Charging?

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I'm just starting up part time doing tax returns and accounts and would like some advise on what to charge for preparing a tax return for some subby's! Can anyone help?

burg

Charging depends very much on how you wish to run your practice the type of clients you are quoting for (which I am aware have been identified in the post), the area in which you are and the local competition.

For "subbies" the income can range quite significantly. Most of mine have income ranging between £20 - £50k.

I made the typical mistake of undervaluing myself at the outset. You need to think about what you are charging, how it will effect the type of clients you attract but, also the effect it will have on how you grow your business.

For my area (south west) I charge typically £200 - £350. depending on records etc.

T.C.

Yes that sounds about right, but different areas of the country and different areas of business demand different ways of charging, in my opinion. Some of my subbie builders have a low turnover, but I still charge at the higher end of the bracket because they do virtually no book-keeping. I would suggest that you keep your charges at a sensible level, but bear in mind that you are out there to make money too!

Monsoon

Do not price on turnover!
Price on the complexity of the job!

Based on our experience:

If a sole trader has done no bookkeeping and gives you a bag of receipts, the end bill may be £3-500 ish depending on how bad it is.

If they've done their own bookkeeping and there's not much tidying up to do, £250-300 ish give or take should cover it.

I bill bookkeeping and year end stuff separately half the time. If the bookkeeping is a significant portion of the job I will bill separately so the client can see how much their lack of records is costing them. Sometimes it makes them bring things up to speed, others are happy to pay more so they don't have to deal with it

burg

Sorry guys didn't mean to sound as though I charge by turnover alone. As the OP posed the question about 'subbies' the level of turnover is also an indicator of charge-ability.

Naughty me - I presumed that 'subbies' generally don't do bookkeeping. I know very stereotypical.

Seriously though fees on a general basis should be reflective of the quality of records, the industry and associated risk, type of business, number of transactions, turnover, risk associated with that particular client and level of guidance and help the client will need.

deanshepherd

I was thinking about this the other day. I use fixed fees and will never go back to charging by the hour but, theoretically, perhaps I should..

Here's the deal.

If you research the ethos behind fixed fee pricing (Ron Baker, Verasage, Steve Pipe, Bob Harper..) they always state that we are not charging people for 'time' (there are always the same number of hours in the day!) we are charging people for 'knowledge' and we need to price that knowledge in reference to what it is worth, not by how long it takes to produce - as once learned it can be relatively cheaply reproduced with little timecost.

However..

I would say (pre-internet) we were indeed charging people for knowledge but now I say that this knowledge is freely available to anyone who wants it. A quick google search on any tax/accounting/VAT/payroll problem will give a multitude of answers to your scenario and I am sure with sufficient time to invest in researching the variety of articles available you can always get to exactly the same answer given by your chosen accountant.

The only difference is the time it will take you.

Therefore, I believe more than ever that we are indeed selling 'time' to our clients and perhaps just as the penny is dropping that we should have been charging for 'knowledge' from the beginning, now we really should be charging for time!!

PGM

deanshepherd wrote: »

I was thinking about this the other day. I use fixed fees and will never go back to charging by the hour but, theoretically, perhaps I should..

Here's the deal.

If you research the ethos behind fixed fee pricing (Ron Baker, Verasage, Steve Pipe, Bob Harper..) they always state that we are not charging people for 'time' (there are always the same number of hours in the day!) we are charging people for 'knowledge' and we need to price that knowledge in reference to what it is worth, not by how long it takes to produce - as once learned it can be relatively cheaply reproduced with little timecost.

However..

I would say (pre-internet) we were indeed charging people for knowledge but now I say that this knowledge is freely available to anyone who wants it. A quick google search on any tax/accounting/VAT/payroll problem will give a multitude of answers to your scenario and I am sure with sufficient time to invest in researching the variety of articles available you can always get to exactly the same answer given by your chosen accountant.

The only difference is the time it will take you.

Therefore, I believe more than ever that we are indeed selling 'time' to our clients and perhaps just as the penny is dropping that we should have been charging for 'knowledge' from the beginning, now we really should be charging for time!!

Good post!

Its given me a lot to think about. I do like the idea of charging for knowledge (fixed rate), stops people saying "£50 an hour, thats a lot!"

Its ok saying people could research it on the internet, but how many really would, and then be able to confidently assess tax, vat or whatever it is. So maybe its the knowledge and experience they're paying for.

burg

deanshepherd wrote: »

I was thinking about this the other day. I use fixed fees and will never go back to charging by the hour but, theoretically, perhaps I should..

Here's the deal.

If you research the ethos behind fixed fee pricing (Ron Baker, Verasage, Steve Pipe, Bob Harper..) they always state that we are not charging people for 'time' (there are always the same number of hours in the day!) we are charging people for 'knowledge' and we need to price that knowledge in reference to what it is worth, not by how long it takes to produce - as once learned it can be relatively cheaply reproduced with little timecost.

However..

I would say (pre-internet) we were indeed charging people for knowledge but now I say that this knowledge is freely available to anyone who wants it. A quick google search on any tax/accounting/VAT/payroll problem will give a multitude of answers to your scenario and I am sure with sufficient time to invest in researching the variety of articles available you can always get to exactly the same answer given by your chosen accountant.

The only difference is the time it will take you.

Therefore, I believe more than ever that we are indeed selling 'time' to our clients and perhaps just as the penny is dropping that we should have been charging for 'knowledge' from the beginning, now we really should be charging for time!!

Must agree Dean very true.

I only charge fixed rates unless for one off work such as specialist calculations and investigations.

clearaccounting100

Great Thread!! i agree fixed rate for when i produce accounts and hourly rate for my bookkeeping

lorraine

I normally quote fixed fees, then the feee is already agreed, no surprises for the client.

Monsoon

Fixed fees. 50% up front on receipt of the books, 50% on completion. Helps cash flow, helps weed out the potential bad debts.