are concerned, MTD is your problem, not theirs.
I gained a fair few new clients when RTI was introduced because other firms tried to shift their monthly payroll prices northwards and clients were not interested.
I gained a fair few new clients when RTI was introduced because other firms tried to shift their monthly payroll prices northwards and clients were not interested.
Don't move them northwards.
We're cheaper up here than down south.
I don't think you are cheap and my quote would be a fair amount lower, assuming this was for a service/consultant type business. I offer a similar "all inclusive" service but make clear my prices are based on email support only (unless a call is more efficient).
I try to target low maintenance clients but probably need to increase my prices based on my location near the big smoke. I'm fairly new to practice so expect to make mistakes and I already have my first non-responsive client to disengage (should have listened to my gut).
I charge for accounts, corp tax , divi vouchers £700-£800+vat. Payroll £15+vat per month. End of year dec £100+vat.
I think it is reasonable but some maybe charging on similar rates as for contractors or maybe they may not be VAT registered With automation rates will go down as doesn't take much time nowadays. In fact, get your client to do the book-keeping and maybe you can offer him a lower price. I imagine the book-keeping will take most of your time
Hopefully some decent clients will choose you because of quality of service than price. Some will always be price conscious and now learning maybe to avoid those as they will hop to another accountant later.
Actually I quoted similar amount to a potential client who was inside IR35 but he wrote back to me saying he got at half the price I was charging.
In every line of business there will always be someone cheaper but cheaper doesn't mean the best. If it happens on a regular basis then you may need to revisit the pricing based on your area but saying that I find quite a few clients do not have the time or inclination to get so many quotes. I intend to stay away from those where I have a feeling they are shopping around.
The regional variation in fees is quite spectacular. I live in rural Shropshire and nobody would pay what you have quoted up here. I charge £600 a year for a VAT registered one man limited company. High Street accountants here charge around £1,000 a year. I am probably a little cheap but I am deliberately pitching myself to undercut the High Street.
I would say thar you are on the going rate, although it does depend on where you are based.
I would be using AutoEntry to sort the 30 invoices out.
If you feel that you charge is fair don't drop it.
There was someone near me who was doing jobs really cheaply, but they must no have been doing well as she ending up taking a job and left her clients in the lurch.
I don't get many sole trader clients as my minimum charge seems to put them off or someone else must do them cheaper,locally but I am not wanting loads of £300 jobs anyway as they will be like a millstone come MTD.
Dont compete on price compete on value. If you compete on price someone will always come along and do it cheaper.
As my old boss used to say you cant be cheap, fast and good;
1. You can be cheap and fast but you wont be any good.
2. You can be good and cheap but you wont be fast.
3. You can be good and fast but you wont be cheap.
£125 does seem a trifle nice for the work required. However, after you have done the monthly entries, you still have to factor in the accruals adjustments, any extra involved in the tax return, plus 13 payroll submissions.
We'd come in at about £900 plus vat pa for this level of work, and we're based in the 'expensive' South!
I agree with all the above comments: I don't think you're cheap either but nor do I think that should be an issue for you as long as you are picking up clients willing to pay that.
What does confuse me, though, is your question: given what you've told us, surely it should be "am I too dear?"
That's a fair price I would say, given the total time commitment required over the course of a year. If you work it out to be around 2 hours a month overall, then you're only making £62.50 an hour which, in my opinion, is a fair rate for a qualified accountant in practice.
Extract from that the software costs, rent, printing etc, and I think you're being fair.
As many others have said, there is always someone cheaper than you, and likewise always someone more expensive, and as long as you aren't losing too many jobs on price you should stick to your guns.
Taking on clients for lower than your desired fee can soon consume all your time, and then when better clients come along you can't service them because you're too busy doing the work for the lower fee clients.
Frig me, I must be exoensive then as I wouldn't touch a ltd company with bookkeeping and payroll each month for 125. I would do it for 150 per month but no less.
I usually find i have quoted less than new clients have been paying previously so no plans to change.
Round here the minimum fee for a ltd company, once a year accounts, from a high street local firm was £750 per annum plus vat 6 years ago.
I accept that fees haven't increased much over the last few years from an inflationary perspective but im stunned to read post after post stating the OP is expensive!
I'm not disputing it either
.. it just tells me my fees are not as low as I thought!
Interesting.
EDIT:
In hindsight, perhaps the difference is that I normally meet my clients at least once throughout the year, usually more. If it was 'email contact only' then i would do it for less.
Are we talking about email only?
Manchester, we would only usually have an annual meeting and most of the contact would be via email.
We would love to be able to increase our fees, and have not really been able to put them up at all in the last 5 years as we are constantly being undercut by less qualified or experienced people.
Luckily most of our clients appreciate what we do for them, but there are always a few that move after a couple of years and cite a lesser fee as the reason. We don't lower our prices to match these unless the amount of work we do for the client also reduces.
Here is an example of one firm's published fee structure (Yorkshire):
https://www.dropbox.com/s/w30svk2oi1zph62/Yorkshire%20Accountancy%20Limi...
Looks about right. I'd charge pretty much the same - a bit more if its to include director's personal tax return.
It all comes back to how much you want/expect to earn.
If its you doing all the work and you want to generate fee income of say £100,000. Then working on the basis of 25 chargeable hours a week over 48 weeks (1,200 chargeable hours a year)- you'd need to recover £83.33 an hour on average.
Could you do all of the work for this client in less than 18 hours a year?