Is this too expensive?

Is this too expensive?

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I did accounts and tax return last year for a photographer client. We quoted & charged £325.00 ish.

Job was clean and easy with Excel bookkeeping.

We reviewed our fee policy and emailed our client base. This client was now going to be charged £395.00. His turnover is around £40000.

He has since moved to a firm that has charged him £150.00!!

I'm quite happy as it was always a last minute job and it had still not arrived for his 06/07 return.

I just wondered if £395.00 was too expensive for this? What would others have charged?

There was no other income.
NMP Accountant

Replies (14)

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By AnonymousUser
30th Jan 2008 14:18

James - balance sheets
In response to your question, I prepare a balance sheet when it tells me, the client or HMRC something we all might be interested in. Lots of pubs are sole traders ... I think you would agree a B/S is pretty essential for them.

I do a bank rec when I need to produce a balance sheet.

If client has invested the time in SAGE (and have done it properly) then seems rude not to do a balance sheet!

There are lots of smaller clients where a P& L account is perfectly appropriate. I will still examine the bank statements for other allowanble costs they might have forgotten and to check the revenue shows some relationship to the bank account receipts. HMRC will in the event of an enquiry so best to have looked otherwise you might look stupid later on!

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By AnonymousUser
30th Jan 2008 13:36

Actually Sounds Cheap
I would have thought that a fee of at least £500 would be reasonable. I would not lose any sleep over the loss of this client. In addition to the time spent doing the job you have to factor in costs for HRMC correspondence throughout the year, small client queries, set up on software etc. In a small practice a partner charge out rate of £100 - £150 per hour I would think is about the norm, so a half our client meeting + job review time alone should be billing at about £150.

At the end of the day, you have to assess what client's like this bring to your practice e.g. contacts with bigger clients and also the opportunity costs of spending your valuable time on this job when you have more profitable work to be completing / or gaining.

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By Marilynne
30th Jan 2008 12:10

Interesting, initally i'd have thought it was a bit pricey
but now I think I'm just far too cheap.

I think I would have charged about £200.

But then I'm new to having my own practice and find quoting the very hardest thing about it all.

What are people's chargeout rates?

What should I be aiming for?

I am ACA (qualified in 1998) in big firm for 7 years then took part time industry job to fit in with family. Started part time general practice in Cambridgeshire last year with aim to give up day job when youngest child goes to school next year.

Any advice welcome

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By Essex FCCA
30th Jan 2008 11:40

Yes and No
If it's your firm's policy to have clients with fees above a certain level or to concentrate on certain types of clients then you have made a policy decision which will always be correct.

If however, in the cold light of day, the effective charge out rate using £325 (the original charge) divided by the number of hours taken is higher than you would normally expect then perhaps you have lost out.

I wouldn't lose too much sleep over the thought of losing out to someone charging only £150. They may not be doing a very good job.
For many people, using the lower charging and no advice/service means inevitably that they are saving on accountancy costs but paying more tax than they should be. The higher tax is normally much more than the incremental accountancy fees. A fools paradise maybe.

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By carnmores
30th Jan 2008 11:38

another fool
who knows the price of evrything and the value of nothing.

set fees agreed in advance also get over charge out rate questions etc - it is also worth informing the clients of the compliance that is required

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By User deleted
30th Jan 2008 11:26

Fees
No I wouldnt say it was excessive by any means.

As accountants we can be our own worst enemies worrying far too much about fees.

Good clients will pay good fees and by that I mean to reflect a good service from a professional.

Clients that winge about fees are best of getting second rate service elsewhere.

It is not worth the hassle if you want to build a good business (as opposed to an accountancy firm/practice) wasting time on people who dont want to pay sensible fees.

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By User deleted
30th Jan 2008 11:11

Does sound reasonable
I agree the jump was probably what caused your client to look around. £150 is probably either an unqualified or someone desperate for fee income just starting out. If you have enough work on then you did absolutely the right thing.

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Me!
By nigelburge
30th Jan 2008 09:36

A perfectly reasonable fee.
Exactly what I would have charged.

If your client has gone elsewhere for £150, just be very grateful to see the back of him. Such clients certainly do not value what you do and are invariable a load of trouble.

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By AnonymousUser
30th Jan 2008 08:57

On the basis ..
that your client was a sole trader with a balance sheet prepared, my fees table says £200 - £400 depending on bookeeping. Gut feel for me would be £300 + VAT. If a limited company then £450+vat minimum.

As for £300 per hour .... good luck getting clients in the real world!

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By User deleted
30th Jan 2008 08:31

>>
Over the last couple of years, I have taken on clients who had previously been charged silly money (including £80 p/a for writing up a Simplex D, doing accounts and tax return!!).

However, I usually find that there is something quite wrong with the service they receive.

Like a client who had paid £100 even though his profit was approx. £70k - my advice has resulted in annual savings of over £7k in tax. He only changed because, erm, he couldn't find the previous accountant. I wonder why?

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By AnonymousUser
30th Jan 2008 08:28

Huh?
Fred, your friend sounds like a pretty unpleasant person.

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By User deleted
30th Jan 2008 08:07

More?
One of my colleagues has recently put his hourly rate up from £200 to £300, and he charges a lot more if the return or accounts are complicated. He puts the hourly rate in the engagement letter. He gets a lot of complaints when he sends out the invoices, but he tells the clients that they signed the engagement letter, that he charges 50% of what the big firms charge, and that he won't hesitate to litigate if they refuse to pay, AND that he will charge them £300 an hour for the time spent in litigating. This normally does the trick, he tells me!

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By MarionMorrison
29th Jan 2008 22:52

No but...
I don't think your fee levels are unreasonable. What must have looked a little dodgy from the client's point of view was that he'd agreed what was being set out as a reasonable fee and it had jumped up over 20% after a year.

He might have felt he was sucked in with a low-ball fee. He might have been affronted that his books hadn't changed, the service hadn't changed so why the sharp rise? Either might have caused the guy to look elsewhere. The justification for the rise had to be very good. If you were doing it as a means of culling clients (same turnover, 20% fewer clients) it seems to have worked.

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By User deleted
29th Jan 2008 22:15

No
I have put my rate at £400, so pretty much the same as you. However, I have given a few people this year a discount, e.g. if I knew in advance they were going to be easy, it was a quiet period, they had low turnover, or they were a really nice client!

My clients generally value what I do and don't have a problem with the fee, I often am able to save them in tax fees as I'm able to remind them of items that they can claim etc. I also make myself available to them throughout the year, so I can help them with any queries they have during the year.

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