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How much to charge?

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Hello all, I am currently looking into setting up my own bookkeeping business and I am just curious as to how much I should charge. 

To give some insight into my experience, I have worked in industry running the accounts department for a construction SME for the last 2.5 years, I was trained in house and then tookover after 6 months. I have also been working through my AAT. Currently level 2 qualified and looking to complete my level 3 very soon. I don't have a great deal of experience dealing with accounts from an external point of view, which Is why I am not going to be taking on clients that I don't feel I could confidently provide a good service for i.e., Ltd clients or large sole-traders.

I am currently looking to find a job in practice, but with the current situation, new jobs are slim pickings unfortunately. Once I have gained experience doing more complex accounting and bookkeeping, I will then be able to provide more services to more clients. I already have one client who is a family member who is going self-employed next month and will be working in the construction industry, and I feel like my current experience is good enough to be able to provide a good service for his business. 

To go back to my actual question, I was just wondering what people charge their clients, do you charge hourly for general bookkeeping and then set rates for things like VAT returns? I'm looking at doing everything up to the trial balance basically, as well as VAT returns, software training and possibly payroll. As this is all stuff that I currently do, whether that be in my day job or through my studies. 

Any help on this matter would be greatly appreciated, thank you in advance. 

Replies (23)

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By Mr_awol
02nd Jul 2020 18:29

Can you offer bookkeeping services on a self employed basis as an AAT student? I’d be surprised.

Aside from that, I would say Between £10 and £15 per hour if you are able to practice

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Replying to Mr_awol:
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By Trainingday
02nd Jul 2020 18:50

Thanks for the reply. I believe you can, so long as you get AATQB status which you can apply for once level 3 qualified and I believe you can offer bookkeeping services whilst you are studying for your level 4. I did look into this a few months back out of interest, but will have to have another look to make sure.

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By Paul Crowley
02nd Jul 2020 18:36

But stick to bookkeeping and wages that you are confident with.
Try to get into a relationship with a practising accountant, referrals can then go both ways.
Do not give advice beyond your experience.
Get PII and trade through a Ltd company

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Replying to Paul Crowley:
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By Trainingday
02nd Jul 2020 19:15

Thanks for the reply. Yeah, I currently do the payroll for 15 staff members and do the PAYE returns, CIS returns and VAT. So this stuff I am happy to do for small businesses at this stage.
How much would you recommend I charge for the services? I am very competent in using Sage so am thinking of doing the advisor course so that I can provide Sage training and set-up as a service.

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Replying to Trainingday:
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By Paul Crowley
02nd Jul 2020 19:40

Be inexpensive to start but move prices as demand increases.
Trust me you are up against some real jokers who go way beyond experience and knowledge.
Know what you know, and do not guess. If you are not a tax advisor, do not answers questions or give opinions on tax. Resist the temptation that some clients will offer to "just finish it off and file"

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Replying to Paul Crowley:
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By Trainingday
02nd Jul 2020 20:14

Yeah, I wasn't thinking of charging top dollar as I don't think it'd be appropriate with my current experience etc. I think £15ish is reasonable for things like data entry work and maybe set rates for one off tasks for people.

I can imagine that there's a lot of incompetent people out there who jump into working for a client just because they think they'll get away with it, but I think that's the same with a lot professions. I'll just stick to what I know and be honest and up front with potential clients so that they know what my limitations are.

Thanks again.

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By ireallyshouldknowthisbut
02nd Jul 2020 18:53

Dont work for friends and family at the start.

You will live to regret it.

"small sole traders" are as complex from a tax POV as bigger ones. Eithr you can do tax or you cant. If you cant (and it sounds like you should not be) dont touch it.

Even VAT can trip you up, there is a big difference between processing it in corporate environment when its all "set up" and going into a business who knows nothing about it, and having to work out what the issues are.

Do what you know. Don't do any more. And learn to say "I don't know about that, I am a bookkeeper, that's an accountant question" and you will save yourself a huge amount of stress, and best serve your clients.

There is a real shortage of really good bookkeepers out there (whenever I find a good one, they get busy within 6 months), if that is your thing, get really really good at it, don't try and work outside your area and you will be much more likely to succeed, than trying to offer a wide range of services. Then you should be able to name your price, and have a thriving business doing what you do well for people you want to work with. Some partnerships with local accountants and you will be in a good place.

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Replying to ireallyshouldknowthisbut:
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By Paul Crowley
02nd Jul 2020 19:12

I agree, chronic shortage of good bookkeepers. Same experience that good ones are busy in no time.

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Replying to ireallyshouldknowthisbut:
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By Trainingday
02nd Jul 2020 19:23

Thanks for the reply. What you said makes sense and I am definitely not going to do anything beyond my remit, I don't what the stress as you mentioned, and I just don't think that it helps anyone and that it could cause complications. My plan is to get qualified as an accountant but in the meantime do bookkeeping, and then once qualified, offer both services and grow the business.

You've made some real good points in regards to the VAT and will definitely take that on board going forward. I like the tip on what to say when it's beyond me current level.

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blue sheep
By NH
03rd Jul 2020 06:46

A few things to start with
1. Dont limit yourself to a certain size of client - the larger clients and limited companies are more likely to want a book-keeper, and are much more likely to value your services.
2. Learn whats goes on under the bonnet - you will be of much more value if you know the implications of what you are doing when you input data and learn about prepayments, accruals, stock adjustments etc.
3. Software - its up to you to choose what you offer, are you going to specialise in one thing or be an all rounder, Xero, QBO, Sage, Sage One, Freeagent as well as Receipt bank, Autoentry etc they all do different things for different people at different prices but they all do it differently. Goes without saying that if you are competent in them all you have more to offer.
4. Pricing - have you thought about offering a fixed monthly price, if you charge by the hour you will be limited by time, and as you introduce efficiencies in the processes the client will benefit not you

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Replying to NH:
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By Trainingday
03rd Jul 2020 08:57

Thanks for the reply. You make a good point in regards to size of the businesses that I carry out work for, but I don’t have any experience with limited companies and think I’d be best to wait until I have gained that experience first.
I use accrual/prepayments in my current job albeit rarely as we don’t have a great deal of bills that require them postings but I am familiar with that concept and do understand it.
Sage 50 is my most proficient software as that’s the one I use at work, but would definitely look at getting proficient in Xero as that seems quite popular with companies.
I like the idea of charging a fixed rate, that is something I will definitely think about going forward.

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Replying to Trainingday:
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By bendybod
07th Jul 2020 10:16

At a basic bookkeeping level, there is no difference between a sole trader and a limited company. Many small businesses operate as limited companies because of (possibly historic) tax efficiencies rather than because they're in any way complicated.
I would say don't limit yourself by saying you don't have the experience to do them when in 90 odd percent of cases they will be no different and if you are feeding in to an accountant to do the final accounts then you will come to understand the very subtle differences very quickly.
You talk about Sage but, in my experience, very few smaller companies / businesses use Sage anymore (I personally believe this is somewhere where AAT are behind the curve in teaching Sage processing still). I would say do Xero's and QuickBooks' free training and get yourself certified for those because I can't remember the last time a new client came to me and said they were using Sage.

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boxfile
By spilly
03rd Jul 2020 07:45

Have you looked at the AAT forums? There may be similar questions already asked, so you can see the advice given to them.

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Replying to spilly:
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By Trainingday
03rd Jul 2020 08:45

Yeah, I’ve looked on there but the posts I saw were a few years old and had different prices on each one. All valuable info, just wanted something specific to my situation.

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By Matrix
03rd Jul 2020 08:54

I would check with your institute if you can offer VAT returns and payroll services if you are only allowed to do bookkeeping. If you don’t have a PC you will need to register with HMRC for AML.

There are loads of useful threads on starting up on here if you do a search.

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Replying to Matrix:
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By Trainingday
03rd Jul 2020 09:00

Thanks for the reply.
So with AAT Level 3, you can offer up to 5 services, which include VAT and payroll. I would most definitely avoid advising on tax or anything like that.
I’ll have a search for some start up threads, thanks again.

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By Michael Davies
07th Jul 2020 09:54

£15 an hour,you are having a laugh.Down South a cleaner charges that.£25 plus is reasonable.

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Replying to Michael Davies:
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By Trainingday
07th Jul 2020 10:13

Thanks for the reply Michael.
I’m in the midlands so not sure how much of a difference that makes, most things seem to be more pricey in the south. I’ll have to have a look at what some small local firms are charging and go from there, obviously I’m not as experienced as they will be so my price will have to be slightly less, but I think that’ll be a good reference point to start from.

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By Michael Davies
07th Jul 2020 09:54

£15 an hour,you are having a laugh.Down South a cleaner charges that.£25 plus is reasonable.

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By pauljohnston
07th Jul 2020 10:20

I would suggest that you could do better at charging for a job. Hourly sounds nice but you cant agree up front and that's where the problem arises. "How much"

I would suggest you specify what you will do for each new client and also tell them what you expect from them. Finally put a further note that if the client does not follow your expectations that the fee will go up and when you are in that situation you stop and agree the increased fee. Otherwise you will be working overnight to meet deadlines and have poor payers. Get a monthly payment on each job

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Replying to pauljohnston:
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By Trainingday
07th Jul 2020 12:41

Thanks for the reply. Yeah I think that is what I’ll do, think someone else suggested it as well, plus it will definitely cause less problems like you said. Thanks for the advice, I will definitely take what you said on board!

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By mikebrooks
07th Jul 2020 12:29

I won’t comment on pricing (sorry!) but I understand and respect that you want to stick to those things where you have experience. However, it’s important (IMO) to distinguish between experience and competence. Plenty of people claiming “x” years experience actually have 1 year’s experience “x” times over. As long as you “know what you don’t know”, and are very selective with sources when seeking advice or checking web articles, you should gain skills and knowledge in new areas quite quickly. (Think CJRS, SEISS, etc.) Good luck!

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Replying to mikebrooks:
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By Trainingday
07th Jul 2020 12:45

Thanks for the reply.
What you’ve said makes sense and is definitely my way of thinking, I don’t see any benefit in me taking on a client who I don’t feel I could do a good and competent job for. Thanks again for the advice, much appreciated!

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