Examples of Transparent Fees structure

Examples of Transparent Fees structure

Didn't find your answer?

My earlier thread on this subject has gone off course hence the reason for a new thread. Please, please, please stick to the subject here.

After a fair bit of Googling I found two websites that have transparent fee structure. I hope the owners of these businesses won't mind.

I would be grateful for any comments/opinions on above. http://www.conciseaccountancy.com/fixed-fees-accounts-packages.html is very much my way of thinking - make it very clear from the start to avoid problems and time wasters.

Replies (286)

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By petersaxton
05th Jan 2011 16:46

Close supervision

"I particularly liked your idea on the late paperwork issue today."

I liked that too. I think Bob has a future but only if he's let out under close supervision.

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By petersaxton
05th Jan 2011 16:51

Bob making it up again

“there is your approach for accountants which is to questions improving client’s books for the fear of cutting your own throat and mine which is about accountants making a commitment to more profit by delivering more value.”

CD doesn’t advocate what you attribute to him.

Bob, what happened to the "commitment to more profit by delivering more value" when your company went bust? Was it just talk that you couldn’t put into practice?

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By Bob Harper
05th Jan 2011 16:56

Change

@Peter - the analogy of the garage owner is one where they allow your wife to rack-up mechanical bills because she keeps the handbrake on when driving but they don’t tell you.

How do you know no accountant can help the client as much as you?

Is my software any good? Depends what you want and who you want to use it for. I doubt you would like it because it is does not do accounts. It is designed for clients who cannot use accounting software. It is not online and it forces clients to do bank recs and put things in certain places, in essence in controls the client.

Change is an interesting subject. So, how would you know if you were doing something wrong?

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By petersaxton
05th Jan 2011 16:57

Strategy or tactics?

"You have two specific strategies today, the late paperwork email and getting clients to sign a declaration if they keep poor records!"

I'm not sure some of these "strategies" (why not tactics?) would go down well with some clients. We can all make decisions and advise clients without expecting them to sign declarations. We can all make good money without making out were are out to fleece people.

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By petersaxton
05th Jan 2011 17:08

Backtracking

“@Peter - the analogy of the garage owner is one where they allow your wife to rack-up mechanical bills because she keeps the handbrake on when driving but they don’t tell you.”

Accountants offer advice to clients. You have advocated doing more along the lines of my analogy. Why are you now backtracking?

“How do you know no accountant can help the client as much as you?”

I know accountants.

“Is my software any good? Depends what you want and who you want to use it for. I doubt you would like it because it is does not do accounts. It is designed for clients who cannot use accounting software. It is not online and it forces clients to do bank recs and put things in certain places, in essence in controls the client.”

I don’t think much of your judgement so I wouldn’t recommend you to try to guess what I think. I recommend spreadsheets to a lot of clients which doesn’t  do accounts. I like to get them from clients if they are the most suitable method for them to use. Your software sounds good. Other people have criticised your software and said you were very defensive about it.

Can I have a look at your software?

“Change is an interesting subject. So, how would you know if you were doing something wrong?”

By using judgement.

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By David2e
05th Jan 2011 17:41

Sometimes has a place

I've tried to keep an open mind on Bob's points and not made assumptions based on anything outside the discussion here.

I absolutely agree that there is a place for software to enable clients to manage their own bookkeeping with little to no knowledge of accountancy concepts, double-entry etc... since our Online Cash Book System also takes a similar approach in that it controls how a client can post transaction, perform bank reconciliations etc, though we will have trial's available from next week (or now by request).

Even knowing how such a tool can be put to good use, I don't think it is something that should be applied to any and all situations for clients.  It seems from the discussion here that the value Bob suggests identifying in the client meeting is more for the purpose of marketing a single set approach and getting the client to accept this as the solution for them.

Some clients will do the bookkeeping themselves, have the time to do it, and want to do it.  Some don't want to and feel their time can be better spent.  Some want the accountant to provide a bookkeeper that will go and do it from their premises so paperwork never leaves the premises.

As Peter points out, the reality of it is different clients want different things from an accountant and there are many that simply won't be interested in 'emotional value' beyond having the statutory requirements off their plate. *I don't think "kid's in private school", or "wealth for retirement" are emotional value items.

Whatever the client situation and personal preferences, I'd think the majority of accountants will meet to identify a solution that meet the needs of the client. I expect few would/should go in with the solution in mind first and work the client into believing that the set solution is for them.

If the client does their own books, if it's a mess it is the responsibility of the client and may mean other services they require come at an increased price. Some clients might be able to manage their own basic bookkeeping without any problems - effectively and efficiently. If they opt for a bookkeeping solution from the accountant then I would expect the accountant will look after the client and have a decent set of books maintained. 

Focusing on the quality of bookkeeping and assuming it will be poor really limits the discussion and controls the points that can be made.  It just doesn't seem good to argue on such topics when set on only one way things can or should be done.

@Paul - "I won't have to pay my employee (or me) £500 more to service them."

Not sure if I am misunderstanding this, but with trying to keep up with this discussion I understand you as saying that a new client doesn't increase staffing costs since the staff are already there being paid?

If that's the case I'm not sure that would be the ideal way of looking at it.  That new client could mean requiring an additional employee, overtime pay, or a contractor to provide the service.  Or not having the client on board means the time of the staff member at no additional cost could be converting to a part-time employee.

It really only makes sense to me if staffing is set in stone and additional or lower levels of client work will have no affect on it.

David Toohey
The Accountants Circle

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By Bob Harper
05th Jan 2011 17:54

No opportunity

@Peter - glad you liked the paperwork idea.

The software company being liquidated had no impact on the value accountants get from the software through increased profits.

The software was built and developed from criticism but if you do not like my judgment you are less likely to like it because I quite a say in the design. Anyway, like I said we do not do demos without an assessment of the opportunity/value and reviewing the firm’s sales and marketing capabilities. And, we would not do this now because we are not accepting new firms at the moment. All I can do is put you on the list.

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Teignmouth
By Paul Scholes
05th Jan 2011 17:54

Peter/Paul & lifestyle

Peter - there used to be a solicitor up the road called Peter Scholes and I regularly got invited to legal corporate events which I might have taken up had I wanted to spend an afternoon with a bunch of solicitors.  I can only imagine that he experienced something similar (I tend to agree with him).

Lifestyle, or rather work/life balance is a far more productive debate than this dead-end saga. 

I've often been pulled rather than self motivated but I now have a comfortable over capacity (nicer than bit of slack) and intend to keep it like that.  Constantly working up to the limit of resources and trying to force growth when growth is not actually needed is silly & life shortening. 

Or, as I'm oft heard to tell my clients, "when you're grown up, growth just makes you fat"

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By cymraeg_draig
05th Jan 2011 18:05

Drivel

@CD - poor bookkeeping means clients:

Are exposed to tax investigations, fines and penalties Do not received best advice because the information is not available Do not have reliable management information

Is that what clients want?

 

Posted by Bob Harper on Wed, 05/01/2011 - 16:26

 

What utter drivel.

Poor bookkeeping means that clientsw get their accountant to do it for them, and as a result actually end up with better advice, better management information, and far less exposure to tax investigations.  Incidently we have not had a single client pay a fine since self assessment began.  "fines" are automarically rejected and disputed and not one has stood up to scrutiny. One case took 8 years - but we won. I wonder how many other firms have that record?  

Incidently, we dont charge clients for getting penalties cancelled - call it "added value".

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By petersaxton
05th Jan 2011 18:08

Trial of software - why so reticent?

"The software company being liquidated had no impact on the value accountants get from the software through increased profits."

But it does mean there's a doubt that you can do more than talk about things.

"The software was built and developed from criticism but if you do not like my judgment you are less likely to like it because I quite a say in the design. Anyway, like I said we do not do demos without an assessment of the opportunity/value and reviewing the firm’s sales and marketing capabilities. And, we would not do this now because we are not accepting new firms at the moment. All I can do is put you on the list."

I'm only asking to have a look at the software to give an opinion on it. Obviously I wouldn't use it commercially without paying if that was an option.

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By Bob Harper
05th Jan 2011 18:15

Strategy first, software second

@David - I do not recommend one software product for any and all situations. The software we have developed is designed for a specific user profile so I recommend firms target those types of clients. That way the software will be right and that is strategy and why a firm needs to be effective with their sales and marketing.

The value to be identified in the meeting will be uncovered by asking relevant questions linked to the firm’s proposition. This questions are developed in the marketing strategy and planning stage.

The issue I am highlighting is clients who want to do their own bookkeeping and accountants whose business model is time based basically not really being committed to helping their clients improve their bookkeeping because they see it as cutting their fee base.

I accept not all clients are right for Value Pricing.

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By petersaxton
05th Jan 2011 18:23

Lifestyle

“Peter - there used to be a solicitor up the road called Peter Scholes and I regularly got invited to legal corporate events which I might have taken up had I wanted to spend an afternoon with a bunch of solicitors.  I can only imagine that he experienced something similar (I tend to agree with him).”

I’m sorry you missed out on those accounting events!

<<<Lifestyle, or rather work/life balance is a far more productive debate than this dead-end saga.

I've often been pulled rather than self motivated but I now have a comfortable over capacity (nicer than bit of slack) and intend to keep it like that.  Constantly working up to the limit of resources and trying to force growth when growth is not actually needed is silly & life shortening.

Or, as I'm oft heard to tell my clients, "when you're grown up, growth just makes you fat">>>

I’ve been working really hard and I think by tomorrow I should have all my personal tax clients with 31/01/11 deadlines done – I may be waiting for them to give the OK to submit, though. It's hard work being up to date but good to have a complete lack of external pressure.

I have a few company clients to do and more personal tax return data arriving but it will be strange when I am totally up to date with paying work. I can fill the time easily with web site work, newsletters, systems improvements and even a bit of marketing! When I look at my accounts the vast majority of my fees come in the quarters ending and starting the year. I’m going to make a special effort to get them spread more evenly.

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By David2e
05th Jan 2011 18:35

Views

Bob

Sorry if I started to draw opinions on the approach you're suggesting.  It hasn't been clear to me solely from this discussion and I keep seeing rather specific assumptions in your arguments and others leading towards information from outside the discussion.

I'd say the rest of us here are not expecting the targetting of certain clients and charging in a very set manner to be the basis of the discussion.

I don't see how clients wanting or not wanting to do their own bookkeeping is relevant to the points.

I also wouldn't have thought we were discussing a whole business model on being time based or not, simply that being aware of the costs of time was important that recording it may have it's benefits and be helpful with pricing.  I don't see how being aware of those costs limit pricing to be done on any basis as no proper case against it has yet been stated.

David Toohey
The Accountants Circle

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By petersaxton
05th Jan 2011 18:39

How can you get it so wrong so consistently?

“The software we have developed is designed for a specific user profile so I recommend firms target those types of clients. That way the software will be right and that is strategy and why a firm needs to be effective with their sales and marketing.”

What is the user profile?

“The value to be identified in the meeting will be uncovered by asking relevant questions linked to the firm’s proposition. This questions are developed in the marketing strategy and planning stage.”

What do you mean by “firm’s proposition?”

“The issue I am highlighting is clients who want to do their own bookkeeping and accountants whose business model is time based basically not really being committed to helping their clients improve their bookkeeping because they see it as cutting their fee base.”

“Time based”? All accountants have to take into account time if they want to avoid bankruptcy. Why do you keep thinking that accountants only consider one aspect of their business? This is totally different to reality. Similarly, accountants do not see improving client’s bookkeeping as cutting into their fees. They would prefer to work with more clients with improved record keeping which would result in more fees for the same amount of work. Bob, how can you get it so wrong?

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By Bob Harper
05th Jan 2011 18:48

Values

@CD - the experience I have had is that accountants sort out the books after the year-end when it is too late for tax planning and the client has not had high quality management information during the year to make the best decisions let along proactive input from their accountant.

@Peter - you are free to doubt me but what is important is the accountants that use the software and the ones I work with on a marketing assignment. At this time I am not sending out a demo, call the telephone number oif the accountant you asked for.

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By petersaxton
05th Jan 2011 19:01

No demo, no surprise

“@Peter - you are free to doubt me but what is important is the accountants that use the software and the ones I work with on a marketing assignment. At this time I am not sending out a demo,”

Why won’t you send me a demo? You have failed to give a valid reason.

“call the telephone number oif the accountant you asked for.”

I will do as soon as my more urgent work is completed.

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By cymraeg_draig
05th Jan 2011 19:02

.@CD - the experience I have had is that accountants sort out the books after the year-end when it is too late for tax planning and the client has not had high quality management information during the year to make the best decisions let along proactive input from their accountant.

Posted by Bob Harper on Wed, 05/01/2011 - 18:48

 

Again more assumptions.  You obviously have experience of low earning clients as any client with a turnover above the VAT threshold needs their books done every quarter.

And actually, you have just shot yourself in the foot.

Earlier you referred to cpmpliance work as dealing with "old" information - which of course is correct. Making decisions however, relates to what is GOING to happen in the future, not what has happened in the past.

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By Bob Harper
05th Jan 2011 19:44

Surprise

@David - recording time to calculate costs to help in pricing is cost plus pricing because the cost is the focus of the thinking. I really thought you had that?

Value pricing is about agreeing the price on the value and then looking at costs. And, you do not need to record time to do cost accounting. Time recording just makes you more accurate about what is not important.

@CD - doing a VAT return is not proper bookkeeping and it is not about old information but real time information.

@Peter - I have given you the reasons for not offering you a demo. I think they are valid, you do not - that is a surprise. 

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By petersaxton
05th Jan 2011 20:28

We think for ourselves while Bob parrots a book

“@David - recording time to calculate costs to help in pricing is cost plus pricing because the cost is the focus of the thinking. I really thought you had that?”

Why is the cost the focus of the thinking? I can take into account multiple elements and I am sure that David can, too. Maybe it’s one of the reasons why we are accountants.

“Value pricing is about agreeing the price on the value and then looking at costs. And, you do not need to record time to do cost accounting. Time recording just makes you more accurate about what is not important.”

I disagree that is what value pricing is.

I have in front of me a book by Ronald J Baker titled “Professional’s Guide To Value Pricing” 5th Edition. On page 565 there is a checklist titled: “Questions to ask yourself before you set a price”.

The first item is: “How much time and labor will be required?”.

The third item is: “What is the customary price for similar services in the locality?”

What have we all been saying?

I see that you use a lot of the phrases used in the book. Maybe you haven’t got up to page 565 in your reading?

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By petersaxton
05th Jan 2011 20:31

What is valid?

“@Peter - I have given you the reasons for not offering you a demo. I think they are valid, you do not - that is a surprise.”

What inhibits you from sending me a trial or demo? Usually the reason is the software is rubbish and the software provider is looking for gullible mugs who’ll pay up and won’t be able to get their money back. 

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By Bob Harper
05th Jan 2011 21:02

Valid pricing

@Peter - knowing how much it will cost to deliver the service is not the basis of the price; it is the basis of agreeing to it. The same information used in different ways.

You have explained that you add something on to the cost to get to the price I recommend working backwards from the value. I do not see what your argument is.

Your usual reasons for not being offered a demo/trial do not apply here because the software is not available to purchase. However, this is under review so maybe that will change. 

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By petersaxton
05th Jan 2011 22:07

Bob would get too close to his potential clients

"@Peter - knowing how much it will cost to deliver the service is not the basis of the price; it is the basis of agreeing to it. The same information used in different ways."

What's this about the price in the local area that you seem to have ignored (copyright Bob Harper)?

"You have explained that you add something on to the cost to get to the price I recommend working backwards from the value. I do not see what your argument is."

For the last time, my position is that you need to know your cost before agreeing a price. If I gave the impression that I come up with a cost and add something to it to determine the price let me make it clear that I may have worded it badly. Carry on saying I am in favour of one thing as much as you want but it will simply make you look foolish especially as you can't even agree with Ron Baker. You have form with this - saying that accountants want clients to have bad bookkeeping and that accountants try to sell time. Your way just does not work with clients. They will think you are a bullshitter. Most would walk out well before you got to their children's education and their retirement saying "I only wanted to know if you could do my accounts and tax and nothing about entering into a civil partnership!"

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By cymraeg_draig
05th Jan 2011 22:29

Now I know why you're a salesman and not an accountant

@CD - doing a VAT return is not proper bookkeeping and it is not about old information but real time information.

Posted by Bob Harper on Wed, 05/01/2011 - 19:44

 

 

How the hell do you think the figures on a VAT return are calculated?  Do you think we just think of a number and double it?  Or maybe we all should put down what we think the "value" of imputs & outputs should be?  

And since a VAT return must be submitted within a month of the quarter end I'd say that its about as "real time" as it gets.

Anything more up to date than that is a FORECAST - not a fact.

I wouldn't mind Peter pricing up a job for me to do, or doing my VAT return, but after that comment Bob, I wouldnt let you near our petty cash tin let alone anything more complex.

 

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By petersaxton
05th Jan 2011 22:58

Our hero has been on a course to learn to spell VAT. Now he can

"How the hell do you think the figures on a VAT return are calculated?  Do you think we just think of a number and double it?  Or maybe we all should put down what we think the "value" of imputs & outputs should be?"

I like that one!

Bob doesn't do real. You should know that by now.

Client: Can you do my VAT return for me?

Bob: First we need to understand your real needs.

Client: I really need my VAT return done.

Bob: But you understand this VAT return can have a big effect on your children's education, don't you?

Client: No

Bob: Let me assure you it does. You can trust me. I'm not an here today gone tomorrow salesman who goes bust before you can say value pricing. How much is your child's education worth to you?

Client (yawning): £50

Bob: Say you have another nine children. That's eleven in total.

Client: It's ten

Bob: That's what I said. £50's per child. That's £600 in total.

Client: £500

Bob: That's what I said. How about we split the difference? I'll do your VAT return for £275.

Client: Why not £250?

Bob: Why?

Client: £250 is half of £500.

Bob: Are you sure? (makes a phone call) I didn't mean split it in the middle! Ha ha ha

Bob: OK. it's a bankrupt stock sale so I'll do it for £250 for this day only.

Client: Here's the paperwork

Bob: Scream!!! This will take me days to do!

Client: So what? We agreed the price.

Bob: Now we need to look at the costs.

Client: You should have thought of that before, silly [***]. Have the completed VAT return on my desk the first thing Monday morning.

Bob: But I'm a knowledge worker!

Client: Shouldn't take you long then should it?

I'd also like to see Bob challenge Ron Baker about his view of costs and local prices for the same service at the next happy clappy event.

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By cymraeg_draig
05th Jan 2011 23:11

Knowledge workers

But I'm a knowledge worker!

Posted by petersaxton on Wed, 05/01/2011 - 22:58

 

Actually I AM a knowlege worker. 

I KNOW I need to know how long a job will take before I quote for it.

I KNOW how to run a business - I've done it succesfully for 40 years.

I KNOW that a fool and his money are quickly parted by snake oil salesman types.

and I KNOW that by giving value for money you keep clients (some for 20-30 years) and gain recommendations.

I also KNOW that our clients get sound advice that keeps them in business & helps them grow, they dont get empty promises and fancy schemes.

I can sleep at night - I sometimes wonder if others can.

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By petersaxton
05th Jan 2011 23:25

They can sleep easily

"I can sleep at night - I sometimes wonder if others can."

They can. They have no morals and don't care about right and wrong. They'll say anything to earn a few quid and feel no shame at leaving creditors behind having lost a small fortune.

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By Bob Harper
06th Jan 2011 08:39

Crack on

@Peter - the reason I am saying you are cost plus is because you said “the accountant will then decide whatever they expect on top of this (cost) figure” when talking about pricing.

If you were value pricing I would expect you to say something like "after a value based discussion the accountant will then think what percentage of value should I ask for?"

Only then you would consider the costs on the basis of assessing how much profit would be made and whether the engagement is worthwhile. What this means is that value (not price) is the driver of the price. The cost is the driver of the decision to commit.

@CD - VAT returns are often completed without control accounts, most notably the bank being reconciled. Adding up invoices (or ins and outs of the bank) without accurate/correct analysis with loads of stuff dumped into a miscellaneous column is what I was referring to.

@Peter & CD - you seem to be having fun together, crack on.

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By petersaxton
06th Jan 2011 08:53

Poor marketing

"@Peter - the reason I am saying you are cost plus is because you said “the accountant will then decide whatever they expect on top of this (cost) figure” when talking about pricing.

If you were value pricing I would expect you to say something like "after a value based discussion the accountant will then think what percentage of value should I ask for?"

Only then you would consider the costs on the basis of assessing how much profit would be made and whether the engagement is worthwhile. What this means is that value (not price) is the driver of the price. The cost is the driver of the decision to commit."

So whatever I say you will still argue against your interpretation of my position".

I don't think any accountant is foolish enough to have one of your "discussions. The accountant may think what the client will pay but would never chase a potential client away by giving such a poor impression. For somebody who is into marketing I am surprised you are so poor at marketing yourself. I can just imagine you going round the houses discussing pensions, children's education, etc. and for any potential client stupid enough to sit it out while you work out your percentage of your "perceived value" they will know they won't pay very much over what other accountants are charging and if you had any common sense you wouldn't want to charge lower than what your costs were. Therefore, the price must be within this window or you are wasting everybody's time. But it looks like that is your one talent.

Have you ever been an accountant and discussed price with a client?

You may of discussed price in the role of selling your marketing services but then you are dealing with a much more gullible person.

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By cymraeg_draig
06th Jan 2011 08:55

Control

@CD - VAT returns are often completed without control accounts, most notably the bank being reconciled. Adding up invoices (or ins and outs of the bank) without accurate/correct analysis with loads of stuff dumped into a miscellaneous column is what I was referring to.

 

Posted by Bob Harper on Thu, 06/01/2011 - 08:39

 

You must have been trained by a particularly useless accountant. To establish that all sales & purchases are properly accounted for full sales ledger, purchases ledger, petty cash, and bank controls must be produced. Anything less would be slap dash and unacceptable - at least in our practice.  As for a "miscellaneous column"?  Such a thing is not allowed.

I guess that's the difference between accountants - and salesmen.

 

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By andypartridge
06th Jan 2011 09:25

VAT Returns

I have to agree with C_D on this.

Additionally, if the VAT Returns are prepared on a cash accounting basis a bank reconciliation is fundamental in the preparation. Are you saying, Bob,  that MORE does not facilitate this?

-- Kind regards Andy

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By Bob Harper
06th Jan 2011 09:26

Transition

@Peter - when you say you set a price from the value after having a value discussion I will know you are not cost plus pricing. But, so far you have said you need to know your costs to work out the fee. One approach to pricing is value down; the other is cost up.

What is a giveaway is you recording time. When a firm adopts value pricing they stop recording time. The two go hand in hand. So, if a firm is still recording time (even if they do not using time to bill) my take is they have not adopted value pricing regardless of what they think or say.

It is just an opinion which includes the firm recording time while they make the transition.

@CD - glad to hear your thousands of clients have changed their bookkeeping habits since we last had this debate.

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By Becky Midgley
06th Jan 2011 09:32

Enough

I think you have all more than had your say on this one.  Thread closed.

*Update 13.38 06/01/2011: 

It has been brought to my attention that I should have included more detail about why I decided to close this thread earlier today. The members involved are quite right to seek clarification from me.

Having read and followed this thread from the beginning, it was my view that members had more than had sufficient opportunity to express their views and reply to each other. After 182 comments (a record on Aweb!) I was conscious that it might descend into a personal spat soon (as the original thread did) and I wanted to avoid things getting to this point. Perhaps this was the wrong decision, and I am going to get another member of the team to review the thread and my decision because we need to be sure I have done the right thing.

As community manager, I have a duty to protect the community as a whole in that we serve our purpose of being a safe environment for people to engage in discussion and debate and hopefully learn something along the way. I have to also protect individuals in this process though, and on this occasion I thought it prudent to intervene before things got out of hand.

We experienced some high levels of tension on Aweb recently, and it became a negative community more often than any of us liked. I am trying to prevent us slipping back in this direction, and I hope everyone here who values this space would support me in this.

Having said that, I am only human, and I do make mistakes (I know, it's hard to believe) so it is important that you have a voice and feel comfortable to question my decisions. We do have a procedure which I welcome and value, so if anyone thinks I have ever made the wrong decision please come forward and tell me your thoughts, I will always listen to what you have to say.

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By Becky Midgley
06th Jan 2011 14:45

An admission from me and an opportunity

Having asked my team to review this thread in light of my post above, it has been decided that we should re-open it to ask the OP, First Tab, if they feel the thread has been helpful in repsonding to their original post. So, over to you First Tab - has it been helpful? Has it answered your query?

So that's the opportunity, and now for the admission from me: I fell foul of assumption today, and you know what they say about assuming, it makes an '[***]' of 'u' and 'me'!  Given that the people involved in this discussion were the same folks from the first discussion I assumed that people would understand that we might be heading in that same negative direction. And given that First Tab had asked for things not to go this way, I used this as your warning. What I should have done is reiterate that warning before closing the thread. And that was my bad decision. I apologise to you all for this.

Thread re-opened for First Tab to reflect on the question of how useful this has been.

Thanks for your patience in this matter, and to those of you who questioned my decision today, it's good to know you care so much about your community.

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By cymraeg_draig
06th Jan 2011 16:07

Moderation or censorship

Becky - you have a difficult job as we all know.

There is a fine line between moderation and censorship.

There is also a fine line between critisizing someones views or opinions, and personal critisizm.

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By FirstTab
06th Jan 2011 21:39

Lost interest in this thread way back

Thanks Becky for giving me the opportunity to have a say on this extra long thread.

My thanks to those who commented. I think there are some great and helpful comments.  

I really like AW threads  since they move into directions that I  just do not expect. Though at times it is in a direction that just not do any justice. This is one of those times. I lost interest in this thread way back once it started going through the old ground again. The only difference was the lack of direct personal attacks.

Having said that a very small minority appear to want to leave this thread open. AW is about catering for all types (within reason) because of this, it is with some difficulty I am asking for this thread to remain open. Thankfully I have the luxury of cancelling any further email updates on this thread. I will do this. I think this thread has more than run its course.

Becky your honesty is admirable. It is something, particularly proud Mars Accountants (including me!), should learn from. I am right you are wrong responses are getting really tiresome.

 

 

 

 

 

 

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By cymraeg_draig
06th Jan 2011 23:21

FT

Once you start a thread there is no knowing which way the conversation will go.

However, when someone starts to put forward ideas which are quite frankly dangerous, and have the potential to bankrupt those taking them seriously, then you have to expect others to point that out in no uncertain terms.  It would be unprofessional not to. 

Actually it's encouraging to see that there are still accountants out there who still have a sense of duty to more than just their own wallets. 

 

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By Paul Scholes
07th Jan 2011 08:44

FT & CD

FT - Well commented but, as with several of your posts, might I suggest that you step in earlier to offer your views and maybe bring some reality back to the discussions?

CD - Yet again this thread became a talking shop between a small number of the same men who don't get on.  I've suggested before that you and Bob take your playground point scoring onto your own discussion group or via PMs but the suspicion is you both love the limelight too much.  Far more professional (and grown up) to be the one that turns his back to bring the squabble to a natural death?

I do not have the luxory of removing these waste of Data Centres from my threads as I get timed-out.  I've asked the tekies if they can help me but Becky, if you're watching, can you promt them for me please?

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By petersaxton
07th Jan 2011 09:37

Selfishness

“FT - Well commented but, as with several of your posts, might I suggest that you step in earlier to offer your views and maybe bring some reality back to the discussions?”

That’s not First Tab’s style. He’s an asker of some good and some poor questions but I don’t see any help or advice given nor much of an opinion being expressed.

“CD - Yet again this thread became a talking shop between a small number of the same men who don't get on.  I've suggested before that you and Bob take your playground point scoring onto your own discussion group or via PMs but the suspicion is you both love the limelight too much.  Far more professional (and grown up) to be the one that turns his back to bring the squabble to a natural death?”

Paul, do you really think that using the phrase “playground point scoring” is grown up?

Bob expresses his view here with an obvious distain for any accountant who doesn’t agree with him. He says that accountants want their clients to keep bad records and if they don’t agree with him he accuses them of being “blinkered”. All I have seen from Bob in this discussion is phrases lifted from books. As CD as mention, his recommendations to not consider costs until a price is agreed and to ignore other local accountants’ prices for the same service will not help any inexperienced accountant. His suggestions that accountants should concentrate on such things as a potential clients children’s school fees and retirement plans when they only want a set of accounts and tax returns prepared will only push them into the arms of competitors. It’s my belief that Bob’s animosity to accountants stems from his failure to make a career in the profession and is compounded by his failure in business which he blames on accountants.

Keeping quite while such ridiculous views are being peddled is simply selfish.

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By petersaxton
07th Jan 2011 09:47

Should dangerous ideas be challenged?

Those who complain about people challenging Bob's views don't seem to complain about Bob expressing his views.

We don't try to change threads into a platform for our views but if somebody promotes dangerous practice then it seems reasonable to challenge the statements.

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By cymraeg_draig
07th Jan 2011 10:05

Unacceptable personal abuse by Paul

CD - Yet again this thread became a talking shop between a small number of the same men who don't get on.  I've suggested before that you and Bob take your playground point scoring onto your own discussion group or via PMs but the suspicion is you both love the limelight too much.  Far more professional (and grown up) to be the one that turns his back to bring the squabble to a natural death?

I do not have the luxory of removing these waste of Data Centres from my threads as I get timed-out.  I've asked the tekies if they can help me but Becky, if you're watching, can you promt them for me please?

Posted by Paul Scholes on Fri, 07/01/2011 - 08:44

 

How interesting that YOU start making personal comments whilst having the nerve to critisize others. How interesting also that you select me as the target for your comments when a brief look at this thread shows that I have made very few posts compared to other contributors.

Your posting is offensive and simply demonstrates that YOU appear to be pursuing a personal agenda (not for the first time).

As for the innuendo regarding professionalism, I act in the the interests of those who may be gullible enough to fall for bad "advice" and slick sales tactics.  

Perhaps now you would like to explain - 

Why you aim your coments at me when I have made very few comments compared to others.?Why you aim your insults at me when I have restricted my comments to the topic and made no personal comments.?Why you feel it acceptable for YOU to post personal abuse of other posters.? Who actually elected YOU as moderator of this forum?  

 

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By Bob Harper
07th Jan 2011 10:39

Value guessing

@CD - the thing about an accountant’s wallets is that the best way to make it fat is to search for maximum value for the client.

This is not done leverage time or being efficient. It is done from value pricing so, from my perspective I see value Pricing, (and wealthy accountants) as being best for clients. Remember, under value pricing the accountant only takes a small share of the value created. 

The opposite of value pricing is trying to leverage time. So, I see this model as bad for clients because the focus is not what is not in the best interest of the client but the accountant.

To start up and/or to grow a practice now, it is not about general practice or even best practice but different practice. That is not to say that established players cannot make profit from general or best practice. It is just there is going to be less of it at lower margins for new comers.

@Paul - Peter and I have continued the discussion privately but that not the point of a forum.

Peter supplied some very interesting information about his pricing philosophy in these exchanges, which the OP and anyone else following the discussion have missed. Unfortunately, very often the penny drops at the end of a long discussion, a bit like finding keys in the last place you look.

@Peter - there is no animosity because, I know accountants (including you) mean well. I actually believe accountants are the best people to support UK businesses to reach their full potential and can have a great impact on our society. That is why I use the phrase "unconsciously unethical".

But, you are right, I suggest accountants:

Only consider costs after the price has been agreedIgnore what the local competition is doing (unless they are value pricing)Focus on what clients want not what they need

I do not think anyone has said you cannot challenge my views and opinions but you seem to prefer attack personally and try to undermine me rather than what I say. The people I speak with who follow AW tell me that every time you do this it tells them that you have run out of steam on the topic.

Anyway, I think we cleared up in our private discussion that you are more value guessing than value pricing.

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By David2e
07th Jan 2011 11:14

Still insisting. Why?

Bob

Why do you keep insisting that being aware of costs means it must be 'cost plus' pricing with the costs being the focus?

I and others have said this merely gives a minimum price and any method for the actual price can be applied.

Your concept of agreeing a price, and then afterwards working out costs involved rather than before discussing pricing with the client is something many of us just find rather odd and a potentially unprofessional approach.  To then work out the costs and backtrack on the price agreed if it is not above the costs would mean the final pricing result need not be any different.

It has been agreed and understood by all that time is a cost (of delivery). Being able to estimate this with reasonable accuracy can be quite important and valuable in ensuring work will be done profitably.  Time recording may not always be needed for this, but it may be helpful.  It can also be helpful for reviewing the profitability of work done, assessing efficiency, and improving on these for the future.

None of this should mean it has a significant impact on the quality of work, the pricing methods used, or the approach with the client.

These are all points you want to state as fact but have not given any reasons as to why you believe it does have a significant impact.  Why is knowing costs the focus of thinking? Why must it be the focus point of work done and not simply the work itself? Why does it mean pricing can not be determined by the value of the work to the client?

For example...

An accountant realises a method to saving a client £5K in tax in a year.  He knows from past experience, either well aware or from time records, that arranging this may be 16 hours of work including meetings etc with the client. He works on a base cost rate of say £20/hr, due to average staff costs of those that can do this, and he typically aims for 3x costs in revenue.

He now knows his time costs would be around £320, and if he were to charge hourly then he would quote around £960.  Why knowing that can he not use value pricing for this work?

He knows what it's worth to the client and with this he generally splits this for his fee, and would charge £2,500.

 

As far as I can see your explanation of 'cost plus' would simply mean the price is profitable and really all work should fit this.  Being aware of costs does not mean only 1 pricing method can be used, as per my example above.

Peter's little walkthrough on Wed, 05/01/2011 - 22:58 of a client meeting, though with it's humour thrown in, does demonstrate the issues with agreeing a price without knowing cost and why this just seems such a wrong approach.

Once in the discussion I did see you mention 'budget', along with price. This is something that could be discussed in the initial meeting but it is completely different to agreeing an actual price.

"if a firm is still recording time (even if they do not using time to bill) my take is they have not adopted value pricing"

Why?

Even if time recording is used to ensure work done continues to be profitable, why does this mean they can not value price work?

David Toohey
The Accountants Circle

Note: I actually wrote the above post before seeing the thread may be stopped, and held off on posting until some of the discussion points were continued again.

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By petersaxton
07th Jan 2011 11:52

Setting prices

“This is not done leverage time or being efficient. It is done from value pricing so, from my perspective I see value Pricing, (and wealthy accountants) as being best for clients. Remember, under value pricing the accountant only takes a small share of the value created.”

How do you “value price” a set of accounts or tax return?

“The opposite of value pricing is trying to leverage time. So, I see this model as bad for clients because the focus is not what is not in the best interest of the client but the accountant.”

Nobody is advocating the opposite of value pricing. Why bring it up?

“To start up and/or to grow a practice now, it is not about general practice or even best practice but different practice. That is not to say that established players cannot make profit from general or best practice. It is just there is going to be less of it at lower margins for new comers.”

Why is there going to be less of it at lower margins for newcomers? Because they are less experienced? Then they should get experienced at what clients want not at looking to make a fast buck.

“Peter supplied some very interesting information about his pricing philosophy in these exchanges, which the OP and anyone else following the discussion have missed. Unfortunately, very often the penny drops at the end of a long discussion, a bit like finding keys in the last place you look.”

All I said was: “I do a mix of methods when coming up with a price. I say what my basic price is for a service based on what the client is able and willing to provide. I say that if they don't provide the data in an acceptable form it may cost so much an hour to sort out.” The minimum an accountant should do a job for is something more than cost. The maximum is not much more than what competitors charge.

@Peter - there is no animosity because, I know accountants (including you) mean well. I actually believe accountants are the best people to support UK businesses to reach their full potential and can have a great impact on our society. That is why I use the phrase "unconsciously unethical".

“I do not think anyone has said you cannot challenge my views and opinions but you seem to prefer attack personally and try to undermine me rather than what I say. The people I speak with who follow AW tell me that every time you do this it tells them that you have run out of steam on the topic.”

I don’t undermine what you say? Have I not criticised the idea of ignoring costs until a price is agreed? Have I not criticised the idea of ignoring other local accountant’s prices for the same service?

“Anyway, I think we cleared up in our private discussion that you are more value guessing than value pricing.”

You call it “guessing” and I will call it estimating. We don’t know what the future will bring so a certain amount of estimating seems reasonable to me. When you come up with a price how do you ensure there is no guesswork? Or do you just ignore reality and prepare precise calculations that are not relevant to any true “value”?

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By Bob Harper
07th Jan 2011 11:54

Think about it

@David - first, the value is not £5,000 it is what £5,000 means to the client. A billionaire winning the lottery will probably not value it as much as you and me to the point that I doubt they will even buy a ticket.

Also, the cost is not just the accountant’s fee but the hassle and risk to the client. Many clients would not go for a tax saving if they perceived it would expose them to a tax investigation. So, the tax strategy you referred to could have negative value.

My comments are from value thinking which is fundamentally different to cost thinking. Like I said to Peter, you are just guessing the value and using cost as a reference point. The only way to value price is to talk with the client and they do not know or care about the time/cost to deliver.

When a firm embraces value pricing they see recording time as not only something that is not needed but dangerous because it leads to not running the practice in the most optimal way. 

So, recording time and knowing the costs before the price means the firm is not value pricing but is doing some form of cost plus pricing and just guessing value. It is cost plus what they firm thinks the client thinks rather than what the client thinks.

Hope that helps.

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By Bob Harper
07th Jan 2011 12:08

Branding

@Peter - value pricing compliance work is relatively easy because there is less with the client about. You could off by asking the client what seat they want to sit in; first class, business or economy. Your strategy could be to only fly first class passengers or it could be to target economy - both are value pricing based.

You can remove the guesswork from pricing by involving and asking the client.

The only reality that matters is the clients. However, reality is perception and this is why value marketing and value selling is part of value pricing. This is why branding is so important, and I do not mean a fancy logo although high quality marketing collateral is part of it.

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By David2e
07th Jan 2011 12:53

Skirting around the point

Bob

You're really skirting around the point here and ignoring it.

Sure the value may not be £5K itself, but what can be done with that.  The whole point in money is to put a figure on value and it being already done it's not really for an accountant to jump into judging what a client can do personally with extra money in the pocket, particularly since the £5K is already given a financial value. How else can you ask for the client to give a monetary value to the savings of £5K? Can they say it's worth anything different to them?

For the sake of argument, there are no other issues to consider. The client and the accountant have no ethical issues with reducing tax, and the risk of an investigation will not change.

So, I'm only trying to point out that knowing cost beforehand does not mean a pricing method is necessarily set, nor does it mean that the accountant can not consider the value to the client.

Again, it is irrelevant whether or not the client cares about the supplier costs. The supplier cares, or at least should, and that's what matters.

Without answers to questions asked and still getting statements of fact with no basis it seems this really can go nowhere.

David Toohey
The Accountants Circle

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By petersaxton
07th Jan 2011 12:53

Clearly wrong

“Like I said to Peter, you are just guessing the value and using cost as a reference point. The only way to value price is to talk with the client and they do not know or care about the time/cost to deliver.”

A more likely reference point is what other accountants’ charge.

I would think that most would feel uneasy about an accountant who asks them various questions about what they see as irrelevances.

“When a firm embraces value pricing they see recording time as not only something that is not needed but dangerous because it leads to not running the practice in the most optimal way.”

I disagree. Ignoring cost when setting prices is far more dangerous and sub-optimal.

“So, recording time and knowing the costs before the price means the firm is not value pricing but is doing some form of cost plus pricing and just guessing value. It is cost plus what they firm thinks the client thinks rather than what the client thinks.”

That is just so obviously not true.

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By petersaxton
07th Jan 2011 13:00

Try again

My question was: “How do you “value price” a set of accounts or tax return?”

Can you give me an example of what you would say to the client?

If I visited an accountant and said I wanted a set of accounts and tax done and they said: “what seat do you want to sit in; first class, business or economy?” I would get up and walk out because the person is obviously a bullshitter.

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By petersaxton
07th Jan 2011 13:06

Tainted

"So, I'm only trying to point out that knowing cost beforehand does not mean a pricing method is necessarily set, nor does it mean that the accountant can not consider the value to the client."

David, you may be only pointing out what you and I know but Bob doesn't accept that. He seems to be saying that once your mind considers cost it is tainted and unable to "value price".

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By cymraeg_draig
07th Jan 2011 14:07

Dangerous ?

When a firm embraces value pricing they see recording time as not only something that is not needed but dangerous because it leads to not running the practice in the most optimal way. 

So, recording time and knowing the costs before the price means the firm is not value pricing but is doing some form of cost plus pricing and just guessing value. It is cost plus what they firm thinks the client thinks rather than what the client thinks.

Posted by Bob Harper on Fri, 07/01/2011 - 11:54

 

NOT knowing how long tasks take is where the danger lays.

We don't record detailed time like many practices do, but make sure that we known whether a client's work has taen 1 hour, 10 hours, or 5 weeks to do.  Not only does this allow us to ensure that we dont make a loss, it also allows monitoring of staff to ensure they are working efficiently as there wouldnt be much sense in paying someone a salary which was twice as much as the chargeable work they produced. 

As for "value pricing" - we get a sub contractor whose accounts we do for, say £500 a year.  As often happens he then recommends half a dozen of his mates who he regularly works alongside on the building sites. It doesnt matter what kind of records they keep, there is only one price you can charge his mates - £500.  Value has nothing to do with it, it's simple commercial sense. 

And I would suggest that my practice is run in the optiimal way, and it's lasted for 40 years, so I must be doing something right. 

The problem is that you try to turn running a business into some kind of "formula" that can be learnt from a book.  It isnt.  You cannot teach people to run businesses, they either have the inbred ability and common sense, or they dont.  And it doesnt matter if its a professional practice or a burger bar, a one man show or a multi-national corporation,  managing a business comes down to the common sense of the person in charge, not "theories" and books written by so called "experts".

 

   

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