What would you quote?

What would you quote?

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I've never done accounts for a Personal Trainer before, so not sure of the work load involved. He is a sole trader. Would you say that quoting them £150 is reasonable? I haven't met with him yet, so want to be able to make an informed decision when talking fees.
I find it hard knowing what is a good price because the clients that come to me from other practices complain of the quality of services and the prices vary so much in my area.
I have one client that was charged £300pa by old accountant just to do the tax return, but never advices or asked for expenses to offset. This client always had to pay at least £400 extra tax a year and when I looked at all their business, they only paid £70.
To the established accountants out there, how do you build your fees? Is it good to have a base and then increase fees dependant on work load, or just have set fees regardless?

Sorry for all the questions rolled into one.

Replies (19)

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By WhichTyler
24th May 2013 17:35

Compare

If it helps, PT's in my part of London charge about £40ph. S/he shouldn't have a problem if you do the same...

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By chatman
24th May 2013 18:17

I think £150 is very cheap
I don't see how you could do anyone's accounts for less.

I think having set fees is very good. It stops me from underpricing. There is a great description of what happens otherwise from wfewtrell at https://www.accountingweb.co.uk/anyanswers/ffap-squosh-software

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Replying to rockallj:
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By GPartnership
24th May 2013 18:34

Very useful, thank you.
Read wfewtrell and shall look into the software

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By peaky99
24th May 2013 18:36

Clients who require low fees usually have other problems and a big drain on your resources.

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By User deleted
24th May 2013 19:27

Damn cheap

I'd be charging at least twice that. But then my theoretical hourly rate is £75 + vat so £150 would only give me two hours. To contact the client to request the info, chase them (inevitably), receive it & check it, chase up what hasn't been provided / query anything odd, prepare the accounts & return, engage brain cells, issue them to the client, carry out the ML checks etc., file them. Well for only two hours I'd be feeling like I couldn't stop and think. 

Don't focus so much on what everyone else charges, focus on what you want to make from a job. If someone down the road offered to do them for a fiver would you offer £4?! If you start off charging peanuts its hard to increase them for the monkeys paying them. Start as you mean to go on.

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Replying to Justin Bryant:
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By GPartnership
24th May 2013 21:56

£75+ VAT for an hourly rate..

£75+ VAT for an hourly rate....All I can say is congratulations.  Thanks for the food for thought tho.

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Replying to John Stokdyk:
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By chatman
24th May 2013 23:00

£150 for a four-hour job is £37.50/hour, which is very low

GPartnership wrote:
£75+ VAT for an hourly rate....All I can say is congratulations. 

Even so, £150 for a four-hour job is £37.50/hour, which is very low.

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Replying to Justin Bryant:
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By andy.partridge
24th May 2013 23:00

Agree totally

Flash Gordon wrote:
Start as you mean to go on.

It becomes difficult to change a client's perception of you later on and so there is likely to be resistance if you try to increase fees.
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By Jekyll and Hyde
24th May 2013 19:46

my minimum used to be £250 plus vat
Up until i sold last year i would charge minimum £150 for accounts and £100 for tax return.

If client did not want to pay that then they could use another accountant.

Having said this. If i went on own again, i would ned clients and might start with £200 to build up client base. Over time turning same said client into a £300 client.

For me any simple sole trader job, including annual admin, is a 4 hour job at least.

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By 401K
24th May 2013 20:40

Why not price each element of the job just like buying a car. Start with base price and add on any changes or additions the client requests. 

Set a minimum amount of time say 4 hours. Be familiar with the cost of each job you need to do.

Interview your client, explain this. Point out that bespoke, non standard work etc will cost more then agree how to proceed. This creates an immediate air of professionalism.

Remember how can you advise a client on business matters (from tax point of view of course) if you dont understand your own overhead costs and pricing.

You can't ignore nearby competitors but you don't know their overheads or what they really do so don't get caught up too much.

Just sell your own unique services & clarify this to any new client.

For sake of an answer I'd say £200 for up to 1st 4 hours which I beleive should cover it.

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By GPartnership
24th May 2013 23:09

When I give a quote I do say starting from, but up until today and reading your feedback, I wasn't sure how to increase fees and yep, ending up cheating myself overall. Peaky99 said earlier about the clients requiring low fees being the ones who are the most draining...THIS IS SO TRUE!!
Going forward, fees will be different for the new clients approaching!

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By User deleted
25th May 2013 08:10

£75 per hour

£75 per hour isn't that impressive. It's just a matter of getting the right clients. If you sell yourself short why should anyone else value your time and knowledge? 

One of my first clients was a limited company - I quoted them £355 + vat for annual accounts & CT. I then found out they'd been paying three times that without quibbling (they'd changed because they didn't understand what the accountant told them). It was a longer job than I expected every year, I had to include picking up & returning the books which always included a quick (or longer) chat, so 3 hours effectively wasted there each year. And I couldn't just hike the fees up. So not my most profitable job....

 

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Euan's picture
By Euan MacLennan
25th May 2013 10:57

If you must quote a fixed fee

... make it clear that it is for the first year only and will be reviewed for subsequent years when you have seen how much work is involved.

We don't quote fixed fees, but instead give an estimate and our estimate for sole trader accounts plus income tax return would usually be £250 plus VAT, like Jekyll & Hyde.  Don't forget to mention VAT if you are registered, but the client is not - it will cost him £300, rather than £250.

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By GPartnership
25th May 2013 11:37

I do always tell clients that's fees will be reviewed every 6 months, if they want book keeping involved. They all seem happy with this. Even still, I need to make sure that the value of what I do is also reflected in the prices.

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Me!
By nigelburge
25th May 2013 12:37

I have a number of these

and I usually quote £375 to £400 all in.

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By husainweb
25th May 2013 12:45

"Start as you mean to go on"

The best advice has already been given, "start as you mean to go on".

When we started out we were charging £600 to a limited company for accounts and CT. Our minimum fee for this is now £1200 and we only discount if we're taking on more than one company.

Our minimum sole trader price is £350 but we charge a discounted rate of £200 to mini-cab drivers. The price NEVER goes lower than that.

In your case WhichTylers suggestion of £40/month makes a lot of sense to me. It's a number they will already be comfortable with and it allows you to take time to give one-to-one advice to the client rather than just processing paperwork.

If anyone beats you up on price, walk away because they are (as everyone has already said) almost certainly not going to be a profitable client.

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Replying to NYB:
Me!
By nigelburge
26th May 2013 18:05

And.................

husainweb wrote:

If anyone beats you up on price, walk away because they are (as everyone has already said) almost certainly not going to be a profitable client.

................ they will also most certainly be a right royal PITA. ☺

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By ver1tate
04th Jun 2013 11:32

sell your own unique services & clarify this to any new client.

401K. For a fairly new member, you seem to have hit the nail on the head.The fees you charge will depend to a great extent on where you are based. London fees will be considerably more than those in the North of England, and even more than those in Scotland. However, the main issue is to charge fees both you and the client are happy with. Don't undervalue your skills.

You will find the biggest threat comes from unqualified accountants, and even some in the profession who are moonlighting.

I am still at a loss to understand why anyone can call themselves an accountant without having gained at least one degree. Other trades and professions require this, lawyer, chemist etc. You cannot even drive unless you have passed a driving test.

When I took early retirement from the profession, I was at first enticed into offering lower rates; but this is a two edged sword, as many clients look at your fees and ask themselves 'is he any good'

I work mainly with one man / Self Employed and give a reasonable quote for accounts filing, plus salaries/ wages (if any), plus extra for VAT returns. I tell new clients that this is based on the information elicited at our first, free, half hour meeting, and fees will rise by 5% yearly, also rise or fall as their business rises or falls. (I say 'elicited' as clients normally 'give' only sparse details, which does not make for accurate quoting)

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By Steve Holloway
04th Jun 2013 11:36

Fixed fees ....

sole trader, no balance sheet ... £318 ( no VAT). Mind you it took me about 8 years to realise that this was the way to go and another 3 or 4 to clean up all the clag of different charges that had arisen in the early years.

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