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Second opinion on fees

Client found my quote too high. Justified?

Hi there, 

I have recently received a request for a quote for my services to a client to provide the following services: 

  • Partnership Accounts and Tax Return
  • 2 x Self Assessments
  • Bookkeeping (1050 invoices per year)
  • Quarterly VAT
  • Payroll for 5 employees

I quoted £250 per month, which the client found too high. The client turns over £75k-100k p.a. 

Was my fee quoted too high? I am based South London, and do not charge VAT. 

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10th Feb 2019 17:05

What kind of business. I’m struggling to match the volume of invoices with the turnover.

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to andy.partridge
10th Feb 2019 18:02

Oh I forgot, you’re anonymous, you can’t reply or your cover is blown. What a waste of my time, and yours.

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10th Feb 2019 21:32

what does his 5 staff do that only generates £75k income

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to Glennzy
10th Feb 2019 22:44

Unfortunately Glenn we will never know.

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11th Feb 2019 07:32

Why is this difficult? If client can get the same service (with the same value add) for less, then you will lose the client. Otherwise, even though your fee is 4% of client's turnover, you won't - although, unless you are paid better than client's staff or you are not being told the full facts, it's hard to see that business lasting very long, and you might not have the client for long.

Btw, you do know that VAT depends on your turnover, not your client's, don't you?

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By SXGuy
to Tax Dragon
11th Feb 2019 08:27

Quote:

Btw, you do know that VAT depends on your turnover, not your client's, don't you?

Don't see how thats relevant at all. You have no idea what the ops turnover is.

Personally I wouldn't charge £250 a month, I'd have maybe gone for £200. But that's me.

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By zebaa
11th Feb 2019 09:05

Too high for a £100 PA t/o, in my opinion. I think you were always on a looser with this quote. Is this your target market?

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to zebaa
11th Feb 2019 09:54

Looser than what?

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By Mr_awol
11th Feb 2019 10:07

Depending on the client records/business, and numerous other unknown quantities, you might be £50 per month too high.

As you don't charge VAT I assume you are a below the registration threshold and therefore am guessing that you are a one (wo)man band working from home. As such, people might expect you to be lower still, given the type of competitor you are comparable with.

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11th Feb 2019 11:36

As you are based in South London I would have thought that your fee quote was perfectly reasonable.

Client obviously going to struggle to make money so if he is not happy and watching the pennies suggest he goes elsewhere. Then spend your time getting better quality clients who value your service.

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12th Feb 2019 17:03

That looks about what I would quote. If the client thinks that's too high, let him try and source it cheaper. He might possibly be able to do so, but that's not necessarily a reason to drop your price.

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By ChrisKH
15th Feb 2019 10:00

You can analyse the hell out of it (I looked at the 4% of minimum turnover as well) but it all boils down to how long you are spending on it and how much the client is prepared to pay.

If the client is in a low margin business, is that a good reason to charge less? What would your competitors be charging? You might want to discount it slightly and tell them you will discount it for the first year and you will review in 12 months. If the client's only interest is cost and they are having difficulty generating turnover (a badly positioned café or tea-room with low pay zero contract staff springs to mind) do you want that business in the long term?

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15th Feb 2019 10:35

I wouldn't take on a client wanting full bookkeeping on top of the usual for anything less than £3K PA, unless their "bookkeeping" requirements were simple enough to tot up in an hour or two every three months.

I don't see how their turnover is relevant, I'm not obliged to make myself affordable to everyone, if they can't afford it then they should keep their own books until they can.

My fee is based on how long it'll take me and if they want to [***] about issuing a thousand £10-ish invoices then they can add them up themselves.

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to Duggimon
15th Feb 2019 11:12

I largely agree with Duggimon.

The client's turnover/size, and yours, are irrelevant. If the fee you are charging doesn't represent a great RoI for the client, why should they like it? And if an alternative doesn't represent a great RoI for you, why should you like it?

I just wouldn't base a fee on how long the work takes me. Time might come into my estimate of my delivery cost and thus my RoI, but I'd use my RoI to decide whether or not to quote, and the client's perceived value of the proposed work to set the fee.

David Winch
Sales, Marketing and Pricing Consultant
Cambridge

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15th Feb 2019 13:05

I worked mine out at
100 for accounts
4 hours per mth bookkeeping at £40 = 160
payroll 5 x9 =45

total £305+vat

tell him to do the bookkeeping himself and save money... or get a bookkeeper on £20/ hr and you do the year end.

There Is no money in bookkeeping even at £40/hr.. its a loss leader - try and avoid this

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15th Feb 2019 14:50

As a bookkeeper, I would be quoting for the invoicing (is it sales or purchases or a combination?) & doing the VAT & the payroll (assuming it's a monthly payroll, I don't do weekly) but not the accounts or tax return or self-assessments though I would, of course, make all the data fully reconciled & clean ready for the accountant. I am in Bedfordshire (not on London rates) & I would be asking for between £175 & £200 a month just for that. I agree with other responders, I'd be training up his staff or himself to do more & then do an hour or so a month retainer to monitor & overview. Depends on what kind of clients you want. I have learned the hard way, if I don't value myself, clients certainly won't. But your client, your call.

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