I have been approached by a prospective solicitors client in the City. They have the last few quarters VAT Returns outstanding.
This is a very successful solicitors practice with large international clients, but very disorganised on the financial side. I hope for a long term involvement with them
I would be doing quarterly accounts for them and anticipate 5 days (7hrs per day) per quarter. The work would be done in Sage by myself and whilst I appreciate that this is mainly bookkeeping work, I still feel that about £25-£30 per hour is on the lower side for me. I am very fast and efficient in Sage. However I do not want to seem overly expensive and scare them off.
I was thinking of charging £1,750 per quarter for producing quarterly P&L and BS. Is this too much or too low?
What fees would you be happy with in a similar situation?
I would appreciate members' comments.
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Only 2 solicitor clients
I have only had two solicitor clients and I have to say, 'think carefully before you get involved' as they were the biggest PITA clients I have had. Both relationships ended unhappily. Basically, they were very demanding and didn't much like being told what to do despite professing their ignorance on matters financial The fact that you are inheriting a mess is already ringing alarm bells.
In retrospect Sage really wasn't a suitable package for the purpose.
As for the fee, make sure it's one that is worth your while and make sure you get your money. After all, you are hardly going to sue them for unpaid bills, are you?
-- Kind regards Andy
No absolute fee
If a prospective client is disorganised I wouldn't quote an absolute fee. There would be no incentive for the client to make an effort to change. If you charged £50 per hour the client may not agree but if they did they may follow your advice for making your work easier. You don't want to be stuck in a contract that takes you even longer to perform.
I have two small solicitor clients. One has been fine for several years. The other is a new client and I had difficulty getting her to respond to my queries.
Client account monies as well?
Are you going to be doing the client account book-keeping as well? If so, I think £1750 is way too low as it could take as much time again as the book-keeping for the practice and you have to comply with the solicitors' clients' accounts rules etc which from experience is a royal PITA and likely to be full of problems.
Why?
I couldn't see the client account being excluded from an accountants responsibility.
Why do you say it's a PITA? I've never found it that much of a problem.
Strikes me as too low
I spent years in a Big 4 firm dealing with several of the 'magic' and 'silver' circles of solicitors and was audit manager for a few of them.
In all but the most organised, and I can only think of one in this case who were actually fantastically organised, they were nearly all very disorganised and a real hassle to work with. There were instructions left right and centre from different partners, some double authorised, some not at all, questions on whether it was office or client money (i.e. has the disbursement on the invoice been paid, ok so office, if not must go to client account until original disbursement paid etc). There are just so many bits which will add time and if you're also taking responsibility for the Solicitors' Accounts Rules side of it then it's potentially a BIG task.
Personally I wouldn't touch it at all myself despite years of quite heavy involvement in the industry, but then again they never were my favourite clients :-)
If you're going to do it £1,750 is too low. They'd never get a City firm to do it for that.
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Thanks guys, very helpful comments.
Some more information - This is a 3 partner firm with circa £800K turnover.
I have not had any discussions about client account audit, apparently their admin lady maintains the ledger while the former accountants signed it off. As such I am not a registered auditor so if I do it I would have to get external auditors to sign off.