We have quoted an IT contractor £112 plus VAT monthly for: company accounts and tax return, monthly management accounts and div paperwork, monthly PAYE, personal tax return, and Cos House annual return. Extra for IR35 contract reviews. As a benchmark fee we used the contractor specialists SJD, who boast a clientelle of 14,000 contractors and who quote their price online as £110 +VAT (it went up to £120 +VAT yesterday) for that same list of services.
Prospect really wants to appoint us but says he has three quotes in the £60 - £70 month range from other accountants (here in the South East) for precisely those services.
Are we way off-beam with our pricing? Or is our prospect, who we suspect is fond of negotiating, having us over?
Replies (25)
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Apples and oranges?
£60-£70pm looks about right to me if the monthly management a/cs are excluded: it's broadly what I would charge for those services although I'm based in the polar opposite of the South East, so it's maybe still a bit cheap for your neck.
Is the contractor sure the other accountants are offering monthly management a/cs? Why would a contractor even need those (or does that really mean IR35 calculations)?
Really want to appoint you
Clearly they see something in you that is absent from the cheaper alternatives. That something has value.
Agree with Andy
The potential client clearly wants you above the others, but it is also plausible he received those quotes.
Your time is valuable and if that potential client can be replaced by another that will pay £112, then wait for that other client. They would be no less work than another client and you know that there are clients out there who will pay your rate.
Management accounts?
Is this a sole IT contractor? i.e. Not running a contracting business. If it is a single contractor, then like someone else mentioned, I wonder do they really need monthly accounts.
Us too
Thanks for the pricing- we are too expensive- we charge 115-195 per month +VAT.
How about KPMG?
My guess
is that management accounts are potentially needed for calculating whether any distributions are considered legal
Limited company accounts, payroll and everything else for £60 to £70/mth - no chance. It's simply not worth the hassle and I think your original fee quote is quite reasonable. We focus on quality service and regular contact and information flow to the clients. We are told they value and appreciate it and they are prepared to pay for it.
A good level of service makes me happy at my work and given the tiny number of clients we lose, it seems to be what the clients want too.
What?!?!
£70 a month the going rate in Kent - no chance.
Stick to your guns it sounds about right.
I have several similar where I do the bookkeeping (v simple) and flat rate vat returns but no management accounts.
For this I charge £125 plus vat per month. Easy work good return, clients happy. Similar to you I outline the different payroll options.
My only bugbear here...
...is that you've openly admitted the level of your quote is linked to his day rate.
I can't stand that kind of attitude if i'm being honest.
Price itself is fine though.
But
...is that you've openly admitted the level of your quote is linked to his day rate.
I can't stand that kind of attitude if i'm being honest.
It's not so much linked to his pay rate, more a case of noting that he's a bona fide contractor who spends eight quid a day to park his car and twenty quid a day on train and tube, and is well aware of IR35 and the grey areas involved with expenses, permanent workplaces etc. I'm puzzled why his accountancy budget is less than his morning coffee budget.
I still don't get what that's got to do with your quote?
Your price is fine
Your price looks fine. We'd charge £125+VAT per month for annual compliance and the payroll. We'd expect them to keep records tidy in Freeagent or Xero too.
Shop around hard enough and you'll always find something cheaper
I agree
Your price looks about right to me, and is similar to what we would charge. We're in the South East.
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I price it annually but come back to the same place, £1200-1300 PA. Some are down to £1000 if its zero fuss, 12 invoices and 20 or 30 expense lines.
To be fair, I would (if the market price was such) still do these at £900 if its flat rate and 1 or 2 sales a month, but would cut all extra services, so no extra advice, no free director's returns etc.
£60 to £70 per month?
You're having a laugh. That wouldn't cover the annual accounts alone never mind the rest of the stuff. (£1,200 just for the accounts for our contractors)
It's not just the "job"
We do have to factor in those questions that always crop up, particularly amongst contractors. They all work with other contractors whose accountant let's them claim for their holiday in Ibiza etc. and they "all pay far less tax than I do"
£600 to £700 pa for me in S London
Assuming I don't aticiate any grief, this is a good rate, but with the client doing his own bookkeeping in the cloud (including his payroll), so can look at his own management accounts whenever he wants. Bookkeeping also produces dividend minute & voucher when ever he pays it. I can log in for 15 mins each month to check it all out then draw off the TB for the final accounts etc.
Assuming personal tax return is salary, divs & some interest it only takes 20 mins so that included too.
5 years ago it would have been £1,500.
Software costs
Assuming I don't aticiate any grief, this [£600 - £700 month] is a good rate, but with the client doing his own bookkeeping in the cloud (including his payroll), so can look at his own management accounts whenever he wants. Bookkeeping also produces dividend minute & voucher when ever he pays it. I can log in for 15 mins each month to check it all out then draw off the TB for the final accounts etc.
Assuming personal tax return is salary, divs & some interest it only takes 20 mins so that included too.
5 years ago it would have been £1,500.
Surely Paul your cloud and other software overhead alone must be in the region of £200 pa?
Hi I'msorry (if that's not too familiar), yes, £120 for the cloud and £80 for other direct costs wouldn't be far out I suppose.
management accounts
I produce monthly management accounts for all of my contractor clients. A simple P&L and balance sheet, and it keeps the book-keeping up to date as well so that the year end accounts are a much smaller job than having to process the whole year in one go.
The monthly profit is needed for the purposes of calculating available dividends, and in any case I recommend that all of my contractor clients keep on top of their finances and have an awareness of how their business is performing.
I charge £1300 - £1400 per year for the same services, plus £100 per director's tax return. £60 per month is very cheap and I wouldn't expect it would cover anywhere near the level of advice I would expect to give a contractor.
£105+VAT per month
£105+VAT per month for the following
1. Year end stat accounts
2. Company tax return
3. Monthly payroll
4. Director tax return
5. Annual Return
6. Quarterly VAT return on FRS and management accounts
7. Xero VATcashbook package where we do the bookkeeping (most of these clients have no more than a dozen bank transactions per month.
8. Dividend Certs