Mip

wildgoose1uk

I have now been granted a Practicing Certificate! I even have an entry on the ICSA website! My certificate covers the following:

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Company secretarial
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Company formation
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Accountancy
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Book-keeping
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Taxation
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Management consultancy
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IT systems implementation
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Business Consultant/Advisor
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Charities Administration
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Paye/Payroll

Question is do I need the aat MIP certificate in addition to this? I have decided against a franchise and decided on Digita software.

I would also value opinions on pricing. I am thinking along the lines of Bookkeeping £20, “Manager” (routine accountancy and tax) £60 and “Partner” £150 per hour. I am leaning towards fixed price jobs. Minimum for a tax return would be £250, sole trader accounts and tax return (ie my firms name on an accountants report) £400, Limited company plus director £750.

I am not sure if this is realistic or just wishful thinking though........ any thoughts?

Monsoon

Congrats on your PC!

If it's with ICSA, and you're a MAAT, I think you may have to get a PC from AAT as well - but ask the MIP team, as they will know for sure.

Deciding against a franchise sounds like the right thing to do!

Fixed fees are great - most people want these now anyway. The prices all depend on what kind of market you are pitching to. If it's your average plumber, small shop etc, then they are probably a bit on the high side, but if it's to the larger end of small businesses then you're probably fine.

There are so many accountancy businesses now that offer really low rates because they automate things that I'm beginning to wonder about pricing... So many more people are price conscious these days due to the recession. I would never advocate being the cheapest and there will always be people who will deliberately avoid the cheapest (for fear of getting what they pay for), and those who are happy to pay a premium for quality service. You need to decide what niche you want to fit into.

I would guess the going rate for a basic tax return with up to 3 simple income sources is from £75 (really small work from home bookkeeper type accountant) to £175 (but somewhere like Grant Thornton can't process even the most basic TR for under £300, I've heard, but that's due to being a different type of practice!). For entering a P60, some interest and dividends £250 seems on the high side to me, as it's not going to take you more than an hour. I know Digita is priced per client number so that has to be factored in too and there's always admin to consider - which will always be higher in the first year. I've heard it said that you really start to make profit once you've had a client for more than 3 years - and I'm really seeing how this is true now. The fee is the same but the job takes half the time.

Sole trader package - make sure you are clear whether that price includes some bookkeeping (in which case it's fine depending on how much bk there is to do) or whether thats the price from a good TB. If the latter then I would guess an average market price is £300-350.

For a small Ltd Co (like £10-20k turnover, few transactions and/or good bookkeeping) you're unlikely to get the price-conscious (a really simple Ltd + director could be as low as £350-450) but then that's not necessarily a bad thing in terms of client quality, but might mean your client base grows slower. Personally, even though I think all Ltd Co jobs should be £600+, I don't mind doing really little cheap Ltd Cos for much less if all they want is a compliance only service; if it's literally only going to take me 2 or 3 hours, it's money in my pocket and if I don't take the job, someone else will. As I still earn my best hourly rate for it, there is no opportunity cost, so it's worth doing in my mind.

Are general advice and queries included in your fixed fee? If so, how do you define general? (For me, yes they are included and it's anything phone/email that I can answer in 10 minutes. If I have to go away and look something up to research it, or spend a while composing a reply, it's chargeable).

Hope some of that rambling helps

Good luck with your new practice!

wildgoose1uk

Many thanks for your reply Monsoon. I was thinking they may be a little on the high side in some cases but did not want to fall into the trap of pricing too low as it is always difficult to raise prices as the clients think you are taking advantage of them.

I know what I am like and whether I price the cheapest or not I just would not leave things undone so they would end up getting extremely good value! I aim to provide a quality service but without pricing myself out of local shops/trademen/farmers etc.

General queries etc would be included int he fixed fee. I hate the idea of charging clients for every phonecall with a passion! 10 minutes seems on the low side to me but if the client knows 10 minutes is the limit and you allow an extra 5 mins then you get a bit of extra goodwill as well.

Monsoon

Yeah, avoiding pricing too low is important!

When I said 10 mins, that's very much give or take, it's not set in stone (it's an internal policy, not something we contractually agree to with clients) We very rarely have to charge extra as we don't like charging for phone/email support either! It's just useful to have some kind of thing in place to give you the means to charge if someone throws you a really complicated/ long-winded one!