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What fees could a full time employee handle

What sort of client portfolio should i expert a ful time accountant to manage

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When recruiting a member of staff what sort of fees would you expect them to be able to manage? 

I know what I look after but then I'm also managing the business etc and if I'm honest i don't work 100% all the time. 

So what sort of size portfolio would you expect a full time qualified accountant to manage? 

I know it would depend on the size and type of clients it would be but it would be interesting to know the sort or order of magnitude. 

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By Mr_awol
08th May 2018 22:23

Depends on what you mean. Are you expecting them to complete the jobs themselves or manage a portfolio with acts prep and/or payroll staff below them?

Anywhere between £80k and £240k I suppose, depending on the above

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Hallerud at Easter
By DJKL
08th May 2018 22:48

Minimum three times their salary cost in GRF, if support structure, assistants, outsource bits of the fees (like payroll) to other team of staff a fair bit more.

You also need to consider what part of fee total is covered by partner etc reviews/client meetings done above the accountant, unless your firm lets stuff out the door without partner level review/partner client contact, which imho is not a good idea unless you are very happy with level of supervision by say a manager in place over the accountant in which case you need to consider their part of the fees instead.

When I first started I reported to an audit senior (qualified), who reported to either an assistant manager or manager, if assistant manager they reported to a manager who reported to the partner; how much reviewing at each stage took place would likely depend on the size of job/ client involved, in some cases work by our office was say passed to London (say we were dealing with subsidiaries of larger groups) where our files reviewed in Glasgow by our partner might well be further reviewed by another partner in London.

Even in smaller firms later nothing went out the door without a partner reviewing, they signed all accounts.

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Replying to DJKL:
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By andy.partridge
09th May 2018 10:22

DJKL wrote:

Minimum three times their salary cost in GRF

Capital letters, bold and double-underlined.

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ALISK
By atleastisoundknowledgable...
09th May 2018 08:04

Should I infer that this is your only/ first employee?
Assuming not, as Mr AWOL, 3 times salary is a good starting place, assuming that they were doing accounts prep & tax (ie not general outsourcing like bkpg & payroll), but would depend on your support structure, portfolio structure and your pricing model.

If this is your first employee & they have to do everything, then it may be considerably lower if they are doing lower charges items like the bkpg.

Further to DJKL, I have 2 jnrs and have just (6 months) employed a part-time qualified accountant in a review-type role. She also does some accounts prep & probably bills 1.5-2 x salary, but has cut my review by 90%, freeing me up for overhauling our processes, biz dev, client mgmt and a minimal amount of ‘work’. I made the decision that the investment in her salary was worth it, rather than another junior /semi-senior who would bill 3x but not free up as much of my time.

Horses for courses - what does your business need at this stage?

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By nikki_h
09th May 2018 08:17

At the moment it's me, a few hours of admin support a week and approx 15 hours self employed bookkeeper a week.

But I'm putting together a plan to buy a block of fees. I'm struggling to take on more work by myself and i can't afford an employee until i have the fees so i feel i need to take a step jump to enable me to get a qualified accountant in.

I would also get a ful time bookkeeper/admin to support the full practice.

Thank you for your responses. You are confirming my thoughts on sizes of portfolio.

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By Mr_awol
09th May 2018 14:59

Also depends not so much on the age of the employee, but when they were born.

If their date of birth ends in 1990 or higher then there's a good chance that they will be devoid of any entrepreneurial spirit, sense of responsibility or initiative and you'll be lucky if they can tie their own shoelaces without substantial assistance.

I'm apparently still 'young' (ive just googled middle-aged and apparently it doesn't until age 45) but feel very old typing the above

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Replying to Mr_awol:
By ireallyshouldknowthisbut
09th May 2018 15:43

Tsk ageist clap trap!

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Replying to ireallyshouldknowthisbut:
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By Mr_awol
10th May 2018 09:24

ireallyshouldknowthisbut wrote:

Tsk ageist clap trap!

Perhaps, but although written very much tongue in cheek it does have an underlying element of truth to it - in my experience, having spent several years as a manager and now partner.

As I say - age isn't the driver as such. Today's 25 year old just doesn't seem to 'want it' as much as myself and my colleagues did ten years ago.

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Replying to Mr_awol:
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By Maslins
10th May 2018 10:19

Mr_awol wrote:

As I say - age isn't the driver as such. Today's 25 year old just doesn't seem to 'want it' as much as myself and my colleagues did ten years ago.

I think today's 25 year old realises no matter what they do they won't be able to afford even a 1 bed flat as 40-80 year olds bought them all a few decades ago for a couple of shillings. No point in trying.

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Replying to Maslins:
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By andy.partridge
10th May 2018 10:58

Are you saying that young people are not motivated to forge a successful career because it might not result in home ownership?

Strange values.

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Replying to andy.partridge:
By mrme89
10th May 2018 11:26

What's strange?

Going to work to find that most of your salary goes on living expenses and travelling costs getting to work with little to show for your efforts is somewhat demotivating at times.

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Replying to mrme89:
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By andy.partridge
10th May 2018 12:03

'Living expenses'? I was referring to the single objective of 'home ownership' which, incidentally, is a particular ambition not necessarily shared by residents of other European countries.

But don't think that only a small proportion of salary being disposable income is a new concept. The younger generation has the benefit of extraordinarily low interest rates. High interest rates totally shafted the older generation that managed to get on the property ladder.

Each generation has its own sacrifices to make to get on, but I can't believe any young person might become dissolute because they are finding it difficult to buy a house.

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Replying to andy.partridge:
By mrme89
10th May 2018 12:21

It's not shared by residents of other comparable European countries because they have lower rental prices, lower pension age, and much higher state pension.

If you rely on a state pension in the UK, topped up by an auto enrolment pension, with no home to your name, in all likelihood you are going to be pretty poor in retirement.

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Replying to mrme89:
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By andy.partridge
10th May 2018 14:52

mrme89 wrote:

It's not shared by residents of other comparable European countries because they have lower rental prices, lower pension age, and much higher state pension.

What is your point, though? Is it really that:
a) UK residents crave home ownership because they have a low state pension?
b) When UK home ownership is apparently more difficult it means younger people fail to engage in career development?

Sorry, I don't see any connection.

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Replying to andy.partridge:
By mrme89
10th May 2018 15:12

Well the max state pension is Spain is around £25k, I believe.

As retirement, with lower rental prices, Spaniards can comfortably live.

What would our crappy state pension cover?

Home ownership means you have one less cost to think about every month when you come to retire.

Nope what I am saying is that people that work only to just about fund living expenses can find it demoralising. People that are demoralised can find it more difficult to motivate themselves.

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Replying to mrme89:
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By andy.partridge
10th May 2018 15:31

But you seem not to consider the hardships and sacrifices of the older generation to achieve whatever they have. It's a pity if you think the younger generation should be entitled or it justifies giving up.

Of course I realise that it is dispiriting for people to work hard and get little out of it. That transcends class and age. That should not demotivate an educated young person embarking on a professional career (my original response to Maslins which started our exchange). It is their ticket 'out'.

As an aside, youth unemployment in Spain is close to 45% so I don't think they have an economic model we should emulate.

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Replying to andy.partridge:
By mrme89
10th May 2018 15:40

I have not once said they should be entitled or just give up.

I'm merely stating a fact; that it is now much harder to get on the housing ladder.

You appear to think that home ownership is a status symbol. Whereas, I think it is quite important in this country for people to own their own home.

Anyway, this thread is getting unnecessarily being derailed - apologies to the OP.

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Replying to mrme89:
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By andy.partridge
10th May 2018 16:01

mrme89 wrote:

I think it is quite important in this country for people to own their own home.

Please quote where I have given the impression that home ownership is a status symbol.

I agree, your quote above is wildly off-topic.

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Replying to Maslins:
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By Sheepy306
10th May 2018 11:45

Meanwhile, in areas other than the south of England (yes there are such places), there are 1 bedroom flats for £80k, 2 bedrooms for £100k and 3 bed houses from £110k, and that's just the Midlands, it's even more affordable further north and more rural areas.
Average graduate salary around £21k at 20 years old, so presumably at least £25k-£30k by the age of 25.
Yes London is crazy and something needs to be done about it, but why people don't relocate or make other rational decisions sometimes is beyond me.

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By Michael Davies
11th May 2018 09:52

I always thought this was the crux of an accountancy business.When I was working for a large firm, I worked on the 3x formula also. One unit being my salary,plus nic ,benefits etc.Two was my other costs to the Firm,ie rent,training,secretary time etc.Three represented partner profit.Generally I worked out that the factor of number two was overstated,particularly as while I didn’t hot desk,my “working area” plus share of common areas was very small,especially during rent free periods.What was incredibly overloaded was partner profit.I had a rough idea of partner profit,and worked out that my fees alone covered one partners profit,without them having to get out of bed in the morning.I was not particularly bitter about this,it was just the way of the world.Given this I could never understand partners being reluctant to spending 50% of their time on PD;which all the marketing gurus suggested was an absolute given.

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Replying to Michael Davies:
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By Sheepy306
11th May 2018 11:07

Out of curiosity, and to get some context, where was the firm located and what was the partners profit/salary expectation? When you say large firm, do you mean top 10?
What is often overlooked is that the costs of running a city accountancy/law firm for example can be massive, so those rent, rates, secretary, finance dept, software, IT, marketing dept, entertaining, Christmas party and travel costs, amongst many other things can be far larger than people realise. A decent legal secretary for example may be £50k..
The senior partner and owner of a city law firm that I know spends about £15k per month on entertaining (including travel etc) alone.
3x salary is always what we worked on also, but I know there was a large variation on staff achieving that.

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By djn24
11th May 2018 10:01

I would say that 2.5- 3 x annual salary is a fair expectation.

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