My Accountancy fees and Experience

My Accountancy fees and Experience

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Dear All,

I have started my accountancy practice three months ago. I have nearly 10 years of UK Public practice experience and I am a fully qualified Accountant. I do not know what is the present rate in the market bearing in mind I am a new accountant. I am 31 years of age and working from home. What/how should I charge them at this stage? 

In addition, how clients look an accountant who have just started?

Is it possible that potential new clients only take their accountants who are in their middle age i.e. late 30s or 40s? I am well experienced in tax and accounts both in compliance and advisory. 

If I take a small office and call clients in my office, would this make any difference?

Your responses is appreciated

Thanks

Replies (19)

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By sjmaccounting
01st Mar 2013 14:07

on the positive side

When I set up 21 years ago one of my first clients said he was advised to look for an accountant new to practice as they would be hungrier for the work and likely to be eager to please etc.

Also, can't ever recall a prospective client asking me how long I had been self employed.

My office is now in an extension to the house, but for years it was either the kitchen table, spare bedroom or a converted garage - think this gives off the impression there are no unnecessary office costs and, therefore, reduced fees.  It also allows me to take early evening/weekend appointments as smaller business clients prefer this.

Good Luck !! 

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Replying to Matrix:
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By Lizibeth
06th Mar 2013 19:28

Why dont you phone a few local accountants and ask what they charge for certain types of work, i have built up a practice of 150 clients in 3 years, ALL by word of mouth!! My clients like that i charge a set price and am avaliable evenings and weekends !! I think service is important together with trust and quality of work !!

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By mrme89
01st Mar 2013 14:13
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By ChrisScullard
01st Mar 2013 14:31

I started when I was 34 so not that dissimilar in age.  I have found that I tend to attract younger clients in their 20s and 30s.  Many have commented that they find me easier to talk to and approach than a previous, older accountant (not having a dig at anyone here - just relaying comments).

Most of my clients are startups or young businesses, and many of them also work from home so there was a good deal of mutual empathy from that as well.  Now that I've moved on to a small (cheap) office, as have many of the early clients, it helps with the relationship as we're going through similar things with our businesses and they seem to like that.

One thing I have never done is to give the impression that things are going better than they are.  I was quite open that I started in my spare room because I had to and money was tight.  I'm not one to tell clients that business is booming when it's only going OK and I'm not afraid to answer the question 'how's it going' honestly - it's OK, getting better but still hard work and the business hasn't got to where I want it to yet.  People seem to appreciate that honesty and I believe it helps foster a good client relationship

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By ShirleyM
01st Mar 2013 14:39

Middle age????

Is it possible that potential new clients only take their accountants who are in their middle age i.e. late 30s or 40s?

Hmmm ... that must mean I am in my dotage. It doesn't seem to put my clients off though (thank goodness) so maybe clients prefer accountants who are past 'middle age' :)

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By hham12
01st Mar 2013 14:40

Thank you very much for your comments. It really helped.

 

 

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Man of Kent
By Kent accountant
01st Mar 2013 14:58

44

I started my own practice less than 2 years ago at the age of 44.

My office is a separate building at the back of my house. Its big enough for 4. I have no intention of moving to a 'proper' office.

I've never had any issues over my age, how long I've been in practice or where I work from.

What should you charge? If you look around various other accountancy firms websites you'll find some comparable rates.

For me, based in the South East of England,prices for preparing accounts and CT returns for limited companies:

Turnover - up to £50k charge £600 - £900

Turnover - £50k - £100k charge £750 - £1,250

Turnover - £100k - £250k charge £1,000 - £1,500

Turnover - £500k+ charge £1,500+ 

Prices vary depending on the complexity of the business and quality of the accounting records.

 

 

 

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By Pelican
06th Mar 2013 11:52

I started up my business 3 years ago at the age of 25.

 

I am currently in full-time employment as well as running my practice.

I spent about £50 on flyers and put these through peoples/business door but have not had a single response from this.

I set up facebook and twitter pages and have had a few people through this and my website.

Most of my clients have been through word of mouth.

No one has mentioned about me working from home although they seem please when I say I do and that I dont have the cost of paying for an office so their fees will be low.

For someone who has done no/little advertising and has a young family my turnover will be hitting £10K for which I am happy with.

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By David Winch
06th Mar 2013 12:44

Please, Let's Get Things In Perspective

There are two separate issues here.  Firstly the question of how much to charge, and secondly the question of age and experience.

All clients are different and all work is different.  Even if the work is similar, verging on identical, different clients will value it differently.  It is your duty to charge different prices for different value.

Clients don't buy your time or any other arbitrary measurement of the effort you put in.  They buy the value of the results you create by your effort.  Clients have no interest whatever in how long you took to create the result, other than wanting it delivered on time, or in any other costs or disbursements - be they higher, lower or similar to your competitors.

If they tell you they are interested it is because they suspect you are overcharging them and, if they suspect this, either you have not helped them understand for themselves the value of the result, or you really are overcharging!

So charge according to the value they say they will get out of the result.  Offer them a price which gives them a superb return (value) on their investment (your price).  Naturally you also want a superb return (your price) on your investment (your actual cost - not 'charged out' cost - of delivering the result).  If cost and value aren't far enough apart to allow this, you'll need to push them further apart.

Age and experience can have a bearing on your credibility - the trust the client has in you being able to do a brilliant job - but not a huge impact on your prices.

The most you should add for any 'personal value' is in the order of 20%, and only then if you are one of the top people in your field, are one of the few such experts available at the time, and you have a way of working which consistently produces the best results available to anyone.

David Winch

Make Sales Without Selling and Get Paid What You're Worth

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Replying to justsotax:
Man of Kent
By Kent accountant
06th Mar 2013 14:12

How much is that?

David Winch wrote:

 

So charge according to the value they say they will get out of the result.  Offer them a price which gives them a superb return (value) on their investment (your price).  Naturally you also want a superb return (your price) on your investment (your actual cost - not 'charged out' cost - of delivering the result).  If cost and value aren't far enough apart to allow this, you'll need to push them further apart.

 

£3.50?

Come on David, less of the sales pitch and more useful advice. Someone starting out is hardly going to plunge headfirst into, dare I say it...value pricing...there I said it!? 

...ducks and runs for cover.

 

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By Malcolm McFarlin
06th Mar 2013 12:47

Marketing idea

A bit off your topic- but you may find it useful looking at local free brochures that are posted out which often shows businesses who have just started up and are looking for business themselves. My son has a small portfolio of clients [he is only 28] and contacted a number of these businesses.  As a result two signed up and he has since had a referral from one of the ones who originally signed up.

Business Link and HMRC sometimes do 'road shows' for new businesses which may be a useful source of business to you.

A lot of clients are put off with an expensive looking office since they fear they may have to bear some of the cost

Good luck

Malcolm McFarlin

www.mandrtaxadvisers.com

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By robert
06th Mar 2013 14:01

One thought if you start low to get the business it is difficult to raise your prices to a sensible level later without upsetting your clients.

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By finegana
06th Mar 2013 14:28

Great responses

Plenty to think about there, thanks given for the pointers that I agree with...how much to charge, if only the answer was simple :-D

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By robert
06th Mar 2013 14:36

Agree it is difficult - depends on so much - where you are, qualifications, experience etc.  Probably start with something you feel gives you a reasonable (ok what is reasonable to one is not to another) and if necessary increase it by a relatively small % year on year?

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By I'msorryIhaven'taclue
06th Mar 2013 14:41

The Other Side of that Coin...

And further to David's post, after you've decided just how much above £3.50 you are going to charge then address the important matter of just what you agree to do for that price.

For example, does your price cover bare accounts and tax preparation, or does your client expect more than that (tax planning, sorting his everyday compliance issues, free advice etc etc). Be warned, your client is a professional hustler, many times more practised and skilled than you in the art of negotiation. You need to set out clearly just what you will do, and conversely what you won't, for that price.

Accountants are generally the world's worst negotiators. I recommend a trip to Tunisian bazaar: go haggle for and buy a few pots and rugs. If your budget or holiday plans don't stretch to that, then alternatively learn from Brian's mistakes:

http://www.youtube.com/watch?v=u75XQdTxZRc

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Replying to JLTJPT:
Man of Kent
By Kent accountant
06th Mar 2013 14:52

Agreed

I'msorryIhaven'taclue wrote:

 address the important matter of just what you agree to do for that price.

Agreed, don't leave the services open ended as there's always one who will take the proverbial.

Love the video.

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Replying to JLTJPT:
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By I'msorryIhaven'taclue
06th Mar 2013 15:09

Are you Shaving Yet?

hham12 wrote:

Is it possible that potential new clients only take their accountants who are in their middle age i.e. late 30s or 40s? I am well experienced in tax and accounts both in compliance and advisory.

Nope, life's all downhill after 40. Clients worry you might die before finishing their accounts.

 

hham12 wrote:

If I take a small office and call clients in my office, would this make any difference?

Only if the office is very small and the clients overweight.

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By avlarkin
06th Mar 2013 15:10

Low pricing
Don't start with low pricing as it devalues our profession and will make it difficult for you to expand in the future. Lawyers have never discounted their fees but auditors seem to have fallen into this trap!

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By David Winch
07th Mar 2013 13:28

Why Can't They Start As They Mean To Go On?

@Kent accountant "Someone starting out is hardly going to plunge headfirst into, dare I say it...value pricing"

Why not? It's not rocket science?

Value based pricing is:

Non-adversarial, non-aggressive, non-confrontationalWin-win, peer-to-peer, where best interests are alignedFrank and open, allowing the best job to be doneRisk-, glory- and blame-sharing - No scapegoatsFocused on outcomes, making investment justifiableAbout fixed fees with no hidden extrasAn environment where the Accountant is not discouraged from getting better at their jobBased on trust so less time needed on 'due diligence'Where the Accountant can get paid more for delivering the result quickerWithout price wars, or time wasted on haggling

Why wouldn't anyone want to start out this way?

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