Getting fees, getting harder?

Getting fees, getting harder?

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Scenario: Last Friday had a meeting (5.00pm to fit in with them) with 2 one man band Limited Company clients who were best of friends. One the son of a long standing client. Turnover estimate of £50K per company. Services required were everything including voluntary VAT registration and quarterly returns. Fee quoted £130 per month including VAT.

Telephone call this morning saying they did not wish to go ahead as they wanted the full services for £60 (inc VAT) per month and had found a company on the internet who would do it for that. 

Inbox this morning: "I would like to thank you and your staff for your services to date which have been excellent but SJD are a lower cost which I can not ignore." This from a client of 9 years.

We are coming across this more and more and just wanted to ask the AW community if they are experiencing the same?

Many thanks in advance for all replies.

Replies (74)

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By ShirleyM
20th Apr 2015 09:23

We had similar, a couple of months ago

A one man band limited company, who made our tasks as difficult as possible by presenting VAT info on the last possible date, demanded a 20% reduction in fees, else he was walking.

We wished him luck with his new accountant!

We have recently received a late PAYE notice for this ex-client, despite him having appointed a new accountant.

Thanks (1)
Glenn Martin
By Glenn Martin
20th Apr 2015 09:48

I do not think some on line firms are actually that cheap.

SJD quote £110 per month for a standard Ltd Company which is more than I would charge, so I don't think they are that cheap TBH.  I wonder if clients get blinded by the marketing or the feel they are supported by a larger network, for a similar price to a one man band charges.

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Replying to ry4n:
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By HeavyMetalMike
20th Apr 2015 10:06

If you start worrying about SJD and other factories it is a slippery slope. But then if you only have contractors it will always be difficult as they can chop and change to save £5 a month?

Don't fret. Just get some higher class clients?

Thanks (1)
By Tim Vane
20th Apr 2015 10:03

Don't worry. What you are losing out on there is the dregs. The lowest common denominator clients who, in the long run, you definitely do not want. These clients are only ever trouble and never appreciate what you do. And do not worry too much about your 9 year client - there is every chance he'll be back as he'll quickly appreciate that the cheaper service comes with a cost in his time and the quality of the service he receives.

I usually find that such clients are grateful when you accept them back with a cheery smile and nothing is ever mentioned of the matter again.

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By andy.partridge
20th Apr 2015 10:14

Poker

I think more clients are challenging the level of fees, but I think that is just a reflection of society in general where we are more inclined to negotiate rather than just accept the price tag.

You might want to adopt your poker face. After all, if you do reduce your fee it gives the impression that you were seeking to over-charge in the first place.

If your fee structure is clear, fair, you treat clients well and you have confidence in your own ability there should be no need to reduce your fees.

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By MJ-
20th Apr 2015 10:26

Let them go

I have a client well a client to be, has come to me to do his accounts. After a brief conversation about what he required he has made over 5 appointments in the last month which he has failed to come to any due to car problems, stuck in traffic, shopping etc.  Little does he know that at the end of this month he will be getting a little letter from the HMRC about late filing penalties. 

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Replying to raju m:
Red Leader
By Red Leader
20th Apr 2015 10:40

Two strikes

MJ- wrote:

I have a client well a client to be, has come to me to do his accounts. After a brief conversation about what he required he has made over 5 appointments in the last month which he has failed to come to any due to car problems, stuck in traffic, shopping etc.  Little does he know that at the end of this month he will be getting a little letter from the HMRC about late filing penalties. 

If a prospect misses two appointments with me, I won't take them on.

Even if they miss one appointment, I'm starting to review if they might be a D client.

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By Crouchy
20th Apr 2015 10:45

always someone cheaper

we recently quoted for a small limited company who'd been recommended by a long term client

we negotiated a knock down fee of £60 pm for accounts, tax returns, payroll etc which they accepted.

 

a week later they contacted to say they had found someone cheaper which seems impossible given the work required!

price is a factor, but if this is the only factor then you are better off without them, otherwise you'll always be looking over your shoulder

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By Pelican
20th Apr 2015 11:07

I had a client who I gave a quote too. 

He came back and said I was to expensive. 7 months went by when I received a call asking if I could pick up his accounts as he hasn't touched any of it. (basically done nothing with it apart from pay himself a wage of £833 a month because everyone else in the canteen at work was. Turn out he had a tax code lower than 1000L) 

My response was yes but this is my new fee (an increase as I know it will be more work) He couldn't wait to sign up with me. 

 

 

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By Kelly1234
20th Apr 2015 11:32

It is difficult these days to get a decent fee, we had a walk-in in late January.  Opening question: 'how much do you charge to do a tax return?'.  I had to stop myself from saying how long is a piece of string, pal?!  After getting a few bits of information from him we were able to quote £350+VAT, explaining that as it was late January it would have to be made a priority to avoid being late therefore involved an extra cost.  Apparently, there was someone else who would do it for £40.  I think he wanted me to say, ok we'll do it for a tenner.  Had to explain that unfortunately, we couldn't quote that low.  He didn't look too impressed!!

Then there's the client's who decide to do their tax return themselves, which is fair enough, but they want to come in so that we can go over with them how to do it 'because it's not as straight forward as they thought'.  For free!!  That is probably a whole other thread!

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Replying to accountantccole:
Red Leader
By Red Leader
20th Apr 2015 14:09

long piece of string

Kelly1234 wrote:

Then there's the client's who decide to do their tax return themselves, which is fair enough, but they want to come in so that we can go over with them how to do it 'because it's not as straight forward as they thought'.  For free!!  That is probably a whole other thread!

I tell them it will be nearly as much as the fee for me doing it from scratch.

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Replying to johnt27:
By ShirleyM
20th Apr 2015 11:53

I tell them it will be more expensive

Red Leader wrote:

Kelly1234 wrote:

Then there's the client's who decide to do their tax return themselves, which is fair enough, but they want to come in so that we can go over with them how to do it 'because it's not as straight forward as they thought'.  For free!!  That is probably a whole other thread!

I tell them it will be nearly as much as the fee for me doing it from scratch.

It always takes longer to teach someone, than to do it yourself. I also mention that what is relevant in tax legislation now, may change next year.

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By Kelly1234
20th Apr 2015 12:05

I just tell them that since they have indicated that they no longer require our services we will issue our disengagement letters to formalise us not acting as their agent going forward and that unfortunately, legally we aren't able to provide advice to client's we are not engaged to act for. Then refer them to HMRC's tax return notes etc.

I'm always curious as to whether they realise how cheeky they are being - you wouldn't go into a hairdressers and say I don't want you to cut/colour my hair because I don't want to have to pay you but would you mind showing me how to do it.

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By Jim100
20th Apr 2015 12:58

disheartening

I think there are pressures from all quarters now to reduce fees - online providers, Outsourcing to other countries, more local accountants (both qualified and non qualified) etc.  It is going to become tougher and suspect fees will go on a downward spiral due to the increased competition.  

I have had to lower my fees to win the business.  Not ideal but I need to be realistic as I need the work.

The problem with the big boys like SJD you don't necessarily get a personalised service and thats' something you need to emphasise

 

 

 

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By Maslins
20th Apr 2015 13:39

I don't think it's getting harder.

I think there's two separate types of clients who haggle on fees:

1) those who genuinely don't make much money.  Maybe sounds harsh, but my view is to avoid acting for these kinds of clients.  They'll go for the cheapest provider they can find (or DIY) and make it work, because they don't have much other option.

2) those who earn lots but are tight.  Let them go.  Some will get "burnt" by a cheap provider and come back.

In short I guess I'm saying my view is don't aim at the bottom of the market, and also accept the fact some people will always want cheaper (don't cave).  Plenty of businesses earning well prepared to pay decent fees for a decent level of service.

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By JCresswellTax
20th Apr 2015 13:57

Seen a few

leaving for these online contractor accountants charging lower fees.

I suppose you will always get a few and you have to live with that.  If it becomes more frequent you may have a problem....

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Replying to Nicole L:
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By Maslins
20th Apr 2015 14:08

Intrigued by this

JCresswellTax wrote:

leaving for these online contractor accountants charging lower fees.

I suppose you will always get a few and you have to live with that.  If it becomes more frequent you may have a problem....

I imagine we are one of "these online contractor accountants"...but our fees don't sound too different to some of the quotes above from "local" accountants.

There are lots of online accountants cheaper than us.  However most people understand that accountancy is not a homogenous product, so price is only one factor.  We've only lost a handful of clients to cheaper providers...though I'm sure there's probably countless more potential clients who visited our website together with that of a cheaper competitor and chose the cheaper provider.  No biggy.

I'm confident we win more clients from cheaper providers than we lose to them.

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By JCresswellTax
20th Apr 2015 14:17

Hi Maslins

I was obviously generalising about online accountants.

We have seen a few leave, a rising number on last year.  The majority claimed it was for lower fees.  Some were to online providers such as crunch and some were to one man band accountants.

My point was simply that I think we are seeing an increasing number (even if only a small percentage of our client base) moving for so-called cheaper fees.  This is maybe a direct result of an increasing number of 'contractor accountants'.

As you say, the clever clients will always stay.  Feeling that the satisfaction they get from knowing and trusting their accountant far outweighs a small cost saving.  The not so clever clients, well....

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Man of Kent
By Kent accountant
20th Apr 2015 14:28

Harder?

I don't think so.

I still quote similar to fees to what I quoted 2-3 years ago. I have a price guide which I then tweak based on type of business and gut feel.

I'm not aware of anyone choosing a cheaper accountant, nearly all new prospects are recommendations from existing clients and provided I don't [***] it up when we meet, they become new clients.

I've only had one client leave (well they have said they're leaving) to go to a cheaper accountant and save about £150 on a £1,700 fee. No issue about service they were just trying to cut costs

I was asked to fee match but I said no.

Whilst £150 isn't a huge amount its the principle and it comes back to @Maslins point - some people are just tight.

I've taken clients from some of the big online providers - personal service was key, like explaining how to do certain things rather than being e-mailed a pdf guide and speaking to the same person each time they called.

 

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By Matrix
22nd Apr 2015 12:33

No

I don't think it is getting harder, I convert most enquiries.

I think that if a potential client is that hung up on fees then it is not your loss.

Most of my new clients are referrals.  There are growing numbers in the contractor sector and they are welcome to go to SJD if they prefer.

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Glenn Martin
By Glenn Martin
20th Apr 2015 18:54

out of interest

whereabouts in North East are you?

It wasn't me that undercut you.

Honest.

 

 

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By Jim100
20th Apr 2015 21:30

Hope

 I guess the big accountancy firms have more to worry as they are twice as more expensive than anyone else. Perhaps there is hope after all though I still think the market place will become gradually become more difficult.  I do hope I am wrong 

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Kieran Phelan
By KPEM online
21st Apr 2015 07:04

Price
There are some who know the price of everything and the value of nothing........

For those in that category, let them go.

But make sure they understand what you do for them, why it benefits them, and what differentiates you from another firm.

Last of all, be confident in what you are offering and dont sweat losing any clients who are focused only on price.

Good luck.

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blue sheep
By NH
21st Apr 2015 07:52

yes

It is getting more difficult but it depends what market you are in or want to be in.

Recently we decided to test the market for contractor clients and posted a request for accountancy services on a well known website.  We stressed the fact that we were a contractor with only 12 invoices a year and low turnover, no vat, just accounts and CT.

We were sent 16 quotes, ranging from £250 to "from £1000 per annum".  Most of the replies we got were either grammatically incorrect or poorly written, didnt respond to the needs requested, or just seemed plain stupid (like the guy 50 miles away that said "please call into our office anytime")

We have, ourselves, obtained clients this way but we know we are basically only competing on price and have no other expectations.  By far the best and most loyal clients still (and always will) come through recommendation.

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By Ken Howard
21st Apr 2015 08:15

Personal service companies are easy for accountants with the right systems and setup.  I think too many accountants overcharge because they still do it the hard way, with long checklists, slow software, etc. We've taken on quite a few IT contractor companies who've been charged £1500-£2000 per year from other firms, often typical 2/3 partner High St firms or larger sausage factory production line firms - I just can't see how that kind of fee can be justified now we have have micro accounts, flat rate vat, easy online software, etc.

We charge £99 per month (no VAT) to include freeagent subscription so after a quick bit of training, the client enters their own expenses, invoices and we do bank import so no need to worry about bank recs etc.  FAC chucks out quarterly VAT figures on flat rate scheme.  FAC tells client how much dividend they can pay.  We have all clients on Moneysoft with batch RTI, so it's a one minute job every month to press the RTI submit button, so takes us virtually no time to do payroll.  No payroll year end returns anymore either, so that saves time (we get P11d dispensations).

When it comes to year end, we just chuck the FAC figures into VT, prep micro accounts, do the CT return in taxfiler - an hour at the most.  We then spend about another hour critically looking at the accounts, i.e. a final review to check what's in each heading, check for cut off, check for disallowables, etc.  The typical contractor may have a query every month or two which we easily deal with via email.  Maybe a phone call once or twice per year.   And a once a year tax review to highlight any missed opportunities and give a resume of any new developments.

£900 (75 * 12) is out fee for all that, and we even feel guilty charging that much as our timesheets show maybe 4-5 hours spent on the client in total per year, and total software cost for the practice is less than a thousand.  Multiply it out by a few dozen virtually identical clients and you've a highly profitable, stress free, risk free, high quality client base.

I honestly feel that some accountants are stuck in the old way of doing things.  I know some still just "have to" tick off the bank nominal to the bank statements, some just "have to" vouch the transactions to the invoice file, some can't bring themselves to accept the new micro accounts formats, and some can't tear themselves away from the old fashioned time consuming accounts/tax/payroll software they've used for decades.  Some still use the old trainee/semi-senior/senior/manager/partner system for all jobs, meaning all that wasted time on the reviews and admin.  

I remember my days as a manager in a typical town centre practice and personal service companies were a pain in the [***] because we weren't used to them and tried to shoe horn them into the internal work/systems pattern for "proper" businesses - back then, 15 years ago, the time taken was excessive often because the client would try to do their own book-keeping on software (Sage usually argh!), do their own payroll and beggar it up, foul up their expenses by including loads of disallowables, do their own VAT returns and make mistakes by not understanding the difference between cash and invoice vat accounting, and so the list of horrors went on.  Now I run my own firm, I take an hour from the outset to give clients chapter and verse on book-keeping using simple modern software and what they can claim for - all those problems in the past are removed at a stroke!

We've got our pricing right because we've not lost any clients to competing firms in over 10 years and have a steady stream of new referral clients and ex clients coming back after either permie jobs or sabbatticals etc.  Yes, there are cheaper out there, but clearly people think that £99 for a quality personal service is better than risking £60 for a sausage factory.  But if you're charging £150 per month, then you're at the top of the pricing structure and clients will be very tempted by offers of halving that fee or even less.  If firms can't charge less due to the time spent, then they seriously have to consider efficiencies to reduce their time and also getting cheaper more efficient software and systems.

We used to charge a limited company three times the fee of a sole trader, with partnerships being charged twice the sole trader fee.  We now charge them the same as a partnership, i.e. twice the sole trader fee, because companies are now so much simpler.

 

 

Thanks (2)
Replying to lionofludesch:
blue sheep
By NH
21st Apr 2015 08:30

I agree

[quote=Ken Howard]

I couldnt agree more with Ken, I cannot see how these firms justify such a high fee (by the way we do charge £60 + VAT a month and we give a personal service and we do not make sausages, mmmm sausages for breakfast yumyum)

 

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Replying to lionofludesch:
By JCresswellTax
21st Apr 2015 09:18

What advice do you give

Ken Howard wrote:

Personal service companies are easy for accountants with the right systems and setup.  I think too many accountants overcharge because they still do it the hard way, with long checklists, slow software, etc. We've taken on quite a few IT contractor companies who've been charged £1500-£2000 per year from other firms, often typical 2/3 partner High St firms or larger sausage factory production line firms - I just can't see how that kind of fee can be justified now we have have micro accounts, flat rate vat, easy online software, etc.

We charge £99 per month (no VAT) to include freeagent subscription so after a quick bit of training, the client enters their own expenses, invoices and we do bank import so no need to worry about bank recs etc.  FAC chucks out quarterly VAT figures on flat rate scheme.  FAC tells client how much dividend they can pay.  We have all clients on Moneysoft with batch RTI, so it's a one minute job every month to press the RTI submit button, so takes us virtually no time to do payroll.  No payroll year end returns anymore either, so that saves time (we get P11d dispensations).

When it comes to year end, we just chuck the FAC figures into VT, prep micro accounts, do the CT return in taxfiler - an hour at the most.  We then spend about another hour critically looking at the accounts, i.e. a final review to check what's in each heading, check for cut off, check for disallowables, etc.  The typical contractor may have a query every month or two which we easily deal with via email.  Maybe a phone call once or twice per year.   And a once a year tax review to highlight any missed opportunities and give a resume of any new developments.

£900 (75 * 12) is out fee for all that, and we even feel guilty charging that much as our timesheets show maybe 4-5 hours spent on the client in total per year, and total software cost for the practice is less than a thousand.  Multiply it out by a few dozen virtually identical clients and you've a highly profitable, stress free, risk free, high quality client base.

I honestly feel that some accountants are stuck in the old way of doing things.  I know some still just "have to" tick off the bank nominal to the bank statements, some just "have to" vouch the transactions to the invoice file, some can't bring themselves to accept the new micro accounts formats, and some can't tear themselves away from the old fashioned time consuming accounts/tax/payroll software they've used for decades.  Some still use the old trainee/semi-senior/senior/manager/partner system for all jobs, meaning all that wasted time on the reviews and admin.  

I remember my days as a manager in a typical town centre practice and personal service companies were a pain in the [***] because we weren't used to them and tried to shoe horn them into the internal work/systems pattern for "proper" businesses - back then, 15 years ago, the time taken was excessive often because the client would try to do their own book-keeping on software (Sage usually argh!), do their own payroll and beggar it up, foul up their expenses by including loads of disallowables, do their own VAT returns and make mistakes by not understanding the difference between cash and invoice vat accounting, and so the list of horrors went on.  Now I run my own firm, I take an hour from the outset to give clients chapter and verse on book-keeping using simple modern software and what they can claim for - all those problems in the past are removed at a stroke!

We've got our pricing right because we've not lost any clients to competing firms in over 10 years and have a steady stream of new referral clients and ex clients coming back after either permie jobs or sabbatticals etc.  Yes, there are cheaper out there, but clearly people think that £99 for a quality personal service is better than risking £60 for a sausage factory.  But if you're charging £150 per month, then you're at the top of the pricing structure and clients will be very tempted by offers of halving that fee or even less.  If firms can't charge less due to the time spent, then they seriously have to consider efficiencies to reduce their time and also getting cheaper more efficient software and systems.

We used to charge a limited company three times the fee of a sole trader, with partnerships being charged twice the sole trader fee.  We now charge them the same as a partnership, i.e. twice the sole trader fee, because companies are now so much simpler.

 

 

Around IR35 and travel expenses?

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By Jim100
21st Apr 2015 10:42

fair

Ken's model has worked very well as its based on fair charges unlike some that exploit the customer and hence they ultimately go somewhere else when they find other accountants that are charging a much lower fee.   I too have tested the market and contacted other accountants and some were charging £250 per month for a contractor

Ken has summarised the situation very well that it doesn't take too long nowadays to file accounts etc for a contractor hence fees have to come down like it or not.   

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By Mrs_G
21st Apr 2015 11:26

Thank the Lord for KPMG coming into the SME market

I have been saying for quite some time that us as a profession are completely daft by constantly undercutting each other and driving down prices. I get market forces, but look at solicitors as a profession - they clearly value their knowledge.

Last month I commissioned some market research to find out the prices of 20 competitors in the area. I was pretty shocked to find that we were the most expensive, with most of them not charging for payroll, personal tax returns for directors, nothing or hardly anything for property accounts, etc.

Particularly interesting, as I actually think we are very reasonably priced for what we do. So whilst we probably have the highest client retention rate of them all, and very rarely do we get a dispute on a bill, it seems to be at the cost of overservicing clients for the fees charged. Not something I would have said 5 years ago.

As for KPMG - the posted headline rates are the best news I've had for a long time. Much more in line with where I value our profession's knowledge. One hopes it will serve to drive the prices back up to where they should be.

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Replying to monksview:
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By Jim100
21st Apr 2015 17:42

Price

Mrs_G wrote:

I have been saying for quite some time that us as a profession are completely daft by constantly undercutting each other and driving down prices. I get market forces, but look at solicitors as a profession - they clearly value their knowledge.

Last month I commissioned some market research to find out the prices of 20 competitors in the area. I was pretty shocked to find that we were the most expensive, with most of them not charging for payroll, personal tax returns for directors, nothing or hardly anything for property accounts, etc.

Particularly interesting, as I actually think we are very reasonably priced for what we do. So whilst we probably have the highest client retention rate of them all, and very rarely do we get a dispute on a bill, it seems to be at the cost of overservicing clients for the fees charged. Not something I would have said 5 years ago.

As for KPMG - the posted headline rates are the best news I've had for a long time. Much more in line with where I value our profession's knowledge. One hopes it will serve to drive the prices back up to where they should be.

 

I hope you are right that prices will go up and have just seen KPMG exorbitant rates.  I just cannot this happening simply there are just too many accountants around nowadays.  Only way price will go up if the government suddenly decides defines what is an accountant which we know will not happen or introduces more complex legislation where there is going to be a need for accountants.  Its going to be dog eat dog which will see further falls in price 

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By MC1
21st Apr 2015 14:38

@Mrs G

Hi Mrs G

Could I ask how you went about commissioning the market research please? - I think I would like to do the same.

Thank you

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By petestar1969
21st Apr 2015 15:03

Hmm

I lost a one-man band contractor client to one of the sausage factories (not SJD) as they persuaded him their fees were lower than mine. 

I explained to him that my fees were actually less than they were proposing to charge him and he was basically being fooled as they would be charging him a monthly fee when I was charging for each task as I finished it.

He didn't believe me and then used the other old chestnut excuse for leaving (they are nearer to where he lived).

I let him go, no loss to me.

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By morgani
21st Apr 2015 15:07

Plenty for us

We are still getting plenty of enquiries and getting plenty of work.

I must agree with @KenHowards point though about the high fees.  Particularly for contractors it is such low time work that it can easily be donw for these lower end fees with good returns.  I very rarely see any of these with an average recovery of less than £150 an hour (most much higher) and we are under £1k a year including VAT.

IT is a new world embracing technology and we all need to do the same.  If we don't we get stuck with time-consuming costly processes which either have to be absorbed or passed on and eventually may lead to a decline in business.

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Man of Kent
By Kent accountant
21st Apr 2015 20:02

@Jim100

I've noticed its a continued theme of your postings - work being harder to find and prices being driven down.

I just don't see it, perhaps its the type of prospects you are finding. What type of marketing are you doing, where do you look for clients and what are your usp's?

I find that by demonstrating to a prospect that you know what you are talking about and by showing an interest in them and their business, then the deal is done and fees are very much a secondary consideration - provided you're not far too expensive.

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Replying to bettybobbymeggie:
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By Mrs_G
22nd Apr 2015 15:10

@Jim100

It's down to us as a professional to value ourselves. I don't think it's anything to do with qualified / unqualified or term protected / not protected argument. The point is you think that KPMG's prices are exorbitant. I think they are completely reasonable. It's the mindset of the accountancy profession that is the problem in my view.

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Replying to bernard michael:
blue sheep
By NH
22nd Apr 2015 15:24

KPMG prices?

Mrs_G wrote:

It's down to us as a professional to value ourselves. I don't think it's anything to do with qualified / unqualified or term protected / not protected argument. The point is you think that KPMG's prices are exorbitant. I think they are completely reasonable. It's the mindset of the accountancy profession that is the problem in my view.

Do you have a link to these prices? I cannot find them anywhere

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Replying to bernard michael:
By petersaxton
22nd Apr 2015 15:42

Try google

NH wrote:

Mrs_G wrote:

It's down to us as a professional to value ourselves. I don't think it's anything to do with qualified / unqualified or term protected / not protected argument. The point is you think that KPMG's prices are exorbitant. I think they are completely reasonable. It's the mindset of the accountancy profession that is the problem in my view.

Do you have a link to these prices? I cannot find them anywhere

https://www.kpmgenterprise.co.uk/

 

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Replying to bettybobbymeggie:
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By Jim100
23rd Apr 2015 00:02

Low Fees

Kent accountant wrote:

I've noticed its a continued theme of your postings - work being harder to find and prices being driven down.

I just don't see it, perhaps its the type of prospects you are finding. What type of marketing are you doing, where do you look for clients and what are your usp's?

I find that by demonstrating to a prospect that you know what you are talking about and by showing an interest in them and their business, then the deal is done and fees are very much a secondary consideration - provided you're not far too expensive.

Where I am based I am seeing contractor fees at £55 per month (on first page on google based on a regional search).  I see limited company accounts for £250 (done by accounting technicians).  I contacted a very success accountancy practice in our city centre as a I see their name on a regularly basis  and they only charge around £600-£800 (no VAT Returns)  per annum for a contractor (when I was expecting them to come out with twice as much). Contractors just want a filing service and if they see low fees they are not that bothered with customer care etc.

Admittedly I have picked up some lucrative larger clients and have kept them happy by being proactive and communicating them on a regular basis as well as being flexible to their requirements.  I don't have masses of work but there are signs things are finally picking up after quite a lot of toil. On the marketing I have tried most thing I have had minor success. I have tried to aim for start ups but zero success rate.  Networking is a waste as full of accountants.  Referrals have worked on a limited basis.  Tried advertising zero success. Written Blogs and responded to a number of questions on other forum but nothing has come from it.  Anyway could go on and on.    I thought okay lets try to lower price which I have with number of quotes I have submitted recently - still waiting to hear the outcome.    I will let you know if it worked or not - fingers crossed.  It isn't all bad but not as good as it should have been.  I

Sorry I am not normally that pessimistic things are getting better and there is more activity than before - I do agree with others that the larger practices may lose out due to pressure on price  which may be good news for sole practitoners' like ourselves

 

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By petersaxton
21st Apr 2015 20:05

Micro accounts

What's this fuss about micro accounts? My software has a report for micro accounts and one for abbreviated accounts. It takes no difference in time.

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By North East Accountant
22nd Apr 2015 10:05

Thank you all

Thank you everyone for your comments and it has given me renewed hope that all is not lost.

Sorry Glennzy but I wish to stay a bit anon as NEA rather than disclose my location.

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paddle steamer
By DJKL
22nd Apr 2015 15:42

Future risk

If there is a future risk to pricing at the lower end of the food chain re fees I suspect,long term, it is cloud services and services provided from overseas.

As not meeting/seeing/speaking to one's accountant becomes more prevalent the ability to provide the service provision from countries with far lower labour costs may have an impact.

I believe there is a limit to the types of work that can be conducted from abroad but did start to think on the issue when considering a few of my clients, who these days I deal with via the internet/e mail. Is there really a difference dealing with an Edinburgh accountant when one lives in London to dealing with a service provision from India/China when one lives in London?

I appreciate there will possibly be regulatory issues/ trust issues within any such provision, the providers needing agent references etc, but I suspect that can readily be overcome using a UK registered company with an offshore subsidiary or myriad other perms.

There are a lot of service industries who, by their nature ,have payroll as their most significant cost, I suspect they will become more and more susceptible to overseas competition.

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blue sheep
By NH
22nd Apr 2015 15:55

KPMG

Clearly no small business in their right mind is going to KPMG at those prices!

I find it hard to see how a minimum fee of £275 per month can be justified, but I suppose they want to wheedle out those lower class clients that only make less than 100k profit a year....

What made me laugh was the "our low monthly price" line

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Replying to DJKL:
By petersaxton
22nd Apr 2015 16:22

Marketing

NH wrote:

Clearly no small business in their right mind is going to KPMG at those prices!

I find it hard to see how a minimum fee of £275 per month can be justified, but I suppose they want to wheedle out those lower class clients that only make less than 100k profit a year....

What made me laugh was the "our low monthly price" line

Marketing is little different to lying.

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Man of Kent
By Kent accountant
22nd Apr 2015 16:22

As usual

The devil is in the detail - prices from £275 per month for a trading limited company.

The reality is a client I may charge £275 a month for bookkeeping, vat, payroll, accounts, CT return, SATR's - KPMG will probably be charging £500+.

 

 

 

 

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Man of Kent
By Kent accountant
22nd Apr 2015 16:24

@Mrs_G
One of your competitors could probably charge half of what you charge, another could be double. If the client values the service and price is not a deciding factor/issue, then they will not move. 

The same reason why KPMG will appeal to some and not others.

 

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Glenn Martin
By Glenn Martin
22nd Apr 2015 16:36

I think Work Filters Downward

For me the firms that will struggle are mid tier firms with 4 or 5 partners. As they cannot compete with top firms on reputation wise and their lower to mid sized clients are easy fodder for the "one man band" guys that many AWEB contributors are. I see these size firms as the ones to get work from as we can do as good if not better job for a more competitive fee, be more responsive to client needs etc.

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By petersaxton
23rd Apr 2015 12:35

My experience

I do get people who phone up with the question "how much for a tax return?" and when I explain that it depends on the work needed but will be from £200 - £400 plus VAT I don't usually hear from them again. For limited companies I would give an indication of about £1,000-£1,500. These people who start off by asking the price question rarely become clients. The people who want a good service and a relationship with their accountants are the clients I want. Once a person is happy with you and your work then price is rarely an issue. There are always the ridiculous exceptions of course!

I don't sell myself based on price I sell myself on being friendly (yes, honestly!), knowing what I am doing (rather than being a super technical accountant) and experienced (although I don't look as old as I am!).

If I lose a client my attitude is that it frees up time to give service to other clients or relax more rather than that I am losing money.

If I was Jim100 I would concentrate on the types of clients he wants and don't worry about the rest. If you are struggling to get a reasonable number of reasonable clients there must be something wrong and you have to address it.

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Replying to markabacus:
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By Jim100
23rd Apr 2015 22:42

Sure it will get better.....

petersaxton wrote:

I do get people who phone up with the question "how much for a tax return?" and when I explain that it depends on the work needed but will be from £200 - £400 plus VAT I don't usually hear from them again. For limited companies I would give an indication of about £1,000-£1,500. These people who start off by asking the price question rarely become clients. The people who want a good service and a relationship with their accountants are the clients I want. Once a person is happy with you and your work then price is rarely an issue. There are always the ridiculous exceptions of course!

I don't sell myself based on price I sell myself on being friendly (yes, honestly!), knowing what I am doing (rather than being a super technical accountant) and experienced (although I don't look as old as I am!).

If I lose a client my attitude is that it frees up time to give service to other clients or relax more rather than that I am losing money.

If I was Jim100 I would concentrate on the types of clients he wants and don't worry about the rest. If you are struggling to get a reasonable number of reasonable clients there must be something wrong and you have to address it.

I like your pragmatic approach to work and life in general.  "If I lose a client my attitude is that it frees up time to give service to other clients or relax more rather than that I am losing money" Very refreshing to hear as I losing a client does bug me.  

I do have a niche with is international businesses/individual both incoming and outgoing.   I have had gained a few tiny clients but not compared to the effort I have put in.  I was hoping one of them would scale up as I have worked for international start up's before and did enjoy the work but not happened for whatever reason

Its been three years now and overall achieved modicum success.  In fact my turnover has gone down which is disappointing to say the least.  

I also realise to keep any expectations in check as I am still adamant that its really tough out there for accountants despite what ever anyone else says

Its not all doom and gloom, there are signs of pick up but there are also danger signs with a couple of major clients who are struggling to stay afloat (which will be a major loss)

I do have a good relationship with my clients as like you I communicate well with them and proactive and regularly will anticipate their needs and contact them first before they contact me. What I am not getting is the referrals, possible clients contacting me out of the blue etc.  This is what I need to look into.  

Anyway, there is a lot more to worry about in life than lack of clients and my competitors.  I will just enjoy the summer and relax

 

 

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Man of Kent
By Kent accountant
23rd Apr 2015 09:33

Agree with Peter

about the prospects shopping on price.

@Jim100 - how do you knwo the city centre firm is successful - perhaps they just spend a lot on advertising?

What is your ideal client? Work that one out and where you can find them, then you'll be on to a winner.

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ghm
By TaxTeddy
23rd Apr 2015 09:36

Useless clients - pass them on

What an informative thread

I can relate to so much of what has been posted here - it seems we are all experiencing the same reactions from prospective clients.

It put me in mind of Spike Milligan's war memoirs where he talked about the really useless soldiers who were constantly being 'posted' from one regiment to another - being constantly passed on because they were hopeless.

Perhaps this is what happens with this pool of useless clients - forever drifting from one accountant to the next.

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