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Quote for accounts prep

Quote for accounts prep

Just interested in some views from the esteemed community.

I was recently asked for a quote to prepare limited company accounts.  Small single director entity, around 200 transactions in the year, held on cloud accounting software.  Accounts need to be filed by the end of this month (March).

Firstly I'm a sole practitioner engaged mostly in advisory work, and I have an advisory client on the go at the moment, so I highballed the quote.  It seems other practices offered to do the work for around £300 - £400 - my quote was nowhere near that to be honest!

What would you have quoted for this work?

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05th Mar 2016 19:56

£300-400 for company accounts?
Not a chance!

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By jlsmith
05th Mar 2016 20:03

Well my thoughts exactly - but there are obviously people out there who will.  Not sure how they make money to be honest...

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05th Mar 2016 20:11

There's people on People Per Hour that will do statutory accounts and corporation tax returns for less than £100.

If a potential client is that price sensitive, it's a client I don't want.

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05th Mar 2016 20:13

Just for the accounts?

If the books are accurate & up to date, so little correction, I'd be fine with £300, plus £100 if there was a previous year to pull into my software.

I'm just quoting an existing client, with near perfect cloud books, £600 for next year for the accounts and anything else they want to contact me about, including the cloud subs.  I'll be quoting another maybe £900 as they need more hand-holding.

There is really no such thing as standard fees anymore I'm afraid, it's what you and the client are happy with.  My minimum for a company like this 5 years ago was £1,500.

EDIT: following cheekychappy's point: if I was timing my work, that £300 might be for an hour and a half's work

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06th Mar 2016 08:19

are they ever?

[quote=Paul Scholes]

If the books are accurate & up to date, so little correction,

[/quote

And how often is that the case? On a scale of Never to 10 it is always Never. They swear and declare that it is all in order but sadly they have no idea what is needed.

I had one recently who swore and declared it was so and when I told him my fee would be £1200 plus VAT he sad he had a quote of £600 including VAT. Oddly I got the work and £1200 was about right given the mess that there was. It isn't quite finished yet as there are two bits of information still needed. He has promised to let me have these over "the weekend" - that is the weekend of 13/14 February.

Always look at what the last lot charged. It won't be excessive and might still be too low but at least you know that they know what the mess ad the messing around is likely to be.

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By DJKL
07th Mar 2016 17:53

Converting sinners

Joe Soap]</p> <p>[quote=Paul Scholes wrote:

If the books are accurate & up to date, so little correction,

[/quote

And how often is that the case? On a scale of Never to 10 it is always Never. They swear and declare that it is all in order but sadly they have no idea what is needed.

I had one recently who swore and declared it was so and when I told him my fee would be £1200 plus VAT he sad he had a quote of £600 including VAT. Oddly I got the work and £1200 was about right given the mess that there was. It isn't quite finished yet as there are two bits of information still needed. He has promised to let me have these over "the weekend" - that is the weekend of 13/14 February.

Always look at what the last lot charged. It won't be excessive and might still be too low but at least you know that they know what the mess ad the messing around is likely to be.

That is not  always the case,  some clients can deliver as promised, they are like puppies in that if well trained from the outset they can do as they are told.  Sometimes even just getting invoices filed as suits one can save time- a stitch in time saves nine often does apply.

And prior firms can sometimes be undercut,  a fair few years ago we took over a job from Deloittes where they had been charging about £5,750, we costed it and could do for nearer £2,500;  (partnership accounts-four partners so five in total returns) ,no idea if that still holds true as no big firm acquisitions since though do currently have a mid tier firm job starting to look promising and I am pretty sure I can do for much less than incumbent.

Very often, if the time is spent during years 1 and 2 with the client, showing what is needed and why, it pays dividends re efficiencies re years 3 onwards, I have a few where I have reaped the benefit of the front end time over 6+ years thereafter with the added bonus that I do not need to guddle around with the bag job incomplete records of my youth.

 

 

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05th Mar 2016 20:13

A rush job too

Good luck to him!

They will either be working for next to nothing, or doing next to nothing, for that fee. I wouldn't want to be in either boat.

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05th Mar 2016 21:25

Not a chance

Company Accounts will start with us from £600.00 providing they are in pretty much perfect condition I do know accountants who charge around £450.00 for company accountants then outsource to India.

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By jlsmith
05th Mar 2016 22:10

Thanks, do appreciate the feedback.  Paul, I don't quite understand the bearing of your point as to why your fees have come down so much from 5 years ago?

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By qhas
05th Mar 2016 22:34

Competing

jlsmith wrote:

Thanks, do appreciate the feedback.  Paul, I don't quite understand the bearing of your point as to why your fees have come down so much from 5 years ago?


with the one-man band running from the front room, not qualified, no Institute subs, no renewal of Practising Certificate, no CPD problem, no PI, no insurances of any kind et al. On the other hand if the client is happy who the hell am I to argue ?
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05th Mar 2016 22:31

I'd also like to see te breakdown of 90mins when taking into consideration quoting, letters of engagements, advice, doing the actual work, issuing drafts and finals, ad hoc emails, any meetings (in person or Skype) etc etc.

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By qhas
06th Mar 2016 12:19

And ..

cheekychappy wrote:
I'd also like to see te breakdown of 90mins when taking into consideration quoting, letters of engagements, advice, doing the actual work, issuing drafts and finals, ad hoc emails, any meetings (in person or Skype) etc etc.

MLR compliance
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By sash100
06th Mar 2016 10:12

competition

increased competition will bring prices down and this is what is happening unfortunately.

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06th Mar 2016 10:33

Just to clarify....

Having the blinkered view on life that anyone charging significantly less than you must be doing a crap job or doesn't know what they are doing, is only delaying the realisation that even the accountancy industry, and its clients, develop and move with the times.

Similarly, unlike a few years back, even clients recommended to me now have an eye on what other firms offer and this will now always be the case with cold calling clients.

For some of us, this came to a head 5ish years ago with the arrival of the internet firms offering everything, including tea & coffee for £65 pm and I was approached by one existing client, and another potential client, both asking how what I did differed from this model to justify double the fee?

So my reference above to what I regarded as a standard fee 5 years ago was to indicate that stuff changes, not only have I now lost my office and staff but I've completely changed how I do the work and, more importantly, what I expect of my clients. 

I don't know if qhas meant to be insulting or whether s/he's still in blinkers, but this one man band working from a (back) room and now (thankfully) without ACCA subs, still does CPD, still has PI cover and is probably more capable of doing a valuable job for his clients than he was 5 years ago.

Another "given" that isn't, is the belief that the majority of clients can't, and never will, be able to keep their books "accurate & up to date".  Or rather, just because Joe Soap's can't and never will, doesn't mean that my clients can't be given the right tools and shown how to do it properly, to the stage where the books I get from all of my clients are, on a scale of never to 10, somewhere between 8 & 10.

If you think I'm living on another planet then can I suggest that you look to join me before digital accounting hits in a couple of years time.

The OP asked about a quote to do a set of accounts, there was nothing about, quotes (do you really charge for these?) letters of engagement, professional clearance, etc etc, it was to do a set of accounts by the end of the month and so, based on a couple of similar sized clients, with accurate and up to date cloud accounts, where it takes me between 1 and 2 hours to have a set of accounts & CT return ready I felt that £300 would be reasonable for me.

 

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By qhas
06th Mar 2016 12:59

No insult intended
I was simply stating facts as I see them. If what you are saying is that you take the accounts provided by your client as gospel and proceed then, yes, £400 is fine. Set against Cheeky's discovery of an outfit that quotes £100, your fee sounds positively exorbitant which it clearly is not for the service you are offering. Even where an audit is not required we take the precaution of proving the Balance Sheet, at least the more substantial items and the same with the P&L. This would mean calling for Source Documents regardless of whether the accounts were provided via Cloud software or a spread sheet. Our standard letter of engagement, like all others, makes reference to the standards expected of us and advises the client that they have recourse to the Institute in case of a dispute. If nothing else it compels us to do a 'bit more' than accepting the accounts provided as perfect. That takes a little more time than 1.5 hrs. As a matter in passing how do you know the accounts you are furnished with are perfect unless you take the trouble to dig (even in a cursory manner) under the surface? Does that take no time?

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06th Mar 2016 14:13

Source documents

qhas wrote:
I was simply stating facts as I see them. If what you are saying is that you take the accounts provided by your client as gospel and proceed then, yes, £400 is fine. Set against Cheeky's discovery of an outfit that quotes £100, your fee sounds positively exorbitant which it clearly is not for the service you are offering. Even where an audit is not required we take the precaution of proving the Balance Sheet, at least the more substantial items and the same with the P&L. This would mean calling for Source Documents regardless of whether the accounts were provided via Cloud software or a spread sheet. Our standard letter of engagement, like all others, makes reference to the standards expected of us and advises the client that they have recourse to the Institute in case of a dispute. If nothing else it compels us to do a 'bit more' than accepting the accounts provided as perfect. That takes a little more time than 1.5 hrs. As a matter in passing how do you know the accounts you are furnished with are perfect unless you take the trouble to dig (even in a cursory manner) under the surface? Does that take no time?

Wouldn't they be attached to the transactions in the cloud software?

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By cbp99
06th Mar 2016 13:28

Before quoting

Is the company Vat registered, if yes, cash or accruals basis, does FRS apply, are Vat returns available?

Do we have PY full accounts and does the opening TB in cloud software agree?

How many bank/cc accounts and have they been reconciled?

Any cash transactions and have they been entered?

Is there any stock/wip to consider and if so do we have a figure for it?

Have all unpaid year end trade debtors/creditors been entered in bookkeeping (ie has bookkeeping been processed on accruals basis)?

Any bad debts to provide for?

Is there an overdrawn DLA?

Have fixed assets been entered correctly, any disposals?

Deferred tax to calculate?

Any payroll to be agreed to bookkeeping records?

Any post-balance sheet events to consider?

Etc, etc

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06th Mar 2016 14:51

well said Paul
Its quite possible to take the tb in acs prep software and do a ct return in a couple of hours, some people on here have an over exagerated view of their own value

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By qhas
06th Mar 2016 18:38

You do yourself

carnmores wrote:
Its quite possible to take the tb in acs prep software and do a ct return in a couple of hours, some people on here have an over exagerated view of their own value
e
a disservice. I feel certain you could move from tb to tax return in an hour. It is not a matter of being smug. As explained before there is work to do before the accounts provided can be pronounced fit to go. If you reckon that the whole shooting match can be done in 2 hrs I am happy to go with your assessment.
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By tom123
06th Mar 2016 16:20

(smug)

refering to a point upthread - my 2015 audited company accounts only required the CT amending from my provision. (misses point of thread entirely..)

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06th Mar 2016 17:11

my clients are fine

Paul Scholes seems to think my clients can't keep their books. They can and they do but I wasn't talking about my clients - they too have been given the right tools and shown what is needed. 

I was talking about those who roll up with urgent accounts and want it all done by today for a pittance. They are the shambolic ones. Some can be trained but not all. If they want a keen fee though they have to produce the goods.

Usually they have fallen out with the previous accountant because they don't want to pay for him/her to do the work that they can't or won't do themselves

 

 

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By Glennzy
06th Mar 2016 17:27

Bigger Picture.
When I price a job now I like to think it's to do a good for the client. My that I mean there is enough built in to allow for a lot of contact during the year to deal with any reasonable requests or advice, and that a fixed fee is exactly that. Paul is correct in that if you have a decent TB you can rattle out the accounts and tax in no time. For simple jobs in Sageone you could probably do it in 30 minutes if the bookkeeping is good as it's genuine end to end software. However for me the problem is with the £300 job is that whilst they say they want a no frills approach, they are often the clients who often get in to trouble or are never off the phone during the year. The £300 for 2 hours work quickly dilutes and you end up having to charge extra or if fixed fee put it up the following year which will probably move him on. For me I don't think I could do a good job or support their business for less than £700 per year

There is a few people near me who are or advertise themselves very cheaply which I used to try and compete with but ended up with a load of head ache jobs that no body else wanted for the price they wanted to pay, and moved agent every year or so.

So yes these jobs can be done for £300 for a no frills approach but what do you do when they ask for a frill or 2.

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06th Mar 2016 18:17

It is quite difficult

to have any sort of consensus on fees at least NOT here

@OP here are so many factors involved in order to come up with pricing strategy like Glennzy , pcb99, paul scholes have already highlighted above.

I think you should do a bit research in your local market (if you have not already) and see what your competitors are charging to similar clients.

Secondly, depending on the quality of the records you must be able to ask yourself what seems to be an appropriate fee for this job.

Quote your client the fee you think is appropriate and believe in yourself as I always say 'I charge what I believe is right and no one calls me greedy'. Also, I never compete on price with others if a client wants to give peanuts,he will get monkeys.....

 

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06th Mar 2016 19:17

ghas
You have completely over egged the pudding, the accounts are the directors not yours

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By qhas
06th Mar 2016 21:31

Understood

carnmores wrote:
You have completely over egged the pudding, the accounts are the directors not yours

So the Accountants Certificate means nothing really. That would be to over egg the pudding. Makes perfect sense.
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07th Mar 2016 05:54

pricing and perception
I have had cases where client wants a basic job and provides figures on a cloud system. Last year we quoted a guy £400 plus VAT as he was adamant the figures just needed statutory layout and filing.

After setup on VT and taxfiler, carrying out MLR and engagement procedures plus a review of the final numbers at our desk and then with the client, including updating disclosures, we were ready to file.

Problem was a £200 corp tax bill which the client now wanted to disappear. Which we explained was more than "no frills" but he believed "thats what you guys do isnt it"

Which is why a minimum fee of £500 or £600 is a must in my opinion. We dont really want a no frillls approach as it devalues what we do or can do, and often leaves both parties feeling short changed.

But each to their own.

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07th Mar 2016 09:42

If you quote on the basis of time taken to only prepare the accounts, I think you are missing a trick.
When I quote jobs it is based on the time taken end to end.
It is very rare that a client wants a very basic service. What I find is that they want to pay for a very basic service, but expect to receive a platinum service.
Paul is right, the job is probably profitable doing it at £400. But it’s not going to make a decent profit. I’d resent doing the work for that sort fee.
For someone turning up less than a month before the deadline, I would make a good guess by saying that their TB is very far from perfect.
Cloud technology is sold that it makes are jobs easier and we can work much more quickly and be more proactive. But [***] data in is still [***] data. I think cloud technology is good and has merit, but the usefulness is exaggerated.

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By jlsmith
07th Mar 2016 09:17

Thanks everyone for the comments everyone, very helpful.

I simply couldn't quote a price of £300 - £400 on a job like this and make it profitable. Partly, perhaps, because I'm not as polished yet as others at knocking out accounts at high speed.  But I do think with client onboarding, covering overheads, doing the sense check of the numbers, etc. etc., I'm not personally in a position to offer at this price.  I'm happy for those who feel they can!

Thanks again

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By Mr_awol
07th Mar 2016 12:04

Call me a highball if you like
Ltd Co base cost£800Less few transactions(£200)Add cloud accounting£150Add rush job£100Total fee£850

Add a further £250 if they call themselves a 'contractor'.

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07th Mar 2016 16:36

why are you adding for cloud accounting awol

without even seeing the records

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By Mr_awol
08th Mar 2016 15:10

Limited info

carnmores wrote:

without even seeing the records

Or meeting the client, or knowing what specific software package is involved.

On seeing all the facts, adjustments to the template can be made - but on the whole, cloud accounting equates to worse software than that desktop equivalent, together with an expectation of reduced costs.  It is something I normally dread (particularly if QBOL or SAGE one are involved).

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08th Mar 2016 15:19

I see

Mr_awol wrote:

carnmores wrote:

without even seeing the records

Or meeting the client, or knowing what specific software package is involved.

On seeing all the facts, adjustments to the template can be made - but on the whole, cloud accounting equates to worse software than that desktop equivalent, together with an expectation of reduced costs.  It is something I normally dread (particularly if QBOL or SAGE one are involved).

 

I see, I hadn't realised it was an addition based on the assumption that the client would have computerised records of some sort.

I would welcome cloud software over the what the majority of my clients provide. Bags of ring binders stuffed with bank statements and invoices. I had thought your addition of fees for cloud software rather odd as I would be delighted if everyone switched tomorrow.

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07th Mar 2016 16:37

qhas

he may not want an accountants certificate , what use is it to him 

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07th Mar 2016 16:39

Accountants Certificate

Doesn't everyone want one so they can play swapsies down the pub?

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08th Mar 2016 17:47

these days a certificate is virtually worthless
Not like the good old handwritten days I was articled in ;-)

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By DJKL
08th Mar 2016 20:29

Well we had it tough

carnmores wrote:
Not like the good old handwritten days I was articled in ;-)

Well, we had it tough, launched upon the world of accountancy with a calculator, ruler , one each of the blue,red,green and black biros and a bottle of tippex, and woe betide if a biro got lost because pleading for a replacement from the stationery cupboard just might not be enough.

And then the need to use a series of ticks and symbols with the need for a Rosetta Stone to translate their meaning, followed by the nine sheets of 16 column cash that made up the ETB, each needing cast in order to eventually create a perfect balance, a thing of beauty, to be transcribed into the paper, glue and sellotape first draft accounts .

And then these were reviewed, sent for typing and then incanted across a desk to another soporific trainee; the latter usually on a really hot Friday afternoon as the sun glared into the attic office  in Bothwell Street with its sloped glass windows on both sides  akin to a greenhouse.(Why is my only recollection of Glasgow either very hot Friday afternoons  or being sent out in a blizzard on the Broadmeadows industrial estate  in Dumbarton to physically verify the existence of vehicles for the client's fixed asset register with the sleet making the schedules soggy and difficult to tick?)

Still, it could have been worse, a previous senior partner used to tell stories of breaking up furniture  to feed an open fire during his apprenticeship in the early 1960s.

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09th Mar 2016 10:58

LuXury!= DJKL?

As Edith Evans didn't quite say

"A Calculatorr ?"

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11th Mar 2016 18:09

A Calculator?...you were lucky

I can remember having to book time in a book for the first one of those the firm got, mid 70s I think and £150, we were only allowed a max of 20 mins, or less if a Partner wanted it.

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By DJKL
11th Mar 2016 20:03

Step up from an abacus

Paul Scholes wrote:

I can remember having to book time in a book for the first one of those the firm got, mid 70s I think and £150, we were only allowed a max of 20 mins, or less if a Partner wanted it.

But what about a comptometer? We had a few adding machines around in 1985 and I believe the staff who had previously exclusively operated them had not been gone that long by 1985.

Our computers in 1985 were kept in a glass screened long narrow area, the first time I got in there (in fact I think the only time I ever got in there) was helping with some cashflow figures using Lotus 123. I think by 1987 Auditman software had appeared in the office but I did not get to use it. I had to wait until 1990 before I got the first machine at work on my desk, an Olivetti 286,.

It was a massive leap from my first ever personal computer (I think late 1970s/early 1980s) which was a Dragon (32 bit I think- Welsh company, I think they went bust) with a cassette player for programmes that I had painfully keyed in for space invaders etc, but usually did not work properly because I had missed a piece of typing.

Not sure if still there but Chambers Street Museum in Edinburgh had a 20th century technology display split by decades, I took the children there in the early noughties; it is quite scary seeing all the objects ,from the 1940s onward , that we had in our home from the 1960s onward , and they were all now classed as museum pieces.

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11th Mar 2016 18:26

Computer

I remember in the early 1980s I was doing work for Peat Marwick on Polish debts. We'd hired some office near their main offices.

One day somebody carried a computer into the offices and it caused quite a stir!

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11th Mar 2016 21:40

Comptometers...............

There is no point in typing my thoughts on the individuals who operated them as there is moderator who reads all posts.......

But actually it always worried me that all they did was press the buttons and put a tick at the bottom of the page. Did we have any idea as to whether they actually did add it up?

er....maybe that applies to auditing........

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By DJKL
11th Mar 2016 21:55

Auditing- do they do any?

Joe Soap wrote:

er....maybe that applies to auditing........

On the plus side some transactions were tested (or at least marked as tested). Up to about 6 years ago we had a reasonable size national firm as our auditors, the staff member (just one, we are not that big) spent most of her time getting her lead schedules completed from my workings/accounts file (all balance sheet items had schedules/ supporting analysis I had done) and hardly checked anything ,seemed to be about 4 leases out of about 120 leases on the income side.

The idea of substantive testing appeared to have been forgotten, the laptop with its all singing and dancing audit programme took the strain; in effect an audit nearly untouched by human hand but I am sure with fantastic paperwork on file re its planning.

At least we now save over £6,000 or so a year.

 

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12th Mar 2016 02:50

In the mid 80s

In a company I worked at we had a very small computer area. A photographer came round to take some photos for some brochure and they wanted to take some photos of somebody using the computer. The usual person was asked to sit at the computer and do some work. After a few minutes the photographer decided they didn't want any photos of her and could a more attractive girl who had never used a computer in her life sit at the computer to be photographed.

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12th Mar 2016 19:27

i remember the comptometer room up 4 xxxxxy flights of stairs

in 1978 a client in Tonbridge bought a computer just for doing the wages it cost £20,000 then and was given the job of auditing it.....................

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