Whats best 100 small clients or 10 big ones?

What would you rather have?

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My general philosophy in practice has always been that I would rather have a larger number of smaller clients as these are generally easier to manage, than a smaller number of larger clients that take up a lot of time.

Recently however we have taken on a group of clients from a practice with the complete opposite philosophy, I like the large fees (who wouldnt) but we now have extra staff to manage them and I have to wonder if one or two of the clients ceased trading where that would leave us, and on top of that the demands on my time have increased.

What is your choice?

Replies (16)

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By Justin Bryant
22nd Nov 2023 11:30

I have always been a big fan of big jobs (unless the latter hit the former).

Thanks (6)
Slim
By Slim
22nd Nov 2023 11:33

As ever there is a balance, I couldn't handle 400 £250 tax returns but likewise I wouldn't want so few clients as that would be risky, that said I prefer larger fees and fewer clients.

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By rmillaree
22nd Nov 2023 11:44

it depends on fe structure all that matters it what you earn per hour

big clients that are no hassle are obviously less hassle - but small clients can give you scope for earning great "fixed fee" income" if you have good ssytems in place and they are nota nightmare.

What probably matters more is that you are getting paid right rate and that client isnt endless hassle.

I have never had issues juggling many different jobs at once - that might be an issue for some - so is suspect most peeps prefer fewer larger jobs.

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By mumpin
22nd Nov 2023 11:44

Small jobs are easy money.
Big jobs are more likely to cause unanticipated problems which its hard to get paid to resolve.

Thanks (2)
Intercity
By Mr Hankey
22nd Nov 2023 12:45

The smaller, quicker, and easier the better:

1. Less risk to profit if one leaves you

2. Less risk to profit if they annoy me & I decide to sack them off

3. Easy jobs carry much less risk of me making a mistake

4. It feels good & productive to rattle through lots of work. Anything that takes me longer than a day makes me feel bored & bogged down on it

I think I can make more money too that way. For example, an old lady tax return who posts her records to me with 12 rental income lines, handful of expenses, state pension, P60 for private pension, probably takes 15 minutes to rattle out. Even if you're really generous & include time turning the computer on, printing, posting back, still wouldn't take me more than an hour, charge say £250. Working on a bigger job that took days/ weeks to complete, I would not be able to charge anywhere near £250 per hour.

Thanks (4)
Replying to Mr Hankey:
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By Roland195
22nd Nov 2023 13:18

AML Procedures skew the outcome for small clients because it is easy to be in the position that in year 1 to spend longer setting up the client (onboarding to the young people) than you do on chargeable work.

With HMRC Issues these days, it is difficult to factor these inefficiencies into smaller fees too - If your £250 fee now includes an additional hour finding that the return has been received but no processed, attempting to rectify & advise client what do do then it's not looking like such easy money.

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Replying to Roland195:
Intercity
By Mr Hankey
22nd Nov 2023 13:24

Yup, both fair points.

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Replying to Mr Hankey:
DougScott
By Dougscott
22nd Nov 2023 13:38

Mr Hankey wrote:

The smaller, quicker, and easier the better:

1. Less risk to profit if one leaves you

2. Less risk to profit if they annoy me & I decide to sack them off

3. Easy jobs carry much less risk of me making a mistake

4. It feels good & productive to rattle through lots of work. Anything that takes me longer than a day makes me feel bored & bogged down on it

I think I can make more money too that way. For example, an old lady tax return who posts her records to me with 12 rental income lines, handful of expenses, state pension, P60 for private pension, probably takes 15 minutes to rattle out. Even if you're really generous & include time turning the computer on, printing, posting back, still wouldn't take me more than an hour, charge say £250. Working on a bigger job that took days/ weeks to complete, I would not be able to charge anywhere near £250 per hour.

Sounds to me like you are exploiting old ladies.....!

Thanks (1)
Replying to Dougscott:
Intercity
By Mr Hankey
22nd Nov 2023 13:48

They see me as a dishy young man, so they do get their benefit from it too ;)

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Replying to Mr Hankey:
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By Justin Bryant
22nd Nov 2023 15:49

Especially I assume if they're called Mrs Panky.

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Replying to Dougscott:
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By Roland195
22nd Nov 2023 13:59

Dougscott wrote:

Sounds to me like you are exploiting old ladies.....!

Most of the Financial Services Industry revolves around exploiting old ladies.

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Replying to Dougscott:
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By Leywood
22nd Nov 2023 15:14

Is he? Surely its the old man, hammer and engine parable at play.

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Replying to Dougscott:
stonks
By WinterDragon
22nd Nov 2023 16:05

Dougscott wrote:

Sounds to me like you are exploiting old ladies.....!


I've sometimes questioned if we are cowboys ripping off the grannies when their returns are very straightforward but we take steps and remind ourselves of the reality.
One of the first things we say in exploratory meetings and during initial engagement is that most people do not require the services of an accountant and (I think) almost a third of taxpayers that file SA returns do so themselves without appointing an agent.
Another is that it is a free market and accountants charge differing amounts. When I need some work doing around the house then I would usually aim to get three quotes from different contractors. I've seen online firms that charge ~£150 for an SA return but I doubt they offer the same level of service by remembering the client's dogs name and asking about their children's welfare. If this level of service is what the client wants then I'm afraid our time doesn't come free (within reason).
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Replying to Mr Hankey:
Red Leader
By Red Leader
22nd Nov 2023 18:06

I agree. Also much easier to create a sort of sausage machine process, leading to greater efficiency and higher profits.

Larger clients tend to need more bespoke partner level input, often at short notice.

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Johny Fartpants Picture
By johnny fartpants
22nd Nov 2023 22:37

Definitely my preference is for a small number of bigger fees. There are several reasons for this.

Firstly, the whole AML / admin time taken is quite large for either. I have to have an engagement letter for both large and small clients, annual (AML) reviews for both, my software licence allows a certain number of clients before they put the price up etc. etc.. I don't think it is worth taking on a client if they aren't prepared to pay at least £250+VAT per annum for this reason alone, no matter how quickly I can turn around their tax returns, accounts or whatever.

Secondly, larger clients ask a small number of more difficult questions but smaller clients ask the most stupid questions and are more inclined to think that these small (but regular) queries should be answered for free. Many days I wonder where my day has gone only to realise I have spent quite a lot of time answering emails for what seem like pretty basic questions.

The most important factor for me is how well educated and how ethically sound the client is, regardless of size of business. However, in my experience, those who run large, successful businesses are usually pretty smart. Small CIS clients tend to be the least ethical and dare I say it, often are not the best educated.

As others have rightly said already, you also need enough clients to make sure you aren't too reliant on your biggest clients so a mix of some small, some large is probably the ideal.

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paddle steamer
By DJKL
23rd Nov 2023 01:11

I liked fees at the £5k mark, decent amount of work but not too complicated that I really ever needed to scratch my brain.

Of course in an ideal world I would have loved to have the brass neck to quote say £120k for the odd serious tax exercise (Nice complex demerger running at present), but not having the brain for such I can instead just pay the piper for his tune.

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