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What should I charge for unlimited advice and support ?

What should I charge for unlimited advice and...

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I met a potential client today and they mainly deal with property maintenance, Turnover is round 100K.   Profit around 40K

After 12 years as a sole trader this month they became a limited company and also have registered for VAT now.  They used to use an accountant for payroll but now will do it themselves.  The company will also carry out the book-keeping and file the VAT Returns

They have also purchased some accounting software which they are struggling to use.

All they require is CT, Annual Accounts and Personal Tax Return (one director) plus unlimited help/advice

While I probably quote around £100 per month for the CT, Annual Accounts and Personal Tax Return.  My problem how to estimate the unlimited help/advice.  They would also want to know ways of cutting tax.

It is a learning curve for them especially in the first one year.  I don't mind giving the occasional free advice but think I could end up spending a lot of time with them on questions, advice and training on software etc

I probably need to add a buffer for ad-hoc advice etc but how much ? Any suggestions how to set a fair price would be welcomed.  

Replies (9)

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By chicken farmer
22nd Jul 2014 07:24

Hourly rate, surely?

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By ShirleyM
22nd Jul 2014 07:36

Have they asked for 'unlimited help/advice'?

If so, then it is rather unquantifiable. Your guess of how much time will be needed can only be a stab in the dark where a new client is concerned.

Maybe include 2 hrs per month initially, with a clause to say that the support fee will be reviewed monthly? The support needed should tail off if they are taking your advice on board. If you really want the client and they are committed to a fixed fee quotation then you may have to take a punt that they won't abuse the included support or unreasonably expect you to be at their beck & call.

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By petersaxton
22nd Jul 2014 07:37

Hourly rate

Otherwise they will have you spending 100s of hours on them and they wont see any incentive to improve.

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By pauld
22nd Jul 2014 09:02

Accounting software

If they have just become limited and are doing the bookkeeping themselves on accounting software, I would be worried of the state of the records as they are likely to post a lot of transactions incorrectly and you could spend hours trying to sort out. This may be why they are after a price for unlimited support as you could end up redoing a lot of the bookkeeping and wasting a lot of time.

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Stepurhan
By stepurhan
22nd Jul 2014 09:31

Alarm bells

They have taken everything in-house, and are already struggling with their new accounts software. There is no way you can offer a fixed fee on this. Do so, and you will find yourself being asked to give A* service for an F return. Simply state that, with so many changes this year, you cannot offer a fixed fee now, but will look at one next year depending on developments.

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Man of Kent
By Kent accountant
22nd Jul 2014 11:09

Cap it

I do.

Have several clients where I have a clause in the terms of business stating that I will review the (fixed) fees quarterly and amend them if necessary - depending on the amount of work required. This is for new businesses which expect to grow quickly.

This is in addition to the general terms which list the services required and then add that if additional services are required then there may be additional charges.

Unlimited advice? No way! Restrict this to straight forward queries which can be dealt with in a few minutes, anything more than this  - then charge.

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By petersaxton
22nd Jul 2014 12:56

Unlimited work

I think some new firms see this as a USP to get clients. This is why they are not around a couple of years later.

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By Alonicus
22nd Jul 2014 13:15

If you really want the client, you could quote them for three options;

1. A plain hourly rate.

2. A fixed fee which includes up to "X" hours of support & advice, with additional support chargeable at your hourly rate and X being a reasonable guess at where you think the support requirement will bottom out after, say, 6 months.

3. "Unlimited" support charged at the equivalent to 35 (or more) hours a week, on the assumption that you'll effectively be working for them full time if they think they can get away with it !

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Replying to stepurhan:
By petersaxton
22nd Jul 2014 13:18

Why?

Alonicus wrote:

If you really want the client, you could quote them for three options;

1. A plain hourly rate.

2. A fixed fee which includes up to "X" hours of support & advice, with additional support chargeable at your hourly rate and X being a reasonable guess at where you think the support requirement will bottom out after, say, 6 months.

3. "Unlimited" support charged at the equivalent to 35 (or more) hours a week, on the assumption that you'll effectively be working for them full time if they think they can get away with it !

Why would anybody choose 2 over 1 unless the rates were different?

 

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