How much do people charge for fees?

I've quoted for a new client and I've been very under-cut, I've been asked to justify my added value

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I've recently met and quoted for working with a new client.  He is setting up a new company and I think will need a lot of hand-holding.  It will be a small company but with some complexity (overseas travel, worldwide sales, a few employees, contractors)   I’ve quoted a fee to included accounts, tax return, tax-efficient extraction advice, support of Freeagent (which he has selected to use), adhoc phone support and four face-to-face meetings a year, director's tax return, secretarial support on board minutes and confirmation statements.  In total I've estimated 12hrs a year.  He has got another local quote which is about a third (very low) of what I've quoted and he has asked me to explain my added value.  I've responded, but I was wondering if people can give me a rough how much their fees are for such a service?  Have other people come across this and how have they responded?

Thank you

Replies (19)

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paddle steamer
By DJKL
20th Jun 2017 15:05

Would likely depend on the overseas sales which would possibly come down to who (business/non business) and where the end customers are and whether it is goods or services being sold- i.e. do I need to do a lot of non chargeable reading!!!

Providing the 12 hours is for correcting records and the rest rather than preparing records I suspect I could do for something like £900, (£75 per chargeable hour) to absorb non chargeable set up/office admin time etc,however if a chunk of the work was basic data entry I would likely reduce the time merely inputting to say £40 per hour rather than £75, however would want minimum £600 irrespective of time (only do two companies below this threshold, one is family the other was my third ever client and has now ceased anyway)

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Red Leader
By Red Leader
20th Jun 2017 15:13

It's very difficult to demonstrate added value to a prospective client.
The reality is you have to come across as the more credible, impressive accountant than your competition.
Just bat it back to the prospect. Ask them who gave the better impression in the meeting, are the others qualified, have PII, have a track record, will there be good access to a partner level person, etc etc.

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Man of Kent
By Kent accountant
20th Jun 2017 15:24

What have you quoted and what has the cheapskate quoted?

Is the service offering comparable?
Unless you're charging big 4 charge out rates I don't see how Mr Cheap can offer what you are offering for the same level of service.

To be honest though I'm a bit long in the tooth for this and would just wish him well for the future.

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Replying to Kent accountant:
Teignmouth
By Paul Scholes
20th Jun 2017 16:03

Steady KA - who are you calling a cheapskate?

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Replying to Kent accountant:
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By Claire Whiter
20th Jun 2017 21:31

I've quoted £860 plus director's personal tax return. The other person has quoted £360 including personal tax return. I cannot see how this has been done, or at least not without blindly churning out the accounts with no feedback, interaction.

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Replying to Claire Whiter:
By Ruddles
20th Jun 2017 21:39

£360??? Someone is desperate for clients.

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Replying to Ruddles:
By mrme89
20th Jun 2017 21:48

£860??? Someone is desperate for clients.

I wouldn't do it for that and I'm aboke with a laptop in a spare bedroom.

When I first read this thread earlier this aft I thought 'I'd do it for £1250 and be cheap'. I thought the going rate would be £1500 as a minimum!

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Replying to mrme89:
By Ruddles
20th Jun 2017 23:06

Indeed!

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By Ruddles
20th Jun 2017 15:40

My absolute minimun for the services described would be £2,500. Probably closer to £3,500.

Difficult to say because I know nothing about him but I reckon that you've significantly underestimated your time.

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Replying to Ruddles:
paddle steamer
By DJKL
20th Jun 2017 15:52

On that basis I will caveat my above fee quote to ensure it is clearly understood that said quote is based on the presumption that 12 hours work is a reasonable estimate for the time required, any hours expended each year beyond twelve will, as outlined in my firm's engagement letter, be chargeable at a rate of £75 per hour or part thereof on a pro rata basis.

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By killer33
20th Jun 2017 16:26

No way I could deliver all those services in 1 hour per month. I'm seriously impressed if you can.

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Glenn Martin
By Glenn Martin
20th Jun 2017 16:49

Without knowing the figures, say you work on a £100 per hour. You have quoted £1200 yet your local rival will do it for £400.

Tell him to just save the £400 as well and have a go himself.

If you could do all you say including 4 face to face meetings in 12 hours that is very much a premium service and should be priced accordingly. If he doesn't get the value let him go.

when I quote for a job if the guy comes back saying he has a cheaper quote elsewhere but he liked me better I may chip the quote slightly if I like him or he has potential to be a better job.

I wouldn't worry losing jobs like this.

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Red Leader
By Red Leader
20th Jun 2017 17:31

Don't promise all those meetings. They are usually unnecessary and they use up a lot of time.

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By Claire Whiter
20th Jun 2017 21:34

Thank you everyone this is really useful.

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By dbowleracca
20th Jun 2017 23:11

I'm astonished that all of that could be performed in 12 hours. I would expect the 4 meetings to take probably 6-8 of those, at the absolute minimum 4. Leaving 8 hours to prepare accounts, tax returns and so on.

A fair fee for the level of service you have stated would be at least £1,800 - £2,400 I would say.

I wouldn't prepare Limited Company accounts for anything less than £750 plus VAT and that would be for the simplest, tidiest of jobs. But, we do prepare a proper file and use disclosure checklists etc. As part of our QA process which takes a bit of time to complete.

I would also be wary of someone who has met with multiple Accountants, it is very very rare that any prospects that I see have had a meeting with another firm.

If anything you should be saying to him you've reconsidered and would like to increase the fee to reflect the true value :)

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Teignmouth
By Paul Scholes
21st Jun 2017 11:05

This only goes to show that value is in the eye of the beholder on each side of the arrangement. Yes you do cut down the room for manoeuvre if you calculate fees based on time but many more firms these days are basing it on a lot more.

So, per Glennzy, how much I'll enjoy working with the client AND whether this may lead to other business is a big factor for me.

I'd also make the point that just because someone charges substantially less than you doesn't mean they will do a lesser job than you. I don't need new clients, have loads of spare time, only take on interesting work and have very few overheads so can easily charge far less than the firm up the road, the money is no longer that important to me.

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Replying to Paul Scholes:
Glenn Martin
By Glenn Martin
21st Jun 2017 13:39

The £860 quoted is a cracking deal for what they are offering to do, although i am unsure why they would need 4 meetings for must a small company.

You would have to question the job the guy is going to do for £360. (Its not you is it Paul).

Whilst cash may not be important to you Scholesy us lads who still have a mortgage need you to stop low balling us mind.

Come on give us a break.

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Replying to Glennzy:
Teignmouth
By Paul Scholes
21st Jun 2017 15:29

Ha! - bloody cheek - even I have some pride and a bottom line (and a £150K mortgage). £360 would be OK for me but only if I didn't have to have any meetings.....or talk to them, or do the accounts!

@Claire - did the client specifically ask for 4 meetings a year? As others have said, that really is onerous. I and many others now quote a fee which enables any contact during the year and, in reality, given email, phone calls and efficient web meetings, I only have a couple of clients who need more than one f2f meeting a year and some that need none.

In cases like this where the client favours you/me, cos we seem brilliant, but is sticky over the fees, I'd give them 2-3 months without charge, just to show them how brill you are then, if satisfied, they can pay the full fee, or if not can go elsewhere.

PS: Wow the site translated swear words - muffin clever

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By newstarter01
21st Jun 2017 14:16

£360!..geez...maybe they're outsourcing to India. That never seemed to take off the way Iris thought it would..

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