Mentor needed to help start up

before

you can do anything else you will require a practicing certificate and PI insurance.

Do you have the necessary experience for that?

If not you will need a certain amount of time working on the practising side of the profession.

Once you have done that you will easily understand the requirement of small businesses

Resign from CA and no PII reqd

We all know that for more and more clients they just require some basic advice, bookkeeping, accounts prep and a txa return done. It is not rocket science.
I suggest you resign from your CA time wasters and set up your business without the ties of the stuffiness of your so called qualification.
Who is going to sue you if you resign and over what exactly? Not only would you not need it but I dont think you'd get insurance anyway.

And because its London remember to put that London weighting on it of absolutely zilcho. I dare say you'll easily get £40 per hour down there anyway, but that's about it. No need to chg more.

Mentor

Happy to consider mentoring you, if you want to get in touch you can do so via the website www.seahorseuk.co.uk

What's your budget?

We can offer mentoring (including developing sales skills and an entrepnerial attitude) and I'd be interested in finding out what budget you have in your mind to launch your practice?

We can help you develop a practice strategy which includes a corporate identity, packaging and pricing bundles plus support with all offline and online promotional tactics including a Website and sales and marketing training.

Over the last four years we’ve engineered a proved business development program for accountants and if you have £30,000 I’d be interested in having a chat.

The way we work is that if you build your practice on our software we don't look to generate profit from the mentoring and supporting services. However, if you don't want to use our software we can still working with you by working a pricing plan that works for you under our new marketing brand just about to be launched.

Bob

£30,000?

Hilarious.

working experience

I agree the best way to gain experience is to work in a local practice but I cannot find any firm that would give me the opportunity to do so. ( Tried for the last 6 months) I don't mind not getting paid or just to cover my travelling expenses. I would be grateful if anyone would give me such opportunity to gain working experience in their practice. I am someone with high integrity and work ethic.

Weilin

Business or a technician

Lee and Dave – the £30,000 assumes Weilin is going to work full time building her business, has no clients on day one and will draw a good wage before breaking-even with cashflow from revenue.

I’m also assuming she’s going to build a business, not a job. A business requires investment to lay the foundations and the biggest cost in lack of revenue so the quicker fees are generated the better.

Rather than have a £30k annual marketing budget the idea is to win £30k and then invest again quickly so you win another £30k. It’s possible to get this in 6-9 months so you turn £30k cash into £60k share value.

There are other approaches and one option is to sub-contract and earn some money while you build up your practice. But, this slows you down and pushes you into the technician’s role. You can employ someone full-time and keep your job. We’re working with an accountant who during her pregnancy and beyond hasn’t worked much but is still building a business because she employed someone full-time.

Most accountants approach business as an accountant rather than a business person and that’s why the thought of investing £30k is difficult for some to get their heads around.

Firm’s we are working with are committed to a strategy where they make at least £150k net and don’t end up working in the business doing accounts and tax. An investment of £30k seems reasonable good value to me and we only take a little bit of this.

Weilin – my advice is to apply to buy a TaxAssist franchise. I believe they start at £20k.

Bob

We've all read the E-Myth Bob..

..but this isn't a bakery..

7,000 tax returns

Dave – are you implying an accountancy practice can’t be run using the principle of the E-Myth? Is this because you think it's too complicated?

I agree there is a line between systems and training and some accountants can’t leverage the E-Myth because they’ve chosen the wrong service mix and segment to target. Others don’t want to use the E-Myth and get out of the practice because they base their service value on themselves and this makes them feel needed which is good for their ego.

This can be quite a deep subject because some accountants get much of their self worth from their business. At work they get coffee made for them and people listen and do what they say. Outside the office is very often a different story.

Have a look www.taxbuddies.com/about.php ">7,000 tax returns. Do you think Bernard Oster the MD does accounts and tax returns?

Bob

£169+VAT

Is what Bernard Oster's company is charging for year-end accounts and tax. You bet he won't be doing tax returns. Presumably there's no quality control either.

Quality mentoring

Andy - there’s plenty of quality in the Tax Buddies business model, that what interests me and why I used it as an example. After all we're talking about a new business aren't we?

I hear the technicians argument all the time and there’s an argument that too many accountants put their overzealous professionalism ahead of their underdeveloped commercialism.

One of the lessons from Tax Buddies is the pricing and margin expectations – I doubt the Tax Buddies business model is based on charge-out rates with 33% profit expectation.

Mick – we’re talking about a Chartered Accountant so there should be no problem accounts. After all, we’re talking about the micro/small business segment and it isn’t that difficult to pick up the tax knowledge – what’s important is the business strategy, marketing, sales and pricing.

Bob

agree

Absolutely agree with Graeme. Also the comment about being able to quickly get up to speed with tax is ridiculous. Tax is extraordinarily complex and trying to make it understandable for the typical small business owner takes a huge amount of time.

I completely understand using marketing principles to grow my business, the fundamentals still have to be there as well.

Investing £30,000 at the start is not practical for most starting out, and is also not needed. I spent around £5,000 setting up, and my business is continuing to grow rapidly. Spending money on marketing is required but needs to be spent cleverly.

The best thing I did at the start was to speak to several other accountants in practice in the region to get their advice. Which is just what Weilin is trying to do.

services

One service I used which is really useful for those transferring from industry into practice was www.helpaccountants.co.uk

There is a huge amount of information on this site and great support for a very modest subscription fee. This is exactly the kind of information that would be good from our professional organisations.

A different point of view

Graeme - I’m always up for some advice and your post reads genuine so was my reply because there is a request for help and I’ve assumed Weilin is serious and not looking for charity.

There’s a lot to be learned from TaxAssist - they are winning marketing awards and developing a strong model. Perhaps using the Chartered brand would be a good idea, but it’s not a foregone conclusion. Nothing should be at the beginning.

Your assumption of the market seems different from our experience of dealing with hundreds of enquiries, many from this site. It’s clear that most accountants really are technicians - weak on strategy, marketing, management, sales and pricing issues. Over 50% of accountant’s turnover less than £100k and only 4% generate profits in excess of £100k.

I know my target audience – they are ambitious start-ups who, like me, appreciate a bit of attitude. We prefer to work with small young start-ups because we can grow with them and get in before it’s too late. I’ve found that many people we work with read these exchanges with a little smile because they get the point.

The point is to make a point that’s different from everyone else’s. And, I’m not pretending to be the world’s greatest businessman but I am an expert on how not to run an accountancy practice. I also know (after years of trial and error) how to use best practice strategy, pricing, marketing, sales and practice management systems to build a very profitable accountancy practice which is not 100% on the owner.

Nicola – tax isn’t that difficult if you confine the practice to a certain market segment. Our message is to stick to basic compliance work including bookkeeping and tax credit - do it incredibly well with great customer services.

Bob

Some points

Hi

Re Bob - I have seen a few of you comments to provide strategy etc to accountancy practices. Without being too critical I would hope that your strategies are slightly better than;

Step 1) Purchase taxassist franchise
Step 2) Work hard

The OP wants a small practice working from home. Taxassist requires I believe a shop window advertising them and I struggle to see how this can be achieved working from home. In addition, a small practice tends to involve a target of a small income and not really laying out large fees for a franchise.

It is important to realise what your customer wants in any business and perhaps a bit more reading will give you an understanding of what potential customers are trying to achieve.

Re Weiling - I have set up my accountancy practice from scratch in Swansea and in less than a year now have 25k worth of fees. I didn't use telemarketing or big advertising expense but as an accountant working in practice in my area for some time have been able to identify certain areas where I could win clients.

It can be more difficult for you if you have less accountancy practice experience, and if you do lack this then realistically it may be better to do sub contract work with another firm whilst you build up experience. It can be your clients that suffer in the long run otherwise.

If you want to leave an email address I can send you a few tips that I have used and hopefully these can do the same for you.

Opportunity costs

Leon – don’t worry, you’re not being too critical. My post are usually about strategy around client and service profiling, marketing methodology, consultative selling skills and value pricing which brings in project management.

Now it’s my turn - £25k in a year is a 1/3rd of what you can achieve so the opportunity cost to YOU of not achieving this is at least £50k. I assume that next year you’ll be on track to be at £50k whereas you could be at £150k – that’s another £75k you’ve missed. In two years that’s £125k and that puts my total one-off investment £30k into perspective.

Bob

RE: some points

Leon, thank you for the suggestions. My email address is leeweilin@hotmail.com, any tip is greatly appreciated!

How does one go by getting subcontract work from accounting firm? I have had no luck from writing to local accounting firm asking for work/subcontracting opportunity.

I am a firm believer in good customer service and if I am not an expert (or at least have good knowlege) at an area I can't provide a good service to client, like you said it will be the client who suffers in the end and it is not professional conduct. That's why I decided against in buying a franchise as a few weeks of tax courses will not be sufficient. So I thought if I can't get practice experience maybe I can get someone to mentor me and asks questions as and when I needed to.

Weilin

Back to reality Bob

Bob

Your figures are wildly optimistic and based on an average of say £500 PA for a client then by using your support then I would win 300 clients in the first two years.

I don't think this is achievable in my area and the fact that you try and state that it has cost me £50k by not using you in the first year to be pretty stupid.

Perhaps you have used some pretty unrealistic expectations in your business as well Bob. Having looked at the accounts for More Training Ltd at 31st December 2006 I notice that your Profit & Loss Account showed a deficit of £263,753 after trading for three years.

Perhaps I am not the only one who needs to look at my client profiling and marketing strategies eh?

"deficit of £263,753 after trading for three years"

I know one shouldn't laugh at someone else's misfortune but..

..it couldn't have happened to a nicer guy!

Lost opportunities

Leon – my business development figures are 75% of our best firm and are what we expect from any new/young firm who joins us - especially in today’s environment where it’s much easier to win work.

The latest firm, which is being prepared to go to market, is expecting to out-perform our best firm to date. They are not in London or a big city.

By the way, I didn’t say an average of £500 a client, maybe that’s where you not maximizing your opportunity. Our figures of average fees are closer to £1,000 to £1,500.

You haven’t cost yourself £50k by not working with us but by not maximizing the your opportunity. When we explore opportunity costs with firms we often find that they don’t have a marketing plan.

In nearly all cases firms accept they can improve their packaging and pricing because they are stuck with a time based billing mentality. There is often insufficient time and financial investment in marketing, poor sales skills and almost always they have a badly designed Website that isn’t optimised.

You are right on one thing though; my expectations were unrealistic on my own business. I expected accountants to be much more entrepreneurial and capable and that’s why we now refuse to work with some people.

As regards financial commitment perhaps I don’t see a major issue with a £30k to launch a practice because all you’re doing is switching cash to a business asset. To fund MORE I sold my accountancy practice and house to fund the deficit which is either an investment or a loss – it depends on how you look at it.

I believe we’ve built business value to cover this and IPR to leverage in the coming years. It’s a bit like studying for four years to get a qualification which then enables you to earn a living for the rest of your life.

The MORE business will give me what I am after (freedom) and it will also help our firms achieve the same - the question is will yours or will you end up like many accountants with a nightmare!

Go into the future for a moment and quadruple your business - what does it look like and what effect does it have on your life?

Bob

Reversed sales and marketing

Swiss Toni – interesting because the Revenue effectively acts as the sales and marketing by creating the demand for your service.

The question is - without the legal requirement how many of your clients would continue to pay you?

Jeez

Bob

Last night you informed me that if my target income for next year was 50k, then with you it should be 150k i.e. you would treble my turnover. Now this morning you could quadruple it. I think I should hold off while the figure keeps growing perhaps.....

Looking at the massive loss you have made to that point Bob then your business model at the moment is failing. This isn't a first year loss and in the fourth year it didn't get better but at the least your company is solvent now with the issue of around 40,000 shares at eight times their nominal value ahem.

That is four years of big losses whereas surely if you had taken your own advice with your accountancy practice then you would have had your annual profit at that time plus another £300k in turnover. Imagine what it would be like to have a successful business like that Bob..

Again, at the moment your business model is failing by in your words unrealistic expectations and you have sold your house and business to chase this pot of gold at the end of the rainbow. Don't try and take us down with you.

oh dear

quote
I expected accountants to be much more entrepreneurial and capable
unquote

Why did you have that expectation, Bob? What was the basis for the view? It genuinely surprises me. It's hardly rocket science that the great majority of small practices and accountancy start-ups are indeed self-employment plus.

First fundamental for any business is to know its market and potential market. You took the view there were sufficient entrepreneurial and capable accountants who wanted to business build who would have the propensity to seek support from you. Well, I have not researched the matter with a view to tapping such a market, but (honestly, and not a pop) my unreasearched view would have been negative. What market research did you do that showed positive?
(That there is a clear objective requirement is one thing ; but not germaine to the point unless you believe you can move the market. That of course is all about timing. I personally would have bet on the demise of outmoded things such as Sage or firms providing accounts compliance services ten years ago ; I'd have lost my bet. It remains a cast iron one way bet ; but timing is all).

More specifically ; you take the view that your postings will generate customers from accounting web. The fact that might entail p*****g off 100 aweb readers (as side casualties) to get one aweb reader as a customer is of course not a problem to you at all.
But "doing battle" IS probably a problem to you, since - however hard you try - it will almost inevitably come over as negative, and not the positive support any potential customers would be seeking.

Loss, investment or profit

Dave – the deficit should go down by £120k from last year’s trading results, which gives me the belief that it’s an investment rather than a loss.

Anyway, talking of losses, after allowing for say £75k as a notional salary for a partner/sole trader most accountants report they are actually making a loss. Especially when you take into account the extra hours and hassle involved running a practice.

At best that seems a mediocre existence or a slow painful death - neither passes my rocking horse test. We'll go for it with a few like minded firms and let you watch and criticise.

Bob

Just a reminder folks

You should NEVER use AccountingWEB.co.uk to advertise yourself or your services.

You are not permitted to put links to your own site in your comments.

If anyone spots any offences of this nature, please contact us so we can remove offending links.

If someone has asked a specific question and you can help, please come forward in a genuine 'non-sales' way and help.

Thanks for your cooperation.

A Lesson to be learned

Sorry Bob, but your constant self promotion has alienated many Aweb users to such an extent that it will be difficult to reverse, irrespective of what you have to offer which might be very good.

Constant Self promotion = Negative Publicity

Re Dennis

The point is that Bob hasn't got a long story of success and that his company accounts show that his own business model is seriously flawed, so how can he assume that he will be able to make everybody's business an overnight success?

I don't really consider someone who has lost £263k in four years to be someone who has a proven track record of success but perhaps we differ on how success is measured.

As Rebecca said you are not to promote yourself in this section or link your website in the answers. Both Bob and now yourself have fallen foul of this and the annoyance is that every question like this on here ends up with some know it all trying to sell their product without the care of what the poster was trying to achieve.

Whilst I assume you have no knowledge of my business model, or Bob's (a cynical person may think you know Bob really and are trying to help him as you deal with accountancy software developers) you feel that my model is outdated and that Bob's is the way forward.

You must be able to see me (and my model) in your crystal ball. If so how many fingers am I holding up?

great business model!

Leon

Cracking posts by the way. But, as Bob points out TWD are an example of the business model he advocates.

They do 7,000 tax returns per year (wow). In addition to looking at Bob's company finances, you should really look to the financial success of TWD as clearly this business model works. Download their accounts from Companies House (No, really, do) ;o)

Bandwagon...jump on

PB - I’m happy to alienate certain market segments and you know who you are> But, you'll probably never know who you're not.

I’ll take my chances on not getting the calls from the people who shouldn’t call us.

Rebecca – no MORE links starting now?

Leon (part 1) – it’s true; one of the first firms we worked with has done much better financially than us! They are growing at £100k a year from scratch with little overheads and have 90% of their clients on MORE.

My way of reconciling this is that if I focus on making sure our clients are successful then I will be, it’s just a matter of time. Is that your business model or do you charge by the hour?

Leon (part 2) – Dennis does understand our model because he’s taken the time to understand what we're about.

I’m always up for learning how best to run a practice and if you’ve got one running making you £150k plus without working IN the business then you have a choice - post about it or continue to snipe.

Duane – I think Seahorse is run by Jason Dormer who came half a dozen times to our marketing workshop. Each time he brought a member of staff and I think he did this because he found it useful. I believe he’s using your software with the MORE model so that’s a nice way to get some end-users for you.

One word of warning - be careful not to back link Rebecca's on the case!

Martin – I can’t argue with you, even though I did extensive research like having a stand at the National Accountancy Exhibition. my mistake was spenDING time with entrepreneurial accountants when I was in practice.

To be honest I still find it difficult to believe that so few accountants are ambitious and business minded. But, I figure from real-life experience that there are enough for us. If not, I’ll top up our revenue with our own practice like SJD!

Bob

Bob, it doesn't add up

I am not sniping. I have read Michael Gerber and know where you are coming from.
You have a plausible answer for everything, but along the way you leave us with contradictions. For example, you cite Bernard Oster's company as the model 'business model'.
As I mentioned in an earlier post, they charge £169+VAT to prepare a sole-trader's accounts and Tax Return. And yet to parry Leon's criticism you say that the average fee to a client is £1000-£1500. Even you can't have it both ways.

A question of £30k

Duane – just to be clear, we’re not charging £30k (yet) but we are close to offering a package with a guarantee of £50k of new business in the first year. Our fee for this is likely to be £20k to £30k.

My quote of £30k is an estimate of what someone realistically needs to expect to invest to launch a practice while they maintain a good level of drawings.

By the way, it’s nice to know that Jason is so positive. He’s a good guy and I wondered if he’d end uo using KashFlow for clients and MORE for bookkeeping now we have the bookkeeper bureau edition (I think I’m allowed to link to you because I’m not promoting myself).

Andy Partridge – good question (at last) and the answer is packaging and service delivery. The £169 is for a sole-trader remote service and £1,500 could be a local all-in (including bookkeeping and record pick-up) for a small limited company.

There are other services extensions that can be bundled to get a higher price like quarterly tax forecasting.

Bob

Good shout Barnesy

Bob

Had a quick look at TWD accountants and it seems they are also showing a 10k deficit in their P & L Account on their last set of accounts.

Before a merge with another practice in the year it had been a £50k deficit in the prior year and has only been reduced due to a goodwill figure (I assume from the practice merge rather than Bob!). The fact that this is one of your "successes" gives us all the information we require.

The point I have made is that neither of us has a model which can generate £150k in the next two years for every practice. Your recent post now promises for £20k - £30k to get me £50k worth of business. What happened to £75k per year?

I charge a fixed fee for my clients based on an expectation of how much time I feel the job will take each year. My focus is keeping my current clients happy so that these fees are relatively secure and building on this with advertising for new clients and picking up the referrals from current satisfied clients.

Re Dennis - I accept ROI and I'm sure Sage weren't very good when they started but Bob is actually selling a product for £30k when realistically his company could go belly up tomorrow,

In addition, his method of marketing is coming on here and hijacking posts on a Bank Holiday selling products that the poster clearly would not be interested in.

If you enter Accountancy Software in Google then you won't find More in the first five pages. On his website you will find no detail of costs or trial versions to whet the appetite of the buyer, (although you can imagine your practice as an aeroplane!)

Is he a software developer or a business consultant because based on today's postings it is hard to tell and maybe he has to be both as one business is not providing what he expected.

Perhaps Bob has a great marketing product but can't really find a way to market it!

More user

Thought I might jump in on this debate about MORE:
1 Bookkeeping rates average £65-£75
2 Been able to increase overall fee's by 100% in a year
3 It takes me on average hal hour to do a sole trader account and tax return and ltd company about an hour and half
4 Clients love the book keeping service I offer.
5 Helped me sort out 3 tax investigations because the records all sorted on MORE and deal with the enquiry efficiantly

On a more general note this debate shows that its very easy to KNOCK what you do not understand or maybe goes against the norm.I would argue that the profession as whole is going through a paradigm shift and people in the profession need to learn to adapt to new business models or get left behind!

Yes been with with Bob and More for slightly over 2 years and very happy!

'Paradigm shift in the accountancy market' .....

but have you told the poor old client out there? I think the big division here is that 90% of us deal with Joe and Jolene Bloggs everyday and the other 10% spend a lot of time thinking about how to sell something to the other 90%.

The 10% need to appreciate that most clients value one thing above everything else; a personal service. If you can offer this and get the right client then accountancy becomes very price insensitive. It is, however, quite difficult to leverage the 'job' in to a 'business' for the same reason. An example:

About a year ago I posted on here that a number of my clients had been targeted by an accountancy provider who had clearly swallowed the e-myth book et al. They were brash, aggresive in marketing and big on promises. I lost one client to them. A few months ago the client came back to me and because we are english we kind of ignored the period in between! I did, however, have chance to look at their invoices while doing the accounts. My fee (small limited co.) of about £600.00 per annum had turned in to a £350 per month DD for the 'exceptional business growth programme'. Sadly, the growth for my client was not exceptional and the 'value added' was not valuable'.

My client ... and me ... and possibly many of the 90% on AWEB rather suspect that this scenario is typical of the get rich quick re-branding models for the entrepreneurial practice peddled here. Market hard, ratchet fees however you can and ultimately accept a turnover of clients (not that the latter matters as you are 'managing the business' so hopefully you never get to meet the client anyway). Its not for me however.

.

As being proved on here, Bob is big and ugly enough to stand up for himself but I’ll chuck my opinion in, for what it’s worth.

I first met Bob through his posts on here and I have to say that if there is anyone in the UK who understands better than him in how to not run an accountancy practice then I would love to meet them.

It is through his experience, commitment, research and passion to change things for the better that gives him the authority to advise accountants and bookkeepers on how to build a ‘perfect’ practice. That passion seems to rub some up the wrong way on here but shouldn’t be taken the wrong way, or his sound advice dismissed because of the way it is communicated. That is all too easy to do rather than ask some awkward questions of ourselves and our businesses.

I would defy any accountant or bookkeeper to attend one of his seminars and then criticise.

One of the comments below stating that the e-myth principles can’t be applied to an accountancy practice is, with respect, dismissive and short sighted. Granted, it’s more of a challenge but overcoming challenge is what the most successful firms do.

seminars

Bob - I like to be open minded, and certainly accept that I have a lot to learn about running an accountancy practice, so if you have are presenting at any seminars in the next couple of months let us know, I for one would certainly be interested at attending.

We're getting there, slowly

Leon – Offering £50k of GRF for £20k-£30k is part of the £75k and helps firms get off to a flying start with some quick wins.

Anyway, let’s look at your proposition - you’re offering your clients a fixed fee based on an expectation of how much time you feel the job will take. This pricing mindset can only lead to you being unconsciously unethical, uncompetitive, unprofitable or a all three because basing fees on time (even with a fixed fee facade) rewards inefficiency.

I appreciate some struggle to understand what MORE does – is it software or consulting? It’s both (and some) and I don’t think it helps that we’re called MORE Software – maybe it’s time to re-brand to the MORE Franchise and it's why you won't find us under accounting software on google. I'll leave that to Duane who seems to be doing a great job.

Mick – Graeme and I discovered the secret to profitable bookkeeping a while ago. We expect recovery rates for accounts and tax returns of at least £125 an hour minimum. This is based on not letting your clients do poor bookkeeping. Do you ensure all your clients do bank and cash reconciliations and correctly post sales and purchases? Or, do prefer to pick up the fee for spending time sorting rubbish out?

Steven – I agree 100% with you that clients want “relevant value” rather than “added value” and with 90% of business this is a customer service led, price sensitive, compliance services enhanced with tax planning and services extensions like bookkeeping, financial software and tax forecasting.

Nicola – open minded is good. You can get a £1,000 grant from Train to Gain and come down to sunny Cornwall for a day with some other firms in May.

Bob

Its easy to knock what you do not understand

Mick its very easy to mock what you dont understand.

I am not here to help you MAKE extra profits though I will happilly share with you the secrets for say 20% of your increased profits or you could pay Bob his 30k which I can tell you is very good value.

126 clients in two years from scratch not bad going I say of the back of More.

And yes you can do a set of accounts and a tax return in half an hour have you heard of Digita and CSV files (just a clue)!

Back to the original poster I would strongly advise you to go one of Bob seminars will give you all the pointers to setting up in business which is the main point of this post!

Oh forgot more is ideal for small clients they love it!

Specifics

Mick – great new client numbers. Why do you think you’ve done so well?

Do you engage all your clients so they do bank reconciliations and are in day-to-day control?

Are you advising clients on Tax Credits?

Do you provide tax forecasting?

Are you reviewing the DLA every quarter?

Do you roll in “unstructured consulting” (Mick’s wisdom) into the service mix?

Are you going to be able to continue to add £100k GRF a year for the next 6-7 year?

Are you getting the recovery rates Graeme and I quoted?

What would happen to your business if you were not there for 6 months?

Bob

Snap

It’s true that the poor standard of the customer care of many established firms is a major advantage for start-up and sole-traders. It’s also true that more developed firms don’t perceive small clients as valuable which leaves the door wide open.

To answer your question about fees – the advice is bundled compliance and tax advice into a value based fixed price agreement so the client can’t break it down. The result (assuming you have effective project management) is very high recovery rates.

The MORE model does include a review of the trial balance at the year-end using pivot tables. But, there is an assumption of high quality data because of the way the software is set-up and delivered at the beginning. Measure twice, cut once.

Think about it, if your clients gave you perfect books how long do you need to do accounts?

You’re doing a lot of what we recommend - have a read of Purple Cow. The four fundamental Ps of marketing are – Product, Price, Place and Promotion. The Purple Cow is about spending money (service time) in the “product” rather than wasting lots of money “promoting” a sub-standard product.

It’s your call what you do with your business. From what you’ve said I believe you could create a business that made you a profit without working but it’s much easy to create a well paid job. The question is will you be satisfied with that or will you be disappointed like I was with the football.

Bob

Re Bob

Just looked through this thread and think I will make this my last post as it is getting very boring.

To reply to Bob I think the reason you end up with such criticism is the judgements you make on the way other people run their practices. As I offer a fixed fee basis you consider that I will become unethical, uncompetitive and unprofitable. Let's consider this in your methods;

Unprofitable - One of our companies has a £263k deficit in their accounts (or an investment or profit as you try and term it). Laughably you say that the deficit should be reduced by £120k this year but your year end was four months ago and as your book-keeping, forecasting is so brilliant surely your statement should read will be reduced by £120k. You should have balanced your DLA for the first three months of this year already!

Unethical - Another interesting comment as accountants following your methods can complete a limited company set of accounts in 90 mins. Perhaps your software comes with a little robot that gets up in the night and completes the rest of the work! Interestingly, you then say in a later post to offer a fixed fee to the client so that they cannot break down fees. Now supporting the fixed fee arrangement (am I now educating you?) and sounding very unethical yourself.

Uncompetitive - Again another great one. Perhaps I should adjust my rates for book-keeping to £65 - £75 per hour and find myself very quickly working in Tesco.

I appreciate I may not be that knowledgeable of software companies (although I am very cynical of how so many of your fellow developers found you under attack in a thread about a mentor) but I cannot understand how anyone would put 30k in the hands of a company under such um investment.

For every success story like Sage, there must be at least fifty failures and I just think you would be better advised marketing your fee as a percentage of the additional profits your software could generate putting less risk on your customer and more emphasis on you actually delivering.

In addition if you spoke to people using terms like I could make you more efficient and more profitable you may find a more welcoming response than the tactic you are using of telling every accountant on here that their methods are outdated and costing them money. You would indirectly be telling them they could do things better without criticising them and getting their backs up.

Ultimately, charging such hidden and large fees is not what the industry needs and in fact gives accountants a bad name. The client will eventually work out that they are paying unnecessarily through the nose and a large turnover of clients is then probable.

ACcountants are 2/3rds communists

Leon - if you're getting bored let's spice it up a little.

Fixed fees isn’t the problem it’s your mindset because you’re basing fees on time. Don’t think about visiting www.verasage.com and studying Ron Baker’s work because you’ll start to understand why this mentality leads to making firms uncompetitive and less profitable.

Using ethical value based pricing (which includes project management systems like MORE) to generate high recovery rates isn’t unethical because we live in a capitalist society. However, having a pricing mindset where the fee is based on time comes from the labour theory of value. This is where a profit cannot be made from someone else’s labour and it’s why I say that accountants that use time for billing are 2/3rds communists!

Let me explain - accountants who their fixed fee based on expected time use a charge out rate. The charge out rate is usually calculated at a third for wages, a third for overheads and a third for desired net profit. This makes these accountants 2/3rd communist and 1/3rd capitalist.

Couple of other things:

The £30k isn’t what we charge – it’s the realistic cost of setting up a business based on winning £75k worth of work in the first year.

The software just delivers the data so accounts can be completed in double quick time or sent to India for accounts for £50.

I didn’t recommend quoting £65 - £75 per hour for bookkeeping, that’s the recovery rate we expect pricing it and delivering it the way we do.

We’re not trying to be another Sage and maybe you’re right I’d get more enquiries if I changed my tone but quantity isn’t my objective – quality is.

Bob

Quality - Are you sure?

Bob

Can you please clarify one point for me please? You say your objective is quality but in the same post you say:

'The software just delivers the data so accounts can be completed in double quick time or sent to India for accounts for £50.'

How does this deliver quality? Surely a client wants their accountants prepared by someone who knows the business and will spend the time saving the client as much tax as possible and make recommendations to the client based on that knowledge. It sounds as though you are in favour of banging out accounts on a production line in the least time possible. Is this really the best way for the client and the long term relationship with their accountant?

How would you think clients would feel paying £1,500 for your services then finding out you have outsourced that work to India for £50? Not to mention the potential exploitation issue of the Indian workers.

I understand your points about having software that delivers the data in a format that eases the production of the accounts but still think you have an ethical obligation to your clients to prepare the accounts yourself if they have been entrusted to you or your firm.

This Man's A Genius

An expert on opportunity, reversed sales and marketing, communism, investment, bandwagons, not to mention inventing a new verb (mentoring).

Graeme

I've solved it.

Amended accounts were submitted because the software wasn't good enough to get them right the first time, even though they were signed off by our friend.

The software wasn't good enough to either spot that the capital and reserves didn't add up or allowed an element of said capital and reserves to be missed out.

The software also wasn't good enough to cross-reference note 4 to anything on the balance sheet.

The software wasn't good enough to show an additions figure to the intangibles in note 2 although identifying a movement between opening and closing figures.

That, Graeme, is how you can do accounts in an hour or two.

Loose ends

Zoe – our position is that the understanding of the client comes at the beginning of the relationship during the induction process, and the detail is discovered during the software implementation, not at the year-end.

Clients don’t care about how much money you make and the idea about being hyper-efficient is so there’s time to deliver great service. Even just calling the client every quarter and having a chat. This makes the client feel good and it’s what accountants should focus more of their time doing. Good feeling are what clients buy, not accounts.

John – if you don’t understand why time based billing can cause reduced profitability and uncompetitive read Ron Baker’s books. My take is that time based billing is lazy, unethical and stupid if you are good at what you do and justification for charging more than you need to if you’re not.

Graeme – perfect accounts doesn’t mean a good service.

Tom – what’s the commercial and practical implications of your comments?

Bob

Message for swiss

Hi, yes hello Swiss Toni

I have been reading with great interest your posts for a while now but have as of yet been unable to help - until now

Beetroot is a wonderful thing, in fact my best friend and best man at my wedding has a nickname of Beettie as a result of the beautiful claret colour he turns when faced with being complimented in public!

Many years ago we were having a few drinks and he fell over and knocked himself out and eneded up laying on the floor of my living room unconscious. So I had to get beetroot out of my carpet.

The solution - four of us picked him up by a limb each and threw him in the garden to sleep it off.

Hope this helps with your dilemma.

PS - Do you have any Ford Capris for sale - preferably in champagne gold with a brown vinyl roof - let me know

Speak soon

DFM

Never really accountability ........

Graeme

Being sued for incorrect advice or even approving the audit to/for companies invariably doesn't occur

If this was the case why are KPMG being let off the hook with RBS - clearly a 'special case' as they were notified by a whistblower of problems sometime ago and at the time produced some confidential document why there was no problem - exhonorating themselves; what a surprise

So KPMG were notified of problems, took no action, signed the audit and now are not answerable for their actions; very strange

The disappointing thing is that it has all gone very quiet - even this site does not seem to pursue the matter - makes one think there is more to this than meets the eye .......

What is a good service?

Graeme – for accountants MORE is a data collection system, nothing more. For clients it enables them to do their bookkeeping. It does not produce accounts because accountants do that using their back-office software.

The quality of the accounts is a combination of quality data and a quality accountant using quality processes and systems. It's not how long you spend doing them.

We're talking about clients that have average profit of £50k - could it be your professionalism and getting in the way of your commercialism? Business is about risk and return - I'm prepared to take some.

A good service is defined by the client but in my experience with small business clients it will include:

1) Ensuring the clients day-to-day financial administration and control are excellent. This will include providing financial systems support, training, bookkeeping coaching and advice on basics like filing and credit control.

This doesn’t mean letting clients struggle with accounting software or letting them default to a spreadsheet.

2) Providing clients with the best tax advice which will include advising on things like Tax Credits.

3) Tax forecasting so that clients can budget effectively along with regular reviews of director’s loan accounts.

4) Making sure clients understand their tax affairs – perhaps providing a one page report on why the “tax profit” is different to their accounts. With a sole-trader it could be an explanation of what the balancing tax payment.

Our software is called MORE for a good reason – it help accountants and clients get more out of the relationship and I’m happy to justify that to myself and anybody else.
But, it is true that I was onced admonished and fined £500 for a client complianing to my professional bodey.

But, I stood up for myself and it was rescinded because I’m always right!

Bob

"Good feeling is what clients buy, not accounts"

Now I know that, I'm off to **** one of my clients this morning, do her accounts in my lunch hour and pick up a cheque for £300 later.

I actually admire you for putting everything on the line financially for your dream - I would never have had the guts to do that when I was your age.

I can't comment on your marketing ability because I have none.

However, to answer your question, the implications of my comments are as follows.

A major part of your business is apparently the production and sale of software including presumably for the preparation of limited company accounts. I was observing that your own accounts fell down in at least 3 respects as far as disclosure under the Companies Act 1985 is concerned.

There may well be other areas, for example there is no indication of an accounting policy for depreciation. I can only deduce that these shortcomings are replicated in the accounts of the clients of your accountant customers. I'm sure you'll have a plausible answer. As an aside, there are better brains than mine on this forum on the subject of disclosure.

You may well find enough people to pay £20,000 or £30,000 to extinguish your trading losses. However they need to be aware of the myriad of other companies of which you have been a director and which have been dissolved, usually after a 3 year period.

******** Accountants

Tom – when you’re ******** make sure you don’t charge by the hour and get paid before you deliver.

I appreciate your comments about me putting everything on the line and let me ask again - what specifically are the implications of the issues noted in the accounts?

The £20,000 - £30,000 is not what we charge for MORE, it’s what I think a firm must budget for to build £75,000 of GRF in the first year. Is that a good investment?

We make (not earn) our money in the long-term where we have firms using MORE with 150 plus clients. We charge £30 per client per year so when we have 200 firms (accountants and bookkeepers) at that level (say 3-5 years) we’ll have £900,000 revenue with the same costs as now so we should clear £600k shared between the shareholders. I’m one of the shareholders and I won’t be working in the business – is that a good investment for the deficit?

What won’t be dissolved is my commitment because of accountants who are too small minded to look with an open mind at better ways of working and this isn’t really about MORE but about time based billing.

Bob

Robert

I'm lucky to deliver anything these days.

I must confess that the implications are probably zero due to (a) Companies House accepting deficient accounts as a matter of course using the lame-duck excuse that they only file the things and (b) HMRC not having the staff or inclination to challenge the same deficient accounts.

However there is no guarantee that the status quo won't change at some future date. If our profession wanted to do something useful for a change they could do a lot worse than put pressure on the Government to clean up the industry in this respect and benefit their fee paying members in the process.

I fear that your implication based approach may lead to yet another "dissolved" against your name.

******* allowed? Oh So Powerful editors

Tell me how the word ******** is ok but when i mention of the ****** in here or anything of 10% inflamation, I'm taken write off?
How the **** can this be when *****s r talking of *******.

Point taken ronald

Fair comment, and I'm on the case. Pre Budget preparation meant we're a bit slow off the mark.

Thanks for raising it.