Hi I am Alan Kennedy - a Chartered Accountant with over 20 years experience so we have the knowledge to help you and your clients. We provide services to clients in mainly oxfordshire but also outsource bookkeeping, accounts preparation and consultancy services to the accountancy profession. Also a partner in a business brokerage - specialising in buying and selling accountancy fees.
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What to charge?
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Sun, 24/01/2010 - 16:28 |
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Hi Della - thanks for the comment. It sounds like you are doing very well for a start up. The only comment I would make it is not necessary to increase your fees because you have offices or staff. The idea of offices and staff is that the process becomes more effecient. Also the price should be based on what the value you provide possibly tempered by "the going market rate".
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What to charge?
Alan,
As I've only been trading for a year this is still one of my dilemmas. I seem to be getting it right more through luck than anything else. By this I mean my clients seem happy with the service that they are getting for their money (I send out a satisfaction survey after each job)
First I have to estimate how much time the job will take based on what the client tells me (open to error here). I then do two calculations: (1) I multiply the total time by my personal hourly rate (I'm a sole trader so, for now, I cover everything from the book-keeping up and my average hourly rate reflects this) (2) I multiply by 3 different hourly rates depending on the level of experience/qualification that each element of the job requires. My fee is based on these two figures but there is some subjectivity regarding the risk on time estimate, how much the client is willing to pay and even how easy I think they will be to work with.
What I am selling is my time but the client is buying is a professional job or just pain relief from the dreaded accounts. Do you ask how much your PC cost to make or what you're getting for your money?
I believe that my fees are about the same as other Chartered Accountants. I don't have office overheads but I am currently spending a lot on CPD and marketing. I also don't want to lose all my hard won clients if I expand into 3rd party premises and have to suddenly increase my prices.
I do not try to compete with the very cheap accountants who must turn around tax returns faster than you can say "continuing professional development" or "professional indemnity insurance". If clients are happy that's a different market.
Even though I charge fixed fees I still record my time against each client so that, in future, I can have a better idea of time spent on each client/type of client. This means that I'm getting more confident at quoting fees.
The main benefit of a fixed fee for me is that all but one of my clients pay the full amount on standing order so that I don't waste time on debt collection.