You can't please some people
You bend over backwards for people and they are still ungrateful.
What do you think about this series of emails?
I received this email from her on 20/12/09:
“I was given your details my a client of yours XXXXXX.
I have an online business which I have to file my first accounts for. I have been contacted by Companies House to inform me that the deadline for submitting these returns will be 26/01/2010. As I am a new company I'm not sure of the process or what is required.
I started trading on 26/03/2008 but didn't make my first sale until August 2009. It has taken a while for business to pick up so I've only made a few sales. However I have kept as many receipts for business purchases as I can.
Please would you be able to tell me what your rates are and what you would need from me in order to submit my first accounts.
I look forward to hearing from you soon.
Many Thanks”
I replied on 20/12/09:
“Dear XXXXXX
Thank you for your email.
My rates are £30 an hour plus VAT and I usually charge around £400 for statutory accounts, abbreviated accounts, tax return and corporation tax computations.
In this case it would appear that less work would be required but I could tell you what would be a reasonable fee once I had more information. I would need to meet with you for money laundering reasons.
Would you be able to visit me sometime? We would need to do things quickly given the time remaining.
Could you bring the following:
All the business records, inc. bank statements, records of sales, records of purchases and other expenses, certificate of incorporation, memorandum and articles.
Proof of ID (eg passport or photo driving licence) and proof of address (eg. personal bank statement, utility bill, etc.)
I am available most times.
If you are able to visit please email or call and we can make an appointment.
Peter”
Today I received an email from her:
“Hi Peter,
Thank you for submitting my accounts.
I've recieved your invoice this morning. I am quite suprised at the figure as your previous email below stated that there would be less work involved and you would provide me with a quote, which I never recieved. In response to your email I did state that your normal £400 fee would be above my budget before you started preparing my account.s
Please would you be able to provide me with a more detailed break down of the hours spent on preparing these documents.”
I have sent the following response:
XXXXXX
You shouldn’t be surprised at the time I had to spend on preparing your accounts.
Although you knew the deadline for submitting the accounts was 26/01/2009 you waited from 31/03/2008 until 20/12/2009 before asking for my help. Even then you cancelled a couple of appointments before finally meeting me on 31/12/2009. I again stressed the urgency of the matter yet it wasn’t until 14/01/2009 that you provided a spreadsheet of your transactions. It was even later that you provided an incomplete set of company bank statements.
I had to deal with the fact that you had shredded bank statements and were not able to provide replacements. This involved a great deal of investigation on my part right up to a few hours before the final day of submission.
You may have only made a few sales starting August 2009 but what you didn’t give an indication of at that stage was the scale of your transactions up to 31 March 2009. You made:
36 PayPal payments which were funded by a mixture of yourself and your company,
30 bank payments plus other transactions unknown due to your shredding of bank statements,
12 bank receipts, and
42 business payments made by you personally.
I had to record these on an extended trial balance and produce statutory accounts for HMRC and abbreviated accounts for Companies House along with a company tax return and tax computations for submission to HMRC. I think my charges are very reasonable given what I had to deal with. I would not give a quote without having all the information and seeing as you were still providing information to me a few hours before deadline day I felt my original price was very fair. I even reduced that for my invoice.
My time was spent as follows:
25/01/10 Bookkeeping 3.50
25/01/10 Visit 2.00
26/01/10 Updating the extended trial balance 1.00
26/01/10 Preparing the accounts and tax 5.00
Total hours: 11.50 @ £30 per hour plus VAT
Peter”
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More hassle than worth?
Sounds to me like he's a nightmare. I would get you money off him and disengage him as quickly as possible
Do you do the accounts for the whole circus - or just the clown ?
You have more patience than me.
Oh just brilliant
The last comment really does it for me -made my day!
On a serious point, yes, we bend over backwards and then some ungrateful pikelet spoils it for (hopefully) a short time, for the rest. Going the extra mile is one thing, having your leg lifted as well, takes the biscuit.
Your Fees are too reasonable
Peter
I think (with all due respect) you are cheap! I would have charged at least double. I am shocked this client is complaining.
.
You are too cheap my man.
If you work at the shitty end of the spectrum you will end up with all the turds that other people have thrown away.
Double your rates and improve your client base!
Actually to be fair to the punter, if you quote "less than £400" if you actually charge £400 they do tend to go mental if you dont clarrify that the job got bigger than the initial quote. In their head "less than £400" means about £250.
I try not to charge hourly rates (you can charge more that way, it frightens the horses if you say you are £100+ an hour I try and get) but use fixed rates that are "flexed" if required. Eg I might say, "my normal rate is £699+VAT, but if its dead simply we will do it for £500". And then let them know its not dead simple half way through and to expect the £699. If they baulk at it, send it all back and bill them for half a job which of course is worthless. Of course if you do it for £450 they are delighted. Ditto if the bookeeping is a mess, you might say well its £699 for my bit and £200 for doing the bit you agreed to do. Obviously you have to give them the chance to bring the bookeeping upto scratch first.
Guy is still a turd however. Dont let them drag you down.
And remember - you cant polish a turd, so sling them back.
.
peter,
and hang on, correct me if I am wrong, you send the accounts BEFORE getting paid?
Own goal sir!
I always find end of Jan I have viritrually no o/s debt as my clients are aware no cash = no submission = £100 fines.
Its not subtle, but boy it works.
The sort of clients who take 10 months to send you their records tend not to be the quickest payers either.
Hope that helps although it probably sounds rather arrogant.
It's meant in help.
Agreed
I realise I am cheap. I have been planning to raise prices after 31 January but only to £40 per hour. It's not too bad because I find with the Digita software I use I can charge fixed fees and get about £100 an hour. I do work from home and because I don't have employees I seem to work all hours - my wife is on call 24 hours a day in her business, also - so my costs are low.
It's strange, the more reasonable you are with people the more they seem to complain. I had a Bulgarian woman come to me because she had set up her company and then used her bank account for personal expenditure. I would tell her the rules; every rule I told her she said she didn't know that; my response was always the same: I know, that's why I'm telling you. I won't tell you things you know. She'd give me a list of her months transactions. I'd split it between personal and company and then run her payroll to ensure there's no problems. I'd keep telling her it would be cheaper if she followed my advice and use her bank accounts properly. I didn't really trust her so I asked for the money up front all the time. I said I'd need £200 to do the remaining months of the tax year and the payroll year end. She said: Fine as long as that includes the company accounts and tax!
I explained the company accounts and tax would be extra. She went beserk, saying that she'd been told doing company accounts consist of ticking 12 boxes. She accused me of deceiving her and asked for all her money back. I stood my ground and despite many threats she seemed to give up.
The vast majority of my clients are great and with a lot of effort on my part I may be able to get them to send their information in within a reasonable time.
One client's accounts were due on 31 January 2009 but he didn't give me his spreadsheets and paperwork until 29 April 2009. He was still upset that he had to pay a penalty for being more than three months late. I spent the rest of the year chasing him telling him that he needed to give me the information early and we should get together and go through how he could present his information better. I promised meeting but just didn't turn up. I got his spreadsheets on 26 January 2010 with the deadline 31 January 2010. Given all the other work I have I don't think I'll have a chance to look at it.
Less or more work?
To the anonymous person who said this:
"Actually to be fair to the punter, if you quote "less than £400" if you actually charge £400 they do tend to go mental if you dont clarrify that the job got bigger than the initial quote. In their head "less than £400" means about £250."
You gave some very good advice. Thanks for that.
I didn't give a quote because I didn't think she'd be very good with her records and she wasn't hasty with giving me them despite the looming deadline. I gave her a usual price of £400 + VAT and the price I did charge was £345 + VAT. If people give me sensible spreadsheets that make sense I stick to £400 but if I need to sort out a mess I charge £30 + VAT per hour extra. I was willing to do it for less if it was true that there were very little transactions as she implied. There were the normal amount of transactions you'd expect from a start up business but without the sales. She also shredded about a third of the bank statements. She still wants it done at a cut price? Because it's less work? It's more work!
Great advice
"Hope that helps although it probably sounds rather arrogant.
It's meant in help."
I didn't think it sounded arrogant. I have to admit it irritated me that some clients expected me to rush to do work for them and then they were more relaxed about paying.
Thank you for the advice.
Thanks
Thanks I am learning from this!
.
Peter (same anon as the turd comments and the one after),
you say you work all hours and dont have an assistant.
if I was in your shoes I would jack up the prices for all existing clients as you suggest and let the ones fall that fall. Then for new enquiries put them up to where you would like them to be (clearly yuo wont win a lot of work, but the cheap is best crowd tend to be PIA)
The work should drop and the fee income rise - and better still more time = better service for the clients.
Also think about getting an assistant. A good one can double your output even when part time - think how much you get done when the phone doesnt ring and no-one knocks on the door.
Clearly from your other posts you have the knowledge, so why not charge the rates?
Some thoughts for the new year.
Work to live, don't live to work.
A simple equasion
10 clients x 2 hours a week = 20 hours worked x £30 = £600
5 clients x 2 hours a week = 10 hours worked x £100 = 1,000.
Think about your fees, take them up to £50, then £75, then £100. You might be surprised how few clients you lose, and you have the time and money to live.
I was recently asked to quote a potential new client. I refused to quote until I'd seen his records, and I thunbed through his cash book, bank records etc. Yes, it gave me a better idea of how many transactions were involved, and the complexity of his books. But much more importantly, I got a sneaky look at how much he had been paying his previous accountant.
Now, just looking at it, I would have probably quoted him about £1,000-£1,200 and he would have torn my hand off. BUT, having discovered he was paying his previous accountant £2,500 a year, I simply up'd my quote to "about £1,800-£2,000." He accepted, and even took great pleasure in telling me that I was cheaper than his previous accountant. I managed to look suitably surprised.
Having now done his accounts I could have quoted him less and still made a tidy profit. The whole job took 4 hours of our bookkeepers time and about 3 of mine including travelling, and the client was delighted with a bill of £1,800.
It's not rocket science, just a case of finding out the most you can charge without losing too many clients.
Certainly worth thinking about
I have been thinking along the lines you suggest for awhile regarding pricing. I suppose double my present prices would meant that the client I was complaining about wouldn't even have come through the door!
Although many clients can be late I blame myself not being assertive enough with them. This year it's been a lot better simply because when anybody asks how their accounts or tax is coming along I just tell them I'm doing it in the order I get the information. They can't really argue with that!
A lot of my clients are good but I do agree about raising my prices. I'm going to get together a price list with variations. Should I let all my clients know in a newsletter or should I keep it one on one? I'm thinking one on one - it gives me the opportunity to charge more. I think I'd be better listing what I do for my clients and what I've charged in the past and compare it with what seems reasonable now.
I'm not convinced by the arguments for an assistant. Doing the work doesn't seem to take long it's all the fiddling around getting it ready to work on that takes the time. The vast majority of people who would work in something like my business seem too slow for my liking. I'd also be worried about having such a large overhead and the pressure of keeping it cost effective. Also, one of my clients said to me: "I'm an employment lawyer, why do you think I don't employ anybody?"
Be selective
Peter I wouldn't just stick up all your prices.
Start a new pricing structure for all new clients.
Increase existing clients according to what you think they will pay without leaving.
Increase clients who are a total pain to whatever you think will make them leave :), or, make it well worth your while putting up with them.
As for employing - really its a personal decision. Yes its nice letting someone else earn money for you, but equally it's a total pain finding suitable staff and it is a worry if there isnt enough extra income to pay them. Lots of people are happy staying sole traders, and if thats what suits you, go for it.
I had intended to file a couple of late returns tonight, but, there's a little matter of a rather tasty football match in Manchester on TV soon - so I guess the returns will have to wait (maybe after supper?).
A little hint - to save lots of arguements - do as I did and marry a sports fan who loves football, rugby, motor sport, etc.
Pricing, football and books
That's great advice about pricing. I think I need to put my clients into categories but I have to base it on certain criteria and one would be willingness to pay high prices, another would be if they are slow at paying (although there's ways to get round that) and a third would be how much trouble they are. What are some others?
I support Hull City but seeing as I live in London every home game takes a full day out and even if it's a match near to me the socialising fills up the day!
I've got a couple of interesting books: Clients4Life by Mark Lloydbottom and David Cottle and Starting and Building Your Own Accounting Business by Jack Fox. They are both well worth reading. What other texts can people recommend?
There is no formula
You live in London? First advice - forget about Hull, get an Arsenal season ticket out of all those extra fees, and go to watch some good football.
Things to take into account? Well you know your clients and what each is worth to you. What they will pay and how much trouble they are is a big part of it, but, there are other considerations.
For instance we have a garage/MOT station on our books. The fees are reasonable, but when you factor in tyres at trade price etc. well need I say more. We have client with a hotel in a really nice seaside resort, they brew their own beer and the food is superb. The year end is in April, and they supply 2 rooms for the week with full board for two staff to do 3 days work. Most of the office fights to get that one, indeed I now put names in a hat and draw out the "lucky winners". :)
I really dont think you can calculate it according to a formula, just feel your way.
Now - Im off to watch the football. Hopefully half the United team will be sent off or crippled so that they are severly weakened for their game at Arsenal on Sunday - lol.
You are nearly completely right
Thanks for the advice. I really appreciate it - except the first bit!
Great Thread
Love it! Are the books any good Peter?
More books
I think they are well worth it. With both of them there's plenty of food for thought and you have to decide what you are comfortable with but there's lots of practical and theoretical advice.
Other books I'd recommend are:
Rain Making - Ford Harding
Marketing & Selling Professional Services - Patrick Forsyth
Marketing Professional Services - Philip Kotler
The Firm of the Future - Paul Dunn and Ron Baker
The Marketing of Professional Accounting Services - James Mahon
Professional's Guide to Value Pricing - Ron Baker
Obviously you have to read them and use ideas you like rather than just put them on the bookshelf!
The practical help given in Any Answers can be much better than reading a book.
One size doesn't fit all.
An interesting thread. But on the subject of fees, there are other considerations. I know I am very good value compared to the price many accountants pay for tax assistance provided by lesser qualified advisers - people regularly tell me I should charge more. But, equally, my clients know I don't work 'normal' 9 to 5 hours - that they may call late afternoon and find me at home with my kids or cooking dinner (but I still give them advice!). Sometimes I go on holiday and may be difficult to contact for a week. If I was charging two and a half times what I charge now - which is what clients paid for my time when I was a (less experienced) employee in London - they might be more demanding and less understanding. As a result, I have a flexible working life that I really enjoy, clients who are a pleasure to deal with and enough money to live a good, if not extravagent, life. My clients get high quality and friendly (because I don't get stressed out!) advice at a good price. And they aren't scared to call with relatively small issues or just to confirm something - which means I get more varied and interesting work and really feel that I am helping people, which makes me happy. A win, win situation for all of us!
Same issues re employing someone - if I've got an assistant to train, mentor and oversee, it would tie me to office hours. And if I had to pay someone who has the experience to do what I do, I would have to charge a lot more!
One size doesn't fit all.
Cathy
raventax@btconnect.com
Advice - on football and on business
Maybe a book on football would help you to come to terms with your affliction. You know what football is dont you? It's that game that Arsenal play, Manchester City and United try to play, and Hull City once saw played but never got the hang of :)).
On a serious note, I'm at that age where I don't read long books anymore as I might not get to finish them. But the bottom line ignoring all the fancy theories seems to me to be clear.
Give your clients a top class service, and that includes helping them expand their businesses, sorting out their mortgages etc. as well as their tax.
Charge them a realistic fee - one that's fair to YOU as well as to them.
Always take the time to explain things to them in simple terms they can understand - never try to "blind them with science" because they just think you're being a smart-ass.
Get to know them, their likes and dislikes, hobbies, kids names etc.
Use their businesses - if I want a plumber, my car serviced, a wall built, want to buy a new fridge, or whatever, I always use clients. And I put clients in touch with each other where they can help each other. For example when the hotel needs some painting - a decorator client goes to do it. The hotel gets a good job done a little bit cheaper, and the decorator gets a weeks work he wouldnt have had otherwise.
It is possible to become friends with clients and still charge them a proper rate for the work you do. Its all about building up the right relationship with them.
Most people view seeing their accountant a bit like seeing the dentist - we try to make it more like dropping in for a cup of tea with a friend.
But above all, get rid of those that give you grief, because they are never worth it and they always end up leaving anyway. Not only does that give you more time to look after the decent clients, it make your life much more pleasant too.
Be happy
Cathy
You are right. While I am willing to compromise on some things if I feel it gives a better service to clients I wont on others. I work from home and while my purpose built office is more high tech than 99% of offices the last time I wore a suit was to my mothers funeral several years ago.
I don't think your clients would worry if you were on holiday for a week. If they really need you that quickly I would suggest that they are beyond help!
While I don't pretend to have the level of technical knowledge of some accountants I think I know what the vast majority of my clients are thinking and are wanting. I come across as confident but non-intimidatory because I am quite friendly.
I realise I don't run my business 100% efficiently but I am happy to put in the hard work, hard thought as well as take note of the advice I receive. It's always better to receive advice from others because they are not looking for excuses to avoid doing it! But all advice should only be taken on board if it doesn't conflict with your desired lifestyle. I think my business can be termed a lifestyle business rather than a business designed to acquire as much money or prestige as quickly as possible. That doesn't mean I'm not willing to work hard at it, though.
If you are happy with how you run the majority of your business that is what is important. You can still make tweaks as required but being happy should be the overall aim.
Yes and no
I admit that Arsenal can play good football, but a football club chooses its fans, fans don’t choose a football club.
I understand the long book aversion and not having to commute reduces the time available. I think it’s worth making the effort sometime.
I do get to know my clients quite well. Unfortunately, one is a conspiracy theory nutter and I’m not the kind of person to nod politely.
I do put clients in contact with each other.
I really like my dentist. We have a good laugh together until she gets down to the nitty gritty.
I was talking to another accountant the other day and he explained how he offered to do the same job as the incumbent accountant for 50% of their fees and wasn’t pleased when he lost the opportunity after the other guy matched his quote. I simply muttered something about “living by the sword”.
I seem to have reached the same conclusions as you on quite a lot of what you do but I’m happy we differ on football. I love my club.
As they say ......."love is blind".
I’m happy we differ on football. I love my club.
Posted by petersaxton on Thu, 28/01/2010 - 00:33
Eh?
I can't believe you live in London and charge £30 an hour. A window cleaner makes a better hourly rate than that.
Arsenal?
Cymraeg Draig: being Welsh, do you do the Ayatollah when you're at Arsenal?
OP: £30 or even £40 per hour is far too cheap.