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Apprentice charge out rates

How do other practices account for training time

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Hello,

Need advise in regards to fees charged if people would not mind.

We are a small 1 partner practice. We always have one trainee, usually straight from school on the apprenticeship scheme. They deal with all our bookkeeping.

They are worked hard in my opinion and a lot is expected. Their time gets charged to the client at the lower rate of £35 an hour straight away. An accountant in the firm is always on hand for queries but there is an expectation that they should quickly be able to work independently. The accountant is charged out at between £65 and £75 an hour and they charge their time to the job when they assist on that job.

I then receive the job. I review and complete the VAT return or Year End etc I am charged at £85 an hour. Review often takes a while when completed by a trainee.

Everything is always over budget and im held accountable. Fees are always being increased. I dont feel training time is being considered.

At what point do others start allocating trainees time to the client?

Many thanks in advance

Replies (22)

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A Putey FACA
By Arthur Putey
10th Jan 2022 15:47

Apparently on government contracts the likes of Deloitte charge their juniors out at £150 an hour.

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Replying to Arthur Putey:
paddle steamer
By DJKL
10th Jan 2022 15:51

But they are mainly graduates so obviously worth every penny.

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By Winnie Wiggleroom
10th Jan 2022 16:31

A one person practice charging by the hour? I thought we all left that behind about 15 years ago
"everything is always over budget" - you do amaze me!
"fees are always being increased" - forgive my bluntness but I do not hold out much hope for your long term future
My advice, forget hourly rates, the big boys can do it on big contracts, it simply does not work these days for those of us in small practices. (IMHO)

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Replying to Winnie Wiggleroom:
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By Roland195
10th Jan 2022 16:33

I was rather hoping that the OP is not the owner of the firm as I would be concerned over their mental health if they operate this arrangement, hold themselves accountable & then decide to increase fees to compensate.

Thanks (4)
Replying to Roland195:
A Putey FACA
By Arthur Putey
10th Jan 2022 16:45

A bit like Enfield Council who appealed against a traffic violation by one of their own vehicles, lost the appeal, took themselves to a tribunal, and won!

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Replying to Arthur Putey:
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By Wanderer
11th Jan 2022 07:07

Didn't HMRC, many years ago, take someone, who was working from home, to a tribunal to get assessed for Business Rates & it turned out to be an HMRC employee who was WFH under the HMRC work life balance initiative?

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Replying to Wanderer:
paddle steamer
By DJKL
11th Jan 2022 15:49

Surely not HMRC, they have nothing to do with business rates.

Up here it is the Assessors and then the Local Authority who have sway over rating properties.

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Replying to Winnie Wiggleroom:
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By Marny
10th Jan 2022 17:28

.

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By Roland195
10th Jan 2022 16:31

What happens to these trainees as they progress?

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Replying to Roland195:
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By Marny
10th Jan 2022 17:29

.

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Replying to Roland195:
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By Marny
10th Jan 2022 22:17

It varies. They all work hard and get great experience. Some leave for better pay before they have really made a useful return. In my opinion its a false economy. But we have had some successes.

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By carnmores
10th Jan 2022 16:33

IMO this is tantamount to fraud AND it's no wonder that on occasion their audits are so poor as some of their employees haven't grasped the need for primary evidence.

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ALISK
By atleastisoundknowledgable...
10th Jan 2022 19:25

We make a mental allowance for jobs going over budget. It’s not scientific at all “Job X is 65% over budget? It was the trainees first job so that’s ok, never mind”.

Thanks (1)
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By I'msorryIhaven'taclue
10th Jan 2022 19:28

Marny wrote:

We always have one trainee, usually straight from school on the apprenticeship scheme. They deal with all our bookkeeping.

They are worked hard in my opinion and a lot is expected. Their time gets charged to the client at the lower rate of £35 an hour straight away.

So your firm's teenaged apprentice costs around £5 an hour, but has a budgeted charge out rate of £35 hr.

Marny wrote:

An accountant in the firm is always on hand for queries but there is an expectation that they should quickly be able to work independently. The accountant is charged out at between £65 and £75 an hour and they charge their time to the job when they assist on that job.

So £65 to £75 per hour of a trainer's time.

I guess that's the downside of employing a wet-behind-the-ears schoolkiddy.

Marny wrote:

I then receive the job. I review and complete the VAT return or Year End etc I am charged at £85 an hour. Review often takes a while when completed by a trainee.

Everything is always over budget and im held accountable. Fees are always being increased. I dont feel training time is being considered.

At what point do others start allocating trainees time to the client?

IMHO you have to charge both the trainer's and the trainee's time to the client (even if you are going to write it down). How else would you measure and evaluate whether your firm's trainee scheme is financially viable?

Have you thought of suggesting in your reviews that the firm's costs might be reduced by employing a grown-up bookkeeper instead, as that would largely eliminate yours and the trainer's expensive involvement. Meanwhile, it's hardly your fault if your principle elects to adopt the more expensive trainee method.

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Replying to I'msorryIhaven'taclue:
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By Marny
10th Jan 2022 22:07

thank you

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By Marny
10th Jan 2022 22:06

Thank you all for your comments its all very helpful. I am due a meeting with the partner and feel empowered to state my case.

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boxfile
By spilly
10th Jan 2022 23:15

I’m assuming you log your hours, so you could put down any time spent going over stuff with the trainee. I’d call it as staff training and not log it to a client but only note which client was being worked on.
Additionally, when doing your reviewing, you probably know roughly the time it would usually take you, so list any extra time as a review of trainee work and not a client work.
That might help the partner focus on how much non-chargeable time you are having to spend dealing with the trainee and any corrections to their work.

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By petestar1969
12th Jan 2022 09:46

Charge out rates?

Alright Noah, how's your Ark doing?

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By rocket_queen
12th Jan 2022 10:09

I have always had the policy that only one person at a time is charging time to the client when it comes to training staff. So for example, if a trainee is doing the work and I am assisting in training them, the trainee charges time to the client and I charge time to training. This is because I would assume that the trainee would improve and learn as they went along so it wouldn't be fair on the early clients they are getting if their fees were higher due to the job including teaching a trainee the basics of their job. The exception I would make would be if there was something particularly complex in the clients affairs which *required* someone at my level rather than my work being required due to the lack of training of the trainee.

Similarly, time reviewing work can be split between time actually reviewing the job to ensure it is complete / correct etc and time going over the mistakes of the trainee and instructing them. Only time relating to the actual job gets billed to the job. Then you should see over time that "training" time and cost goes down. If it doesn't either you have trainees who aren't learning or managers who aren't capable of letting go a bit.

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By bassanclan
12th Jan 2022 12:04

Many moons ago as a 17 yr old work experience student at PWC my admin work was charged out at £72 per hour

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Routemaster image
By tom123
12th Jan 2022 16:24

You cannot get rid of butter by spreading it..

You have to step back and ask what all this charging and recharging is really achieving.

By all means book time to jobs, but the client will pay what the client will pay, - which you should really have agreed at the start.

Having lots of different charge out rates is probably not that useful either.
Then you just get internal politics over who is going to do work, or not..

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By petestar1969
28th Feb 2022 11:30

£35 an hour for bookkeeping! Crikey!.

When I was a trainee in 1990 my annul salary was £6,250 and my "charge-out rate" was £17 an hour. From day 1 I learned to spread my time on various jobs so none of them went "over-budget".

It seems I was way ahead of my time when it came to dispensing with pointless timesheets when "fixed" fees had been agreed with clients.

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