am I too expensive ?

am I too expensive ?

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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. 

 

Replies (25)

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By User deleted
12th Mar 2015 19:40

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. 

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By ShirleyM
12th Mar 2015 19:41

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.

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By mrme89
12th Mar 2015 19:48

Don't tell me...

I bet they set up the Ltd company themselves without taking any prior advice?

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By King_Maker
12th Mar 2015 19:51

No.

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By Jekyll and Hyde
12th Mar 2015 20:02

not expensive

Not expensive at all.

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By saki69
12th Mar 2015 20:04

If anything you are cheap

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Glenn Martin
By Glenn Martin
12th Mar 2015 21:13

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.

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By sarahg
12th Mar 2015 21:34

Run,

run like the wind

 

Not worth it and you're definitely not expensive

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By girlofwight
12th Mar 2015 22:22

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.

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By JimLittle
12th Mar 2015 22:55

Thanks for the replies

I also priced low to make sure I got the business as when he emailed he said he couldn't afford much.  Sure he will look around and realise my price wasn't too bad but if he looks hard enough maybe he will find someone cheaper,  

Anyway, he better file shortly as companies house will double the penalty to £750 so the penalties will end up more than my fees.  

I haven't charged much for a few clients recently as needed the work and they genuinely could not afford to pay much so worked out better for both of us. Some contribution is better than none though I expect it will take me minimum 12 hours to file

I don't think they took any advice before setting up a company otherwise they wouldn't have come to me

Maybe later I can pick and choose clients.  

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By ionaccountancy
12th Mar 2015 23:13

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.

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By Almasri
12th Mar 2015 23:27

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.

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By JimLittle
13th Mar 2015 08:28

genius

Basil: That is a brilliant idea.  Many Thanks 

Though I will probably wait for him to come back to me first.

One thing didn't think it is possible for him personally to be liable for company debts. It is there just as a deterrent  

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By jon_griffey
13th Mar 2015 10:18

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.

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By MJ-
13th Mar 2015 10:23

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  

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Replying to seeleyharris:
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By JimLittle
13th Mar 2015 11:15

fair indeed

MJ- wrote:

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  

Thats what I am trying to achieve that is fair to both parties.

I work from home so don't have much overheads hence can go little cheaper.  Furthermore, I am not VAT registered hence that should provide this potential client a saving.  Anyway, its his loss,

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By paulb
13th Mar 2015 11:25

RUN..

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By whatdoyoumeanwashe
13th Mar 2015 11:50

Do a Godfather. Go back with a quote of £1,100. Keep doubling it until they say yes.

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By ChrisScullard
13th Mar 2015 11:52

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?

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By Crouchy
13th Mar 2015 12:09

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

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By bigmuggsy
13th Mar 2015 12:11

No not too expensive.

Shout at them - I AM NOT A CHARITY!!!!!!!!!!!!!

 

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By ChrisScullard
13th Mar 2015 12:15

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.

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By LJCASE
14th Mar 2015 18:34

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?

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By DMGbus
14th Mar 2015 22:54

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

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By Crouchy
16th Mar 2015 09:24

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!

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