Charge out Rates

Hi everyone, my first post, so forgive me if this isn't in the right place!  I am currently in full time employment, but would like to set up as a bookkeeper and payroller (AAT qualified and Diploma in Payroll Management).  I have set myself a two year plan, so that I can save up some money to fall back on and make sure I get all the right equipment and software etc.  Anyway, the company that cleans our offices has asked if I would do his bookkeeping, as he isn't happy with his current one.  She quoted him £100 for the quarter, then charged £125, which he didn't mind paying, but she didn't tell him it would be more or why.  He also had to badger her to do the books, as she was too busy to do his and then, when the records were submitted, his accountant advised that she had left things out.  I told him that I didn't know how long it would take me, but , to start with, I would charge him £12.50 per hour and, as he had his books sorted monthly, would prefer to do them monthly, then I could keep on top of them and would be able to ask him queries which would be fresher in his memory etc.  He didn't seem too happy about the £12.50 per hour, but said he would speak to his wife.  This was three weeks ago and I haven't heard from him since.  Reading through these forums, charging is probably one of the most difficult parts of setting up.  I was worried that if I said I would do it for £100 it would take me longer, especially as his previous bookkeeper ended up charging him more.  He did catch me on the hop a bit, as I wasn't expected it, so was thinking as we went along.  Your thoughts would be greatly appreciated as I will need this going forward!

Comments

Too low!

WhiteRose | | Permalink

£12.50 per hour is in my opinion way too low!  You don't say which part of the country you are in but bookkeeping rates vary from around the £18 per hour mark upwards.  Find out what other bookkeepers in your area are charging.
One thing a client will hate is a surprise in how much they are being charged.  So quoting a rate per hour also has to come with a guesstimate of how many hours a job will take, and maybe an agreed upper limit to the cost.  Or charge a fixed fee for the job.

If you are thinking of becoming an AAT Member in Practice I would strongly recommend that you go along to one of their free MiP Saturday morning sessions - they are held on a regular basis around the country.

Responses

angusbruce | | Permalink

Thanks very much whiterose for your response.  I have been amazed that you are the only one to reply to me - so a very big thank you for your time, but I am obviously really disappointed in the lack of other peoples responses, I thought these forums were to help people!!

I am based in Somerset.  I did attend the AAT MIP Saturday morning session, which made me realise all the costs that are involved in setting up.  I want to do it right, with new computers and licences etc, so have given myself two years to save up and to give me money to fall back on as I attract more clients through accountants, leaftleting etc and the web.  This approach came completely out of the blue, and I guess I wasn't expecting it, but I think in hindsight I should have agreed to do it for the £100.  I had thought about charging £15 when I do set up.

starting up

neutru | | Permalink

unrelated to rates - have a look at helpaccountants.co.uk - it did help me a lot when starting up

Charge out rates

mshepheard | | Permalink

 Hello

I have only just caught up with a bit of a backlog of Forum e-mails. You need to know how much other local bookkeepers are charging if possible. I have to admit that £12.50 sounds low as in Sussex you are looking at a minimum of £15 but usually more. To work out your charge out rate I would suggest the following:

1.Work out how much you want to earn a year.

2. Divide it by about 1,500 as this would probably be about your number of charge hours.

3. Multiply that figure by 3. The result would be a charge out rate.

 

Update

angusbruce | | Permalink

Thank you for todays responses.  I just wanted to share with you that I have gained the client.  He was indeed shocked with the £12.50 per hour as he was only paying £10 per hour with his previous bookkeeper!!  As with everything, experience will eventually help me judge how much to charge and, like most things, it will take me longer to begin with and in time I shall get quicker.

Well done!

WhiteRose | | Permalink

Charge out rates

mshepheard | | Permalink

 Congratulations. Like many clients he expected for prices to remain static. Clearly he paid peanuts and appears to have got poor service and a poor job done added to which the previous bookkeeper increased the charge anyway.

Just do the best job you can and charge the rate you have stated.

 

 

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