Fees benchmarking for sole-practitioners

Fees benchmarking for sole-practitioners

Didn't find your answer?

Yep, that time of year and my thoughts start to turn to 2011 fees. Quite often a thread appears on AWEB concerning fee levels for a specific job and (a) It attracts lots of opinion and (b) gets lots of hits. So, I wonder if any of you would like to do something a bit more formal? I have been posting on AWEB without Pseudonym for about 7 or 8 years now so most of you will be aware that I have no marketing or commercial interest in you (or your clients!).

My thoughts were that I would guage interest and you could email that to me by hitting my name/avatar above. You can be entirely anonymous as far as I am concerned (apart from your on-line persona). If there is some interest, I would then benchmark some key client groupings (6 -10), distribute them to those interested and request typical fees charged. I would then collate the replies in to an anonymous matrix for all those who submitted data. You could then cut the data however is of interest or benefit to you.

I appreciate that there is a huge cross section of people who use AWEB and therefore I would like to limit the data set to:

Non franchised sole-practitioners

Not based in a major city

Engaged in general practice

AWEB - I suspect this should be in discussion groups or something but I wanted people to be aware of it before you move it!

Thanks   Steve

Replies (66)

Please login or register to join the discussion.

By Steve Holloway
15th Feb 2011 09:21

@ first tab ...

yours was sent with the others on Saturday morning and didn't bounce back. Mind you, I've had one other person this morning who also did not receive theirs .... so if anyone else hasn't please let me know.

I agree with Luke's observation though ... there was not a great deal of consistency across bands. I was apparantly very cheap at the lower end but about right further up the scale. I think it is because I have picked up the latter from other accountants and my prices have evolved accordingly. The ones at the lower end tend to have always been mine and I did not have a reference point until now.

 

Thanks (0)
By aiwalters
15th Feb 2011 11:31

possible reason for differences
There are two (contradicting) possibilities:

1) I am very good at tax, and self confident that I can do an excellent job so will charge a higher price because I feel I provide value for money, as an expert. On the other hand, I am not more than average at business planning/management, so I value my work less. Therefore I may be very expensive for tax work and very cheap for management accs.

2) Because I am good at tax and enjoy it, I'd be prepared to do it for cheaper. On the other hand, I hate writing business plans so if the client wants me to do it, I'd have to charge a lot to motivate me.

These are just examples

Thanks (0)
avatar
By thacca
15th Feb 2011 12:17

Thank you Steve. Very much appreciated.

Thanks (0)
avatar
By peta1
15th Feb 2011 13:00

good points AI Walters

 I like others was quite surprised at how my fees compared - not as bad as I thought and better in some cases.

For me it is down to confidence - if i know the subject, I know I can add value and therefore find it easier to price.  If it is something new to me, I know I need to do some research but then also question what value I may be adding and seem to be less comfortable in quoting a higher price..... 

So I know I need to keep reading up, continue to build my technical skills so that I am better placed to quote premium fees.  

Thanks Steve, for pulling this together as I have find it very useful

Thanks (0)
avatar
By bigdave1971
15th Feb 2011 13:43

Thank you

I also wish to say thank you Steve for the idea and your time in sorting out the questions and the responses.

It makes interesting reading for me too.

Dave

 

Thanks (0)
FT
By FirstTab
15th Feb 2011 20:45

What does the survey show?

Great work Steve - thank you.

I am a little shocked about low fee levels. Mine were highest. This explains why my appointments rate is high but the sign up rate could be a lot better.

I am just thinking what does this say about our profession in the practice world? To me it shows that acountants work very hard for financial rewards that does reflect this and we as accountants are not very good at running a business? I understand some are not in this just for the money. My view is I run a business and I want to make good money.

I just wonder whether the point about QBE/QBF comes into fee levels? Even taking account of location factor I think the fees are low.

Perhaps my fees are too high and I have got it totally wrong? I need to refect on this as well.

NB My comments are not intended to demean anyone but intended for this area to be explored.

 

Thanks (0)
By petersaxton
15th Feb 2011 21:29

No right or wrong

"Even taking account of location factor I think the fees are low.

Perhaps my fees are too high and I have got it totally wrong? I need to refect on this as well."

There's no right or wrong answer. There's  so many factors to take into account. I work from home so my expenses are limited. I built a business up from scratch and I've always been busy but my prices were low. I've charged more in the last year or two and I don't get any resistance from old or new clients. Some accountants may charge twice as much as me but they expect more clients will leave as they are not happy with the prices.

I spend about £2,500 on accounting practice software and I have a good understanding of the accounts and tax software. This enables me to spend relatively little time on preparing accounts and tax returns. Presently I use spreadsheets for all the tasks related to my clients and services. I review everything each month and list what needs to be/can be done in the next month and then have one list for the month. I also use spreadsheets for time & fees and invoicing. I'll review what can be improved easily by transferring the information into Digita Practice Management.

I prefer to charge a small amount but train the client to produce information in the format I prefer. If it's difficult for the client to produce the information I'm happy to accept it in their format but I'll charge more.

Thanks (0)
FT
By FirstTab
15th Feb 2011 21:55

Peter

Thanks Peter. The thought that comes to my mind is you are both experienced and efficinet. As a result it takes you less time compared to someone like me. Does this mean you should chrage less? People, as you know, are buying your knowledge and experience not just how much time you spend on their affairs. There is a premium for this?

On the software front again it was the right decision you made, that makes you more efficient. Does this mean your fees should lower?

 

Thanks (0)
By petersaxton
16th Feb 2011 00:13

They can be

It means my fees can be lower.

Say I charge £500 for a set of accounts and can do it in a few hours, I could presumably get £2,000 from a few clients for similar work until they realise that plenty of accountants would charge less. Maybe £800 - £1,200 would be more possible but there could still be resistance. I've charged £2,500 for a set of accounts, quarterly VAT returns, monthly payroll and two personal tax returns including one buy to let. This client is a good client but they like to understand their accounts so I charge for fully explaining any queries they have. The £500 would be for somebody who doesn't need the explanations.

If I have a personal task to do I do it. If I worked as many hours as I could on chargeable time I could earn a lot more but I am happy with things as they are. Being 58, I don't expect to change anything dramatically in the future.

If you want to change what you do then do it but I don't think you can think about it and come out with what is right or wrong - just what you feel comfotable with.

Thanks (0)
avatar
By cymraeg_draig
16th Feb 2011 00:40

Where do your clients come from ....

If you want to change what you do then do it but I don't think you can think about it and come out with what is right or wrong - just what you feel comfotable with.

 

Posted by petersaxton on Wed, 16/02/2011 - 00:13

 

Another factor is often where you got the client from. When someone moves to you from another practice the first thing you do I guarantee, is take a look at the last accounts and see how much the previous accountant was charging.  And I guarantee you set your fee accordingly.

I've seen clients I'd happily do for £3k, but, having seen they were paying their last accountant £7k I'd be a fool not to charge them at least £5k.   On the other hand I've seen clients paying their previous accountant fees that I wouldnt bother getting out of bed for. 

 

Thanks (0)
By Steve Holloway
16th Feb 2011 08:42

QBE or otherwise ....

obviously I am in a slightly privaliged position having seen the data come in but I can say that the QBE / qualified debate is not a factor in this fees survey. The vast majority would certainly appear to be qualified. I think office based v home based is a greater differentiator but that is really just me drawing a conclusion from the AWEB persona when linked to data.

Although I will be putting my fees up as a result of the exercise (that was the reason to do it!), I otherwise share Peter's sentiments. This is not a business for me, rather it is an income that enables me to achieve work-life balance and a fair standard of living. Rich is not important.

Thanks (0)
avatar
By Mark Three
17th Feb 2011 15:12

Bit late - but please count me in

Hope it's not too late !

Thanks (0)
avatar
By MC1
04th Jul 2011 09:35

Just come across this thread

Hi Steve

Do you have any plans to extend this.  I would have liked to have been involved and would have been very interested in the results.

 

Thanks (0)
Replying to Ammie:
avatar
By chatman
06th Jul 2012 17:20

Next Time

MC1 wrote:
Hi Steve

Do you have any plans to extend this.  I would have liked to have been involved and would have been very interested in the results.

Me too.

Thanks (0)
avatar
By nick
04th Jul 2011 10:17

Benckmarking

Hi Steve

I dont think I ever got the results of this, is it possible to get a copy.

 

 

 

Thanks (0)
avatar
By Arabita
11th May 2014 13:23

Hi

I know this is old but was wondering if I could have a copy of the results please!

Thanks

Thanks (0)

Pages