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New client - new quote

How would you work this out?

Partnership 2 years behind needs my services. Main partner has clearly not heard of MTD (I couldn't bear to break it to him over the phone) and is manual only. Bookkeeping probably pants. VAT return quite likely a joke. I am likely to be sent accounts from two years ago shortly. How much use they will be is debatable, but you gotta start somewhere. And then he's coming round to talk about it all. 

My thoughts on how to quote is to get statistics of number of sales and supplier invoices, number of bank statements per month, but as head honcho is not entirely focussed on the matter I don't feel I can rely on anything he tells me. If I asked him for bookkeeping data I suspect it would be a load of incomplete lists and shoeboxes full of invoices, not all of them to do with the business. I've another client who did things this way before I got him onto Xero and insisted he got a bookkeeper. Prospect is probably of same persuasion.

This is plainly a massive bookkeeping job, fraught with missing stuff, dodgy VAT returns, non- existent CIS returns etc. In the circumstances I'm tempted to say I may know a bookkeeper that contracts to him or he will have to find someone to do this on an hourly rate and I've no idea how much it will cost.  And MTD is something else after that. And I'll still have to supervise the bookkeeper to some degree.

I'm not desperate for this work, but he seems a nice chap. On the other hand, I'm desperate to get paid for my time from now on.  Both the bookkeeper and I would have to invoice time in advance and see how we go. I wouldn't want to do fixed fees until I could see some semblance of order.

How do you quote for these characters? What criteria would you use apart from an hourly rate? And of course everything up front. Of course he might say no way Jose, in which case I don't want to waste too much time agonising.


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12th Mar 2019 22:28

The key to this is to get sufficient information in advance of the meeting to determine whether it is worth having a meeting.

You could do this by asking the questions you have already suggested - how many sales invoices, how many transactions through the bank etc.

The co-operation you get, the speed and accuracy of response will be telling. The prospect who says they haven’t got time for all that argy-bargy is one that is probably not worth courting.

They are in a bit of a mess for a reason. Are they innocent or culpable? If it’s the latter you need to make sure that the fee is worth the headache that will follow.

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By Matrix
13th Mar 2019 06:16

Mark Wickersham has an article/free download on pricing bookkeeping if you are into that kind of thing.

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13th Mar 2019 09:26

Fixed fee is a mugs game for these types of clients. I would just do it on a timed basis, and quote a generous amount of time to do the job as a "guide", and state you will advise the client if you get close to the top end of that guide.

once you have some idea you can say "if its well controlled we may be able to do it for X ongoing, and move to a fixed fee etc BUT its currently a mess so its going to take longer"

I would bill some upfront, and some on completion, but your call on that. If it drags out, certainly a bill at the end of each month.

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13th Mar 2019 12:37

You are making a lot of assumptions, which may or may not turn out to be true.

You say they keep manual records. I would ask to look at those first and see what stage they are taken to, and how easy it will be to construct a TB from them.

Your idea of asking for the number of sales and supplier invoices and number of bank statements per month etc. is assuming that the book-keeping will need to be redone from scratch. It may indeed, but I would wait and see, and at this stage make fewer guesses and assumptions than you seem to be.

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13th Mar 2019 12:47

I would get the books in and maybe do the first 6 months to see how long it takes you and use that as the basis for rest of the work and get the fee agreed for the whole lot then.

Will technology help you at all, could you send all the invoices to RB etc to sort out upload bank statements into auto entry etc

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14th Mar 2019 12:12

Think of a (suitable) price and then double it. These kind of shithouse clients slowly suck the life out of you and your staff so either walk away now or make it really worth your while.

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14th Mar 2019 20:26

Just to let you know I've met Mr Bloggs and he is even nicer than I thought. I have given a higher quote than previous accountant's annual fee for year 1 and used Glenn's idea of doing 6 months worth of work for half the fee before getting back in touch to say whether that's OK. And I've got a few weeks to think about how to start training Mrs Bloggs to get a quarter's worth of data on Xero in time for MTD starting May 1st.
What could possibly go wrong? (lots I'm sure.)
Still, I'd like to thank you experts for helping me keep my nerve.

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19th Mar 2019 10:48

I dont agree "Fixed fee is a mugs game for these types of clients". I was a mug now I price large if the job is unknown, most clients accept this because of the certainty.

So you have two years of incomplete records and you must have an idea as to the turnover. So would £5000 pa be too expensive - a £10,000 fee?

I am not suggesting that these are the correct figures but look at it from the Partnership point of view. £10000 is just over £833 per month for 12 months

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19th Mar 2019 10:56

If you don't need the work why bother? Alternatively as someone else has said do a quick estimate then double it.

In my experience these clients are more trouble than they are worth, let someone else deal with it.

There is a reason they are in a mess and it's usually because they are sloppy and don't think keeping records properly is important. Also it is likely they want the cheapest accountant possible.

Either way not worth it unless you get decent fees.

I would have an honest conversation with them and tell them the consequences for them of not keeping proper records and filing incorrect returns at HMRC.

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By Nickg
19th Mar 2019 11:04

Also consider the cost of allocating this time to this assignment that possibly could be used more profitable elsewhere with your existing clients. You do not want to lose good clients due to a delay on your part because you are working on a time dragon.

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22nd Mar 2019 11:45

As I am not desparate for business, hourly rate only and monthly or quarterly billing. With a promise as to provide a quote going forward after a few quarters/year and advice on how to improve records to minimise this.

I don't mind doing charity work but only for charities!

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25th Mar 2019 10:21

Step one: go and see the potential client at their place of work, and review the books as part of the process. This will give you a fair idea of the amount of work involved.

Step two: consider whether the client fits your client profile.

Step three: quote to get them up to date based on the knowledge you gained in step one, and add a lot of caveats.

Then do the work and see whether your quote was anywhere near the mark. After a few years you'll learn to get pretty close. If the time is getting out of control then inform them.

If you haven't got a book keeper on hand to get most of the work done then your costs will be pretty high, consider this before quoting.

I never compete on price- and potential clients need to be aware you will not be the cheapest.

I actually don't mind this sort of client as I like to train them to do things so that after a few years the time spent doing the donkey work is much lower and we can spend more time on the fun planning stuff and making sure their business is running smoothly.

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