Hourly or set rate charges?

LouiseRLouiseR Feels At HomePosts: 59Registered
Hi, I am in the process of applying to the AAT to become a MIP.

Please can anyone give a suggestion on how to charge clients, should it be per hour or a set fee? I'm thinking of charging £20.00 per hour but if someone just wants a simple tax return completing should i say £150.00?

Thanks for any advice.

Louise

Comments

  • CJWCJW New Member Posts: 10Registered
    Hi Louise,

    I will offer my personal experience so far and hopefully it is of use.

    I have been an MIP for over a year and a half, just coming up to my first twelve months of actually trading and working full time as my own business of bookkeeping and Self -Assessments etc.

    I personally started out with a few figures on paper after working out a plan of available hours (or how many hours ideally you want to work) and how much money I would 'Like' or needed to be earning to pay the bills (breakeven). This then became my basis and a guide to a realistic hourly rate. Obviously remember that you will receive payments gross, so make allowances for paying your own tax! A good rate may seem good a first but after tax may look low.

    It is always worth doing abit of research to see what other accountants in the area are changing for similar services.

    I must be honest I undervalued my fees in the first six months as I was trying to build up a client base and did not want to lose out on a potential client by providing a stupidly high price.

    I try and keep my fees fairly static , your £150 seems reasonable for a SA return but I always try to assess the volume of the work involved, i.e sales receipts and purchase invoices ect. £20.00 an hour depending on where you are in the country, I would think fair.

    I picked up a few friends and family which I found difficult to charge my 'normal' fee but I found that the recommendations and word of mouth brought new clients in which is always good.

    Hope this helps.

    If you have any other questions I will share my experience. This forum was very very useful (and still is!) when I was starting out so if I can put something back I will.

    Chris.
  • RasmitaRasmita New Member Posts: 10Registered
    I attended branch meeting about Members in Practice which was presented by Catherine Chamberlain. They have given me details on how to work out hourly rate. It is dependent on how initial annual salary you can earn. I am happy to scan copies over if you forward your e-mail address.
  • LouiseRLouiseR Feels At Home Posts: 59Registered
    Thanks alot, thats very helpful, my email address is louiserankin@btinternet.com
  • esmithesmith Settling In Nicely Posts: 18Registered
    Hi Rasmita,

    Would you be able to e-mail that file to me too??
    I am just starting to get a few more people on board which is now hopefully going to take over from my part time job so need to make sure i am covering myself.

    My email is smith.emma@btinternet.com

    Thanks

    Emma
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,069Registered
    Hi

    I'd always recommend fixed fees. That way both you and the client know what's what. Unfortunately it takes a bit of experience to be able to pitch the fee right, but once you get there it's great.

    You don't say what exactly you're going to be doing. If you're doing bookkeeping then £20 per hour is fine. If you're doing accountancy you need to think bigger ;)

    HTH :)
  • pussycat58pussycat58 Settling In Nicely Posts: 21Registered
    Hi Rasmita,

    Hope you're not going to regret that offer cos I'd like a copy too.

    like most novices i think i have underestimated my prices. My first client was referred from an acquaintance who does bookkeeping, and said he wanted his 'books doing', so i quoted what she charges for bookkeeping, only then to find out it was year end accounts and tax. Well you live and learn.

    my e-mail is trevor.clowes1@ntlworld.com so thanks in advance for the copies

    Cheers
    Josie
  • imeldabyeimeldabye Well-Known Posts: 147Registered
    Rasmita wrote: »
    I attended branch meeting about Members in Practice which was presented by Catherine Chamberlain. They have given me details on how to work out hourly rate. It is dependent on how initial annual salary you can earn. I am happy to scan copies over if you forward your e-mail address.
    Gosh you are going to regret posting! Would you mind emailing me a copy? I would be really grateful. my email is imeldabye@hotmail.com
  • MoobagMoobag Feels At Home Posts: 59Registered
    Hourly Rate
    Rasmita wrote: »
    I attended branch meeting about Members in Practice which was presented by Catherine Chamberlain. They have given me details on how to work out hourly rate. It is dependent on how initial annual salary you can earn. I am happy to scan copies over if you forward your e-mail address.

    Hi Rasmita

    I wonder if you would mind copying me details on hourly rate. My e mail is ajmaccountancy@hotmail.co.uk

    Thanks

    Michelle
  • soni2survsoni2surv New Member Posts: 13Registered
    Accountancy services Rate

    Hi Ramista,

    I know many have already requested a copy of how to work out the hourly rate but i need one too and I hope it is OK. my email is s_goubo@hotmail.com..

    Thank you so much.:thumbup1:
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,069Registered
    To avoid inundating the OP who offered to email - why doesn't the last person to receive it email the next request and so-on in a chain? E.g. Imelda -> Moog, Moog -> Soni, etc? ;)
  • pussycat58pussycat58 Settling In Nicely Posts: 21Registered
    love the idea faerie9 but someone just emialed me but i haven't had it yet.

    in the meantime i did my own costing exercise : for labour costs i took the average what people round here earn in employment for each service, then estimated fixed and variable costs etc and what hours i wanted to work and used this for the apportionment basis etc

    i chuckled to myself that i offer this service to others but hadn't done it for myself! i think like so many people i had a lead before i had done any costing.

    however i had asked my contact what she charged and my costing exercise came out the same. My problem with this client was that i thought it was bookkeeping and it turned out to be year end and tax return. however i have since managed to up the price:thumbup1:

    The message here is make sure what it is the client wants doing before you quote them!
  • PGMPGM Font Of All Knowledge Posts: 1,954Registered
    Rasmita wrote: »
    I attended branch meeting about Members in Practice which was presented by Catherine Chamberlain. They have given me details on how to work out hourly rate. It is dependent on how initial annual salary you can earn. I am happy to scan copies over if you forward your e-mail address.

    Have you got a brief description of the working, so as not need to keep emailing? cheers!
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