New service for clients - dividend advice
I'm thinking of starting a new service for limited company clients who want to pay themselves dividends. The service will include all meetings and telephone calls to discuss dividend planning, as well as drafting of paperwork. I am proposing to bill this separately to the accounts, in the same way as we bill payroll separately, and was thinking of a few hundred pounds per annum for a typical client.
This is an area where I think we effectively already do a lot of the work for little or no reward. It also causes grief if clients are not prepared to keep on top of things at the appropriate time, and this can easily boomerang, so my thoughts are, why not promote it as a chargeable sevice and take the hassle away from the client.
It would also mean that yes you could theoretically do a simple set of Ltd accounts for the £500 quoted by some people on here, but the dividend bit (assuming clients want that) is extra.
What do other practioners think ?
We already do it as well
PC - yes we are in effect already carrying out the service. However I have sussed out that it is the main source of profit leakage on the smaller corporate jobs. The ones with basic records, where you need to think about voting divis to clear overdrawn loan accounts. Where for example you want to get an October year end signed off before 5/4 to get the final divi in that tax year, but the client just can't be bothered to produce the last bits of information because "it doesn't matter" or "the accounts arn't due for another four months" or "the accountant will sort it out". I agree, on the larger client where we might charge a couple of grand for the whole job, and where the client has a fairly accurate computerised bookeeping system it is less of an issue, because you just phone and ask for the info, agree a divi and action it.
I suppose what I'm saying is I need to get the fees up on some of the smaller jobs, and this seemed like a reasonable way of doing it. After all, we already charge extra for doing the payroll, and that is generally a much more straightforward process delegated to a more junior member of staff.
The main source of the problem is, I think, I am not adequately communicating to the client all the steps I am actually going through to help them. Also the fact that some of them are doing their best to scupper my endeavours by their (in)actions. Basically my professional skill and judgement is not being adequately rewarded.
With respect to the first poster, perhaps I'm just better off without the clients who are mot prepared to pay the extra.
Final divis as well
PC - yes, I agree with you regarding interims. However in my original post I was also referring to trying to get the accounts completed in order to declare a final divi. In practice a final dividend is usually as good as interim, provided (a) you can get it in the right tax year from a personal tax perspectice, and (b) you do it within 9 months of BS date to clear any directors loans, accepting there may be some beneficial loan interest consequences.
I tend to advocate doing interims of a value I know will be within available profits, and then a final "mop-up" at the end, when the accounts are done.
Which brings me back to my original point. We manage clients payroll and charge a fee, why note the same for divis. that way we could be on their case ensuring they meet their commitments at the appropriate time, and drafting up the necessary stuff.
Just a thought.
good idea if you want to get rid of clients
The average client would regard dividend planning as part of the role of the accountant. They would be surprised to be charged another £200/£300 a year for a service that you already provide free.
Why not just charge for your time in the normal way ?