I sent quote to a potential client today (first year of business). There are 15 Sales invoices (£11000 Turnover) but around 330 other transactions. They were making losses and business wasn't great. There were also late with the filing of accounts so already on a fine of £375
They haven't kept proper records. I said if you can put all the transactions in an excel template (that I would send) then can manage to produce a set of accounts
I quoted £550 for the company accounts and corporation tax return. I knew it was going to take a while for me to sort out as with any new client there are lots of questions and trying to educate the client together with putting the accounts right with an accurate bank account. My thoughts were that in the second year if I get them to keep proper records then it would be worthwhile picking up this client. He immediately said it was too expensive. I was little taken back as I am not even VAT registered (nor is the business). Maybe in these times - I am too expensive.
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In a word
No.
It's going to be a mess because you know they'll not do a decent job on the spreadsheet. No proper records = lots of queries = time = fees.
Stand your ground. If they quibble this early they may not be worth the future hassle.
That isn't expensive, in fact it's very reasonable
I would charge more if the bookkeeping was done on Excel, and no bank rec.
It's often better to let them go. They may find someone willing to work 'on the side' for next to nothing.
Don't tell me...
I bet they set up the Ltd company themselves without taking any prior advice?
It's impossible
To do anything like a decent job for a Limited Co for less than what you have charged, by the time you have set files up did AML checks etc.
As others have intimated
As others have initimated you are not too expensive, if anything too light.
I learned that lesson in my early days, but it took a good few years. Sell yourself short, tempting through it is, and it comes back to bite you.
I think you are too cheap personally. One of the golden rules when advising our start up clients should always be don't undersell yourself,. As mentioned previously if you do under quote it usually bites you on the backside later on. So practice what we would tell our clients and let them understand the value they will get in paying a proper fee for good service/advice. In my experience the potential new clients that haggle for ridiculously cheap fees are usually the most hassle, be careful. We have all taken on clients from ultra cheap accountants to sort out the mess.
not expensive, it's reasonable
Just think of how many hour you need to get this job done?
Maybe it seams costs equal sales.
It's very reasonable quote.
Hard to get right
It is a black art deciding what to charge and so difficult to get right. Give the same quote of £550 to two identical clients - one will bite your hand off (oh [***] why didn't I make it £750?), the other one will balk (have I over-egged it?). The one that bites your hand off will likely be the least hassle.
When I first started in practice an old practitioner said to me 'if you are the cheapest in town you end up with all the rubbish'. That is so true.
550 sound fair
To be honest I would have charged him about 500 and if he wanted something like payroll for instant that would be an additional chart
Personally I think the £550
Personally I think the £550 seems very reasonable. I made the same mistakes when I started out 3.5 years ago of thinking 'if I don't do this for £(low amount) the alternative is sitting around making nothing, so why not'.
Problem is now I'm very busy I'm stuck with some clients who don't pay enough (thankfully less and less as time goes by) and when their records come in I kind of resent doing the work now. I find myself grumbling to myself throughout the piece of work as I'm not getting paid enough for it.
It's a rock and a hard place though when you start out. You need work. You need fees. You don't want to let ANYTHING slip though your fingers, especially when on day 1 of your practice you had no clients and no prospects (as I did).
I've ended up letting some of my first clients go recently as the type of work and fees I agreed back then just aren't what I need now and these clients just don't fit the 'right' client profile anymore.
Also, just to de-rail slightly (and PLEASE don't less this turn into an hourly/value pricing argument) what would you guys consider to be an acceptable minimum hourly recovery for work? Clearly it's different for different types of work, but as a general rule of thumb for standard work what should we be looking for?
At the moment we only charge fixed fees (unless it's an enquiry that can be open ended) that are based on what I feel the work is worth, but underlying that is an expected hourly recovery which must be at least £x or the work isn't worth doing.
So I guess the question is (and this is relevant to the OP I guess), what should £x be?
Don't take it the wrong way
You can't please everyone
I consider myself to be at the more reasonable end of the fee scale, yet I've had people sit open mouthed at a quote, some think its too cheap some too expensive. The majority and the type of clients i really want think its just right
One of the problems is that some, especially start up businesses, have no real idea of how much things cost in the real (commercial) world. These are also typically start ups who start with very little capital, massively undercharge themselves, end up working all the hours for little profit and ultimately end up going and getting a job after 12-18 months.
There are also some comedians who proudly state they charge £75 per hour for whatever they do and expect us to work for £20 per hour.
Can I check this please...
Now he probably won't know this [and, in intending no offence, you may not know it too] but, if you file the Accounts only for the second year, at Companies House, then Companies House won't ask for the first year's Accounts. And if you don't file the Accounts for that first year, then there is no Penalty to pay [Penalties arise for late submission only !] [Of course, and whilst not directly relevant, the figures for the opening year will be on public view at Companies House anyway, in the form of comparative figures, on the second year's Accounts].
>>> I didnt know this...I have a new client whose accounting reference date is 28 Feb and they havent done the 2014 accounts as they didnt start trading until July 2014 and thought they didnt have to do accounts until a year after started trading.
Their two years is obviously up on 28 Feb 2015. If you only submit the 2nd years accounts to Co House wont HMRC will pick this up or do you do both years accounts and submit both to HMRC and only one (2015) to Co House?
Prosecution for not filing accounts
There is a risk involved with NOT filing accounts:
As a last resort, directors can face prosecution for violating the rules. Companies House will prosecute directors who fail to file their accounts if they think its in the best interest of the public, and if there is sufficient evidence that the company was still “live” at the time of the offence. Thousands of directors have been prosecuted for failing to produce accounts on time by Companies House
companies house
a former employer tried this for one of his clients and it backfired in a big way
doing Basil's suggestion limits you to paper filing as online filing will always show overdue accounts and wont let you go to the next period for filing
companies house view is that whilst the record may be up to date its incomplete and someone could request a copy of the accounts that haven't been filed
there is no late filing penalty as nothing has been filed, but in the case of the firm i formally worked at the client got hit with a personal fine and prosecution.
be very careful!