Commission for client referrals

jow774
jow774 Registered Posts: 465 Dedicated contributor 🦉
in General accounting discussion
I was told yesterday that a local accountant gives a contrator £50 for each subbie he refers to them (I had snared one of said contractors subbies through my own client). So I was wondering if anyone else does this and if so do you reclaim it?

Comments

  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    We never pay for referrals. Clients refer us due to our service and fare fees and not as we offer money. Too be honest I would love to know what they charge the subbie if there paying £50 as we only charge £145+VAT for subbies!
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    groundy wrote: »
    We never pay for referrals. Clients refer us due to our service and fare fees and not as we offer money. Too be honest I would love to know what they charge the subbie if there paying £50 as we only charge £145+VAT for subbies!

    Quite. We don't pay for referrals either.
  • Newbie
    Newbie Registered Posts: 229 Dedicated contributor 🦉
    Same here (all referrals are free)
  • jow774
    jow774 Registered Posts: 465 Dedicated contributor 🦉
    "Reputable" high street accountant in nottinghamshire suburbs charging £250 + VAT for a basic tax return for a subbie who was paye for 9 months and has all stuff nicely laid out in folder!!!! Ive rang around the main high street ones and they all charge similar! So suffice to say I dont charge anywhere near that so Im hoping I may get a few referrals.
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    jow774 wrote: »
    "Reputable" high street accountant in nottinghamshire suburbs charging £250 + VAT for a basic tax return for a subbie who was paye for 9 months and has all stuff nicely laid out in folder!!!! Ive rang around the main high street ones and they all charge similar! So suffice to say I dont charge anywhere near that so Im hoping I may get a few referrals.

    WOW, I might have to start advertising in Nottingham :lol:
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    I charge £200+VAT. Having seen this thread I might reconsider to £175+VAT. It all depends on the client - some are pure subbies, some have their own jobs, some are in a bit of a mess. All the subbies we look after seem ok at £200.
  • jow774
    jow774 Registered Posts: 465 Dedicated contributor 🦉
    I think it depends where you are and what your set up is. If your a one man band doing a bit here and there like me then I can afford to charge less to get my foot in the door so to speak, but if you have more overheads etc you have to charge more. I dont mind doing messy tidy ups as its all experience but in my employed job a messy tidy up is an extra hourly rate on top.

    £200+VAT is a reasonable rate round here when I did my research. I couldn't charge that at the moment because of my situation, but who knows when I get a good practice together like you Monsoon im sure my fees will go up. Just need to pinch a few more clients from my high charge competitiors on the high street, lol.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    I pay for referrals. I work on a subscription basis so if a new client signs up at £200 a month then I give that first subscription to whoever referred me.

    I'm sure people would refer me without any financial inducement but it's a great way of motivating people to keep those referrals coming.

    P.S. Do people really do subbies tax returns for less than £200 (per annum?!). Is that all your years of study was worth? Wow.
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    deanshepherd wrote: »
    I pay for referrals. I work on a subscription basis so if a new client signs up at £200 a month then I give that first subscription to whoever referred me.

    I'm sure people would refer me without any financial inducement but it's a great way of motivating people to keep those referrals coming.

    P.S. Do people really do subbies tax returns for less than £200 (per annum?!). Is that all your years of study was worth? Wow.

    In the North West were we are based you wouldnt have any subbies at all at that price and to be honest most of the subbies we deal with take no more than an hour to prepare the accounts so we charge £145 + VAT.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    groundy wrote: »
    to be honest most of the subbies we deal with take no more than an hour to prepare the accounts so we charge £145 + VAT.

    This is fair. Subbies accounts/tax returns where all they are is CIS and nothing else, very few materials etc, it really is a basic service and while I charge more than this, I wouldn't say £145 is undercharging, because it's very simple work.

    Subbies are all about the refunds - very different to most SA clients, who will usually pay at least £300 per annum for accounts/tax return.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Interesting.

    I don't touch subbies with a barge pole but the first firm I worked for 15 years ago did hundreds of them and I don't believe any were charged less than £200 back then.

    Just because your clients don't pay more, it doesn't that no clients will. They do.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    deanshepherd wrote: »
    Just because your clients don't pay more, it doesn't that no clients will. They do.

    This is true, and my clients probably would. For me, though, what I'm paid is only a part of what I get out of my business.

    I only have about 3 subbies. For the amount of time it takes, I feel guilty charging as much as £200 but I don't want to devalue what I'm offering by going any cheaper.
  • stevo5678
    stevo5678 Registered Posts: 325
    When you say only 3 subbies, so you mean 3 CIS clients or just 3 simple sub contractors? EG would you count an electrician who takes on other subbies and is VAT reg. as on of your 3?

    To have only 3, you must be turning away lot of these clients as there are loads of them around?


    Cheers
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    stevo5678 wrote: »
    When you say only 3 subbies, so you mean 3 CIS clients or just 3 simple sub contractors? EG would you count an electrician who takes on other subbies and is VAT reg. as on of your 3?

    To have only 3, you must be turning away lot of these clients as there are loads of them around?

    Noooo, 3 subcontractors.

    Contractors are a totally different ball-game and need (far) more work!

    I don't turn anyone away, I just don't seem to attract subbies that often. I have enough new enquiries that I don't do a lot of marketing, so it's just about who comes in through the door :)
  • burg
    burg Registered, Moderator Posts: 1,438 mod
    I charge £240 (no vat at the mo) for a subbie. I only have a few around 5 or so all doing work for one contractor.

    I don't pay for referrals but have considered an incentive scheme.

    Dean I like the idea of first subscription as I also work on a subscription basis. How did/do you make clients awar of this without sounding desperate which I'm certainly not at present.
    Regards,

    Burg
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    I mention it in every initial meeting with a new client and a reminder is also in my standard end of year sign off letter.

    Accountants are notoriously poor at asking for work - there is nothing desperate about it. A lot of clients assume business is wonderful for accountants and that you are not necessarily looking for more work.

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