Share this content
0
1707

Pricing our services

Pricing models & systems.

Didn't find your answer?

Search AccountingWEB

Seen a few threads on here recently along the lines ‘Am I too cheap’ ‘Potential new client says I’m too expensive. Am I?’ etc. The second one started mentioning pricing models & systems like AVN times up, pricinginthecloud.com and goproposal.

At present we work on charge out rates but often have under recovery. Additionally if (when?) MTD happens we will probably need to review our prices over the next year or so, possibly for the majority of clients.

Wondering what members use to set / review prices themselves. One of the above systems? Another system?  Finger in the wind? Last year + 5%? Good & bad experiences etc. would be welcome & I believe of interest to many on here. Personally, at this stage, not interested in the 'upselling' aspects. More interested in reviewing our prices for the work we currently do & setting a standard for the future.

Replies

Please login or register to join the discussion.

avatar
09th Jun 2017 12:27

Ltd co accts £600+vat
CT600 £100+vat
Personal tax £110+vat
Bookkeeping £30+vat/hr

Thanks (0)
avatar
to practiceperson
13th Jun 2017 12:59

Thanks, but do you not vary the fee level as a result of size / complexity of the job?

Thanks (0)
09th Jun 2017 16:52

If you charge based on hourly rates and have under recovery then either:
1. Your fees are too low
2.Your hourly rates are too high
or
3.Work is completed inefficiently

For us:

Clients are quoted fixed fees - no split between accs/tax/payroll, client decides on the services required, fee calculated.

Periodically I will review time spent on work to see if we are recovering at the 'required' internal hourly rates.

If the recovery rate is too low then fees are increased.

5% annual increase for what? Fees are increased if scope of work increases or as above its taking longer that previously/anticipated.

Thanks (0)
avatar
to Kent accountant
09th Jun 2017 20:31

5% increase for inflation= too right. I bet the employees want annual pay rises. The cost of loo roll has gone up since Brexit.

Thanks (0)
By DJKL
to newstarter01
11th Jun 2017 20:55

That is because we are now all in the ****

Thanks (0)
avatar
to Kent accountant
13th Jun 2017 12:58

Kent accountant wrote:

Clients are quoted fixed fees - no split between accs/tax/payroll, client decides on the services required, fee calculated.

Thanks, this is probably the nub of what I am trying to get at. How do you calculate this fee?
Thanks (0)
to Wanderer
13th Jun 2017 21:32

We have fixed fees for payroll per head, bookkeeping £x for X nos of transactions. Plus we have a sliding scale charge for annual accounts and CT comp based on turnover.

When quoting for a client in a meeting or over the phone I input information into a template spreadsheet which provides a total annual/monthly fee.

There are 'adjustment' fields to allow for reducing/increasing fees if necessary eg high maintenance client - add £250 etc.

Its not foolproof but at least there is an element of science and consistency with it rather than the guestimate approach I used before.

Before using it for real I sense checked it on fees I was charging to clients already. After a few tweaks it was ready for use.

Thanks (0)
avatar
By chatman
to Kent accountant
14th Jun 2017 09:21

Kent accountant wrote:
bookkeeping £x for X nos of transactions. Plus we have a sliding scale charge for annual accounts and CT comp based on turnover

Hi Kent - Would you mind sharing your bookkeeping fee per transaction?

Also, for annual accounts and CT, do you find the amount of work involved is more closely related to turnover or to number of transactions? I find that, during the review stage, number of transactions affects the amount of time I take, more than turnover does, so I am thinking of basing quotes on turnover for new clients (unless they give me access to their accounting records) and number of transactions for existing ones.

Thanks (0)
avatar
13th Jun 2017 10:12

Practiceperson's rates are low in my opinion. If you use 3 x cost for employees wages a bookeeper costs about £15 per hour and a tax senior a fair bit more £25 per hour.

Thanks (1)
avatar
to pauljohnston
13th Jun 2017 13:06

Agree too low. I work on 3.5x as one method.
Other is what the market bears.
In one of the accounting magaizine there was a fee study done. Had low median and high. Used it and pitched myself at the median with an inclination to high as my service levels are high. Clients happy, me happy.

For Ltd YE straight forward its £750 minimum.
Tax return £150 - simple only
etc.

Cannot recall the magazine. Think it was "Accountancy" a CCH publication.

Also had a spreadsheet based method of working out rates. Still have it and happy to forward with a PM.

Thanks (0)
avatar
13th Jun 2017 15:11

If a service you provide is truly a commodity - i.e. There is absolutely nothing you 'bring to the party' that differentiates you from any of your competitors - then all you can do is charge the lowest rate in the market for the slowest delivery.

If the words, "Ah, but..." are on your lips, then you aren't providing a commodity service, so you can charge whatever you like and bring bucket-loads of 'personal value' to the party.

In your conversation with a prospective client, get them to tell you about the difference it will make to their business when someone fixes the issue they can't fix by themselves. Mentally decide (to within an order of magnitude) what it will cost you to deliver that service and quote a price that gives both of you approximately the same percentage RoI, as a fixed price.

This is known as value-based pricing and is a far fairer way of pricing - being non-adversarial and promoting 'win-win' - than charging for your time. It has the added advantages of rewarding you for finding ways to work smarter without ripping off your client, and rewards you for getting ever better at doing your job.

David Winch
Sales & Marketing Consultant, Cambridge

Thanks (2)
By DJKL
to David Winch
13th Jun 2017 15:35

David, you better watch out, you will be roped into the Brexit negotiations with such a balanced approach.

In effect seems to be using Game Theory and a Nash equilibrium, if I have understood the John Nash biography I read.(Which I very possibly have not)

Thanks (1)
13th Jun 2017 16:34

Market rate is where you need to be I guess. Many accountants now publish there prices with a bronze, silver and gold style offering. Typically Bronze is from £125, Silver from £250 and Gold is £400+ per month.

The services you will get for the above vary from practice to practice but that seems to be a fair market rate for a standard company (will include a cloud subscription)

I have looked at some of the pricing tools on the market and whilst they are very thorough in that they highlight and charge for every little task the end price still has to be accepted by the client. I do tend to bundle extras in like annual returns etc which maybe you could charge extra for but if your final price is way above market rate I cannot see how you would get many proposals accepted.

Thanks (0)
By DJKL
to Glennzy
13th Jun 2017 17:00

Glennzy wrote:

Many accountants now publish there prices with a bronze, silver and gold style offering. Typically Bronze is from £125, Silver from £250 and Gold is £400+ per month.

That is depressingly like how I decide which programme to pay for at the local car wash.

I prefer to run on bespoke pricing ,client by client, then again only being part time I have far fewer clients to manage than most.

Maybe if I needed the fees to live on/pay the bills I would more embrace standard pricing and packages, but I don't, I base the fees on time spent and put a lot of effort into improving client records/ client procedures to keep the time based fees low.

I am also willing to gamble spending extra unpaid hours in the early years to smooth the record keeping process for later years which seems to have paid dividends as the only client lost in nine years has been one who ceased trading.

Thanks (0)
to DJKL
15th Jun 2017 14:09

they are very much "prices from" so you then tailor them upwards to suit your client needs, so will probably come back to similar levels to your bespoke pricing, its just a starting point for minimum level service.

I suppose this way of working is wash over from the software influences we now have within the industry and the subscription based service approach which is the norm.

I agree with you in the time investment to get things set up correctly. I know a lot of the guru style advisers recommend to charge for setup of Xero but I think its just time well invested over the life time of the client.

Thanks (0)
avatar
By chatman
15th Jun 2017 17:50

Glennzy wrote:
I know a lot of the guru style advisers recommend to charge for setup of Xero but I think its just time well invested over the life time of the client.

I agree. What would you do if they decided they didn't want that particular service? You would have to waste hours every month with a sub-pay accounting system. You're better off making it a free bonus they get for signing up with you.

Thanks (0)
Share this content