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Fixed Fee Accountancy & Bookkeeping Services

Fixed Fee Accountancy & Bookkeeping Services

Does anyone provided fixed fee accountancy services but charge bookkeeping at an hourly rate? If so, when selling your service do you say you provide fixed fee accountancy & bookkeeping services or fixed fee accountancy services and bookkeeping at hourly rates, which doesn't sound as good as is somewhat of a mouthful. 

Is it better to price all in but when new in practice that can be very difficult to gauge how much bookkeeping is required?

What is a ballpark hourly rate for bookkeeping in London? £25 higher/lower?

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24th May 2012 11:14

We do!

I will never give a fixed fee for bookkeeping unless the client actually requests it and we have a few months bookkeeping history to base it on.

I will give an estimate, but not a firm quotation, as so much depends on how they keep their records, and how they present it, and this can change overnight. It is much easier to charge for any extra work than argue about what was quoted for.

We charge much more than £25.00 per hr, as we don't really want bookkeeping work.

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24th May 2012 11:38

indicate this on a quote letter

On my quote letter I indicate that there are some services in which I cannot offer a fixed fee. HMRC enquiries and management accounting are 2 such services. I also provide an hourly rate and then an expectation of the likely number of hours to complete. ie. monthly book-keeping 5 - 8 hours @ £xx per hour. Expected annual charge (but not guaranteed) would be £xx.

Like ShirleyM above, I do not want to take on book keeping jobs, unless the client can understand that I am not a book keeper I am an accountant and as such my services are not book keeping they are management accounting services. Ie. not only does the bank balance, but I will also deal with depreciation, HP interest, Prepayments etc. Also the client must understand that I cannot define these services to a specify time, as it is unclear what quantity of sales and purchases the client will get per given month.

I also highlight that a book keeper would be cheaper then me.

Because of this I don't get that many book keeping jobs, but the ones I do are very good all round clients of my practice.

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By BOD
24th May 2012 11:59

Network pitches

Thanks for above. I'm thinking more of when I'm at a networking event and there are invariably other accountants there who saw 'we do fixed fee services' If I said the same but in fact bookkeeping was hourly charged I personally wouldn't consider that fixed fee? 

I wasn't looking to do bookkeeping either really but as a start up I need to get come money coming in so I say I provide Bookkeeping, Accountancy etc etc.

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By thacca
24th May 2012 14:35

Review

I quote a fixed fee based on my estimate of the time that it will take. I try to achieve £30 per hour but do let myself get squeezed to £25.00. If it later turns out my estimate of time is incorrect I look to have a conversation with the client to get things right going forward.

Like Shirley I don't want bookkeeping as it is a pain.

I took on a lot of bookkeeping last year and it caused a lot of problems. Following my efforts to date this year dealing with this I have increased the fee on some, passed the bookkeeping back to the client on others, one has taken on a bookkeeper and one client I am parting company with. Overall the increase to some clients has offset the loss on others but we now have less work and headaches to deal with. That is a lesson to me going forward.

 

 

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By thacca
24th May 2012 14:44

Staff costs

I wrote something similar a while back, but: -

I am currently looking for a bookkeeper. I would suggest that a decent one who you can trust to prepare and check the VAT Returns properly and are not just a data entry clerk is going to cost £12 per hour. Add to that holidays, the desk they sit at etc etc then anything less than £25 per hour is not likely to be profitable.

Looking at it another way if you want to do the work yourselve. £25 per hour x 7 hours a day x 232 working days a year equates to circa £40,000. I would suggest as a self employed qualified accountant that is the very least you should be looking to achieve.

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By BOD
24th May 2012 15:15

I view the bookkeeping side as bringing in some money while I am trying to get going. If things got busier I guess I could outsource the work at maybe £15 and have a £10 margin per hour or so.

These are only ball park numbers as I need to firm up the rates. Obviously if I find I can charge more later then I will but starting from 0 one has to start somewhere.

 

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24th May 2012 15:50

Profit on year end

Surely if you carry out bookkeeping at £20-30 per hour in house even at break even the fees you gain at the year end will be substantially profitable?

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24th May 2012 20:51

Day rate

Where bookkeeping is carried out at the client's premises I always charge per day. Standard day being 7 hours.

I always subcontract this work out and never do it myself and make a reasonable margin on it - plus using a good quality bookkeeper makes producing management accounts/year end accounts far quicker and more profitable.

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By BOD
24th May 2012 23:21

Thanks as I said Bookkeeping would be a means to an end initially at least in the short term. Back to my original question though and more in the context of Networking pitches is it fair to say you do fixed fee services if you are going to provide Bookkeeping services at an hourly rate?

Given that usually there are other accountants around who are saying similar it's useful to be able the same along with a differentiating factor....or just say Accountancy services are provided at fixed fees and not mention bookkeeping..

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25th May 2012 09:12

If you are using it as a networking pitch....

... why not say something like:

"Except for book keeping assignments I charge a fixed fee. If you wish to know more about my book keeping fees then please feel free tonetwork with me later"

If you are doing BNI or 4 networking (2 examples), then you could use the 10 minutes slots to go into detail about what a book keeping assignment actually is, and why it is difficult for both you and the client to charge a fixed fee. I do find that once I explain what a good bookkeeper should be doing and how this is advantagious to the year end accounts, the good clients are happy to pay. The bad clients, walk away and therefore as explained above I don't take on too many book keeping assigments but the ones I do are good. People will probably disagree with me on this one, but I don't see many large organisations employing low grade staff to do a financial controllers job. That Is my approach to bookkeeping. I want to be paid for the level of expertise and experience I bring to the client.

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25th May 2012 09:54

Bookkeeping or preparation of management accounts

Why just call it bookkeeping?

Preparation of management accounts sound far more professional and will allow you to charge a higher fee.

Most small business who use external 'bookkeepers' don't produce management accounts. As we all know preparation of a P&L and Balance Sheet is very straight forward if we have done the bookkeeping ourselves, so why not add this on initially as a quarterly service but then as the clients starts to see the value of it (their bank will probably like it too) make it monthly?

Once you are able to gauge the amount of bookkeeping work as well then you can probably make this a fixed fee offering.

Fixed fees - why not just say fixed fees are available, do you really want to restrict yourself to being a fixed fee accountant? Doesn't sound positive to me, 'we always agree fees in advance and fixed fee services are available' sounds far better.

Fees agreed in advance can either be hourly/daily rates or a 'fixed fee'.

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30th Dec 2012 11:21

I come from the other side

I am a bookkeeper.  I offer all my services at fixed fee.  Generally this equates to £30 - £35 per hour.  I am based in an area where the average bookkeeper charges £12-£15 per hour.  If I charged hourly I'd never get the rate I do.

I offer my clients fixed fee from the off, with no review (unless the workload changes) for at least 1 year.  I think by charging hourly and then charging the average after 3 months is not true fixed fee.  It's just spreading the annual cost over the year.  I don't see it as the same thing.

I find this is the main reason my clients use me as opposed to other bookkeepers/accountants locally.  People like to know what they are paying upfront.

Kris

 

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29th May 2012 12:01

Brilliantly Put

Kris, what a great job you do of making the case for fixed fees, both from the clients' and the Accountant's points of view.

Your fixed fee "equates" to, it isn't "based on"You wouldn't get the work quoting an hourly rateYour equivalent rate is more than twice the local average rateClients are delighted and use you in preference to competitors

Q.E.D.!

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29th May 2012 12:23

Easy for a bookkeeper...

...The trouble is that it is easy for a bookkeeper to offer such an arrangement.  If you prepare year end accounts and tax return work how do you work out a monthly fee if say the first year end is due immediately, in six months etc.  I find it really hard to equate.

One method I thought was to suggest that ALL year end work is finalised say 6 months after the year end.  Base monthly fees around that with a "top up" if required on the first fee.

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29th May 2012 13:07

Glad you think so

I actually found it quite difficult to work out, not at all easy with a lot of trial and error.  I do actually offer the full package for sole traders, including self assessments.  The way I do it, and other accountants charging fixed fees seem to do it, is if the client comes with a years work in tow just take the monthly fee and multiply it by 12.  Is it really any more complicated than that?

Kris

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By BOD
29th May 2012 23:31

Thanks

 

Thanks for various replies some thinking to do but useful opinions, much appreciated.

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30th May 2012 12:16

.

What I can't seem to get my head round is do you work the monthly fees on year ends?

So if a client has a 31/3 year end.  Their fixed fee is say £50 per month.  They approach me today to prepare the 31/3/12 year end.  Do I say...OK, fee is £600.00 plus another £100.00 to cover April and May of this year, and then £50.00 per month thereafter?

Also what do members do if in the above example they find a new accountant in August?  Do you repay the fees paid between April and August?

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