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Fixed monthly fees - good or bad

I'm all for fixed fees. I've charged them for several years to good effect.

Just curious how successful agents are at charging a fixed monthly fee. Saw one today that was £110.00 plus vat all in - accounts, ct600, sa100, payroll etc.

Presumably this is the same if the client has a £10k or £1m turnover and that us where I see my issue.

But I am considering it. It would certainly make billing easier!!

Any thoughts or experiences gratefully received.

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By Sarah P
08th May 2012 20:46

This is our approach
But we do cost up each proposal rather than having a 'one price fits all' rate.

I still keep a track on chargeable hours to get an idea on whether the fixed rate is right and will look to adjust after a year if the rate is too low.

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Was it?

Was it a fixed price regardless of size or did it say 'all inclusive prices from £110 plus vat'.

Agree with @Sarah at Weaver.

I charge fixed prices to each client for a specific range of services, anything which falls outside the agreement is charged as an extra agreed at the time the work is requested.

 

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Thanks for the comments.  This

The site states: -

"complete accountancy package includes: completion of accounts, all company returns, payroll bureau, dividends, corporation tax computations, personal taxation, free bookkeeping software and unlimited access to your accountant, we do all this for a fixed monthly fee of just £110 plus VAT"

This suggests an all in service regardless of turnover etc.  But they do specialise in contractors so I guess they know what they are getting.

I work in much the same way as you guys really.  Assess each job using fixed fees rather than hourly rates. Seems sensible when dealing with such different businesses.

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09th May 2012 14:57

What about clients joining part way through?

I wonder what happens when clients join part way through an accounting period, or even after the period has ended?

 

You will be doing a set of accounts and will not have ahd a full years fee.

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Exactly...

I'm glad that you raised that point.  And this is exactly the reason that whilst I encourage monthly payments I still only issue invoices as and when work is done.

I actually think I will continue with my current method.

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Late to the party

For those that join part way through the year I've just started to introduce an additional fee payable at the time the year end accounts are prepared.

For example - fixed fee of £100 plus vat per month, but as you have joined part way through the financial year there will be an additional charge of £xxx to cover the cost of preparing the year end accounts, the cost of which is normally spread over the full year etc etc.

If the fee doesn't get paid, the accounts don't get filed.

Signed one client up on this basis yesterday and had no issues.

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By Sarah P
09th May 2012 19:41

Another way of dealing with mid-year joiners
Ask for a commitment to stay for a minimum of 12 months, so that you then know you will get the required fee over a year.

Doesn't always work out right though and I usually bill for hours worked to process the work to date.

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