I have the chance to quote accountancy services for compliance work and general tax planning for the above business. A relatively simple business with an in house bookkeeper who also prepares mid year P&L and VAT returns. They are a wholesaler in the building industry with one rented premises. Some fixed assets including vehicles and cars and a few employees. Current accountants are a medium sized national firm. We have 3 staff and rented premises. Our current fee structure is mid range because we have a good reputation, are proactive and do a good job - albeit our clients are generally with lower turnover that this one (hence the question). Could I please ask what you would quote for the this client per year if you were me?
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What systems does the client use and how well do they use them? This is critical, isn't it, to be able to offer a realistic fixed fee quote. The larger the client the larger the potential divergence from the standard you might expect which could leave you either exposed or make for difficulties in the relationship.
How long is it going to take?
What are your charge out rates?
What did the last firm charge?
Id start there myself rather than trying to be clever.
How long is it going to take?
What are your charge out rates?
What did the last firm charge?Id start there myself rather than trying to be clever.
All valid questions. Don't you think an accountant should ask himself this before posting a question.
I think the OP's question arises from the perspective that this is a much bigger client that they are used to and so their benchmarking data is not much use to them.
In my opinion, they need to go in and take a look at what they will be dealing with.
I'll say £4,500 to undercut Red Leader and still (if the records are good) make a nice fat profit on it.
Is there just the one company or other companies in the group? Assuming that you are talking to the company, then have a look and see what the current accountants are charging (so that you can undercut them). I'm with Mr_awol - around £4,500. But it does depend on many factors - how good is the book-keeper; how complicated are the directors/shareholders affairs (and are their Tax Returns to be included in the quote); indeed, how complicated is the share capital structure (alphabet shares?); (as Andy says) what systems are they using and are you familiar with them?
Could be a very good client though (I have one and they are great to deal with, happy with my services, a pay on the nail!)
Now red Leader is out I think it's a good time to mention that my previous quote didn't include £500 for the CT600
I would ask yourself if this client is likely to end up running your life/practice? You might be better off passing on this and sticking with what you know. We used to have one very large client and sacking them was the best thing we did!!
I agree in general with the discussion on this issue, but would add a point.
I have dealt with a company with £32 million turnover, and 20 employees and also a company with a smaller turnover and 350 employees. You can guess which took most time.
Turnover is only one area, so the advice to estimate the time costs etc is good
It should be possible to undercut the larger firms fees (with a generous safety margin), but in my experience they will "sharpen their pencils" if they know that they are in competition.
I always use the last accountants fee as the guide. You always will be told its easy and a piece of cake. The bugs only come out once you have committed to a price.
But then I never compete on price. Well not intentionally.
But yes £4k to £5k is probably the range.
I always use the last accountants fee as the guide.
Indeed. If they hated the previous firm they should expect to pay more for you, if they loved the previous firm you could agree to match it.