Pricing

FACFAC Registered Posts: 16
Hi,

I need some help with getting my pricing right for a new customer.
I have been approached by a potential customer to provide them bookkeeping and payroll services:
In meeting I had with them they provided me this information about their work volume:

2500 to 3000 purchase invoices per year
20 sales invoice to generate per week
40 to 45 employees in payroll to run weekly.

My question; if you face such customer how much would you consider to be reasonable price them?

Thank you for your guidance.

Comments

  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,440
    To give you an idea. We would set them up with Xero and automate the bookkeeping using Receipt Bank.

    Here are some bits to consider

    1 - We are a premium service this may not be your angle.
    2 - We would not undertake this work as just bookkeeping or payroll. We would want accounts work too at an additional £499 per month.
    3 - We charge heavily for weekly payroll as we don't want the work. We would encourage monthly where possible saving £300 per month
    4 - We would invest heavily in technology and automation and assist them in saving time elsewhere within the business
    5 - Whilst such work would be nice to get we don't need the work. If you are at an earlier stage you may decide you need income more desperately than I do.
    6 - I have estimated turnover at £3m which forms the basis of our pricing and would affect our price quite significantly.

    Our actual fee structure would give the following result

    Bank rec on Xero - £600 per month
    Sales invoice generation - £110 per month
    Processing of Purchase invoices (photo taking) - £60 per month
    Payroll - £450 per month

    Overall fee of £1220 per month

    For delivering a quality service where you can achieve a decent profit I would be looking at the following minimum pricing levels

    £1 per purchase invoice = £250 per month
    £2 per sales invoice = £87 per month
    £1 per payslip = £195 per month
    £1 per bank rec item (3000 purchases/ year + 20 sales/week) = £337 per month

    An overall minimum of £869 per month for this client.

    Hope that helps.
    Regards,

    Burg
    FACNeillaw
  • FACFAC Registered Posts: 16
    Amazing explanations Burg. Many thanks.
    I will use your advise in my negotiation.

    I am using Sage 50 Pro 2018 and VT for bookkeeping. Is there any way to automate the bank recounciliation and purchase invoice entry. We are spending alot of time on these.
    fedemenni
  • FACFAC Registered Posts: 16
    burg said:

    To give you an idea. We would set them up with Xero and automate the bookkeeping using Receipt Bank.

    Here are some bits to consider

    1 - We are a premium service this may not be your angle.
    2 - We would not undertake this work as just bookkeeping or payroll. We would want accounts work too at an additional £499 per month.
    3 - We charge heavily for weekly payroll as we don't want the work. We would encourage monthly where possible saving £300 per month
    4 - We would invest heavily in technology and automation and assist them in saving time elsewhere within the business
    5 - Whilst such work would be nice to get we don't need the work. If you are at an earlier stage you may decide you need income more desperately than I do.
    6 - I have estimated turnover at £3m which forms the basis of our pricing and would affect our price quite significantly.

    Our actual fee structure would give the following result

    Bank rec on Xero - £600 per month
    Sales invoice generation - £110 per month
    Processing of Purchase invoices (photo taking) - £60 per month
    Payroll - £450 per month

    Overall fee of £1220 per month

    For delivering a quality service where you can achieve a decent profit I would be looking at the following minimum pricing levels

    £1 per purchase invoice = £250 per month
    £2 per sales invoice = £87 per month
    £1 per payslip = £195 per month
    £1 per bank rec item (3000 purchases/ year + 20 sales/week) = £337 per month

    An overall minimum of £869 per month for this client.

    Hope that helps.

    Did you mean £2 per sales invoice?

    £1 per purchase invoice = £250 per month
    £2 per sales invoice = £87 per month (£2 per sales invoice x 80 = £160 per month)
    £1 per payslip = £195 per month
    £1 per bank rec item (3000 purchases/ year + 20 sales/week) = £337 per month
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,440
    Sorry yes £2 each so based on 20 per week i.e. 87 per month would be £174
    Regards,

    Burg
  • FACFAC Registered Posts: 16
    > @burg said:
    > Sorry yes £2 each so based on 20 per week i.e. 87 per month would be £174

    Many thanks Burg. I follow your comments in this forum. They are very helpful and constructive.
    burgAAT_Team
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