Pricing

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.

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Comments

  • burg
    burg Registered, Moderator Posts: 1,438 mod
    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
  • FAC
    FAC Registered Posts: 17
    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.
  • FAC
    FAC Registered Posts: 17
    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
  • burg
    burg Registered, Moderator Posts: 1,438 mod
    Sorry yes £2 each so based on 20 per week i.e. 87 per month would be £174
    Regards,

    Burg
  • FAC
    FAC Registered Posts: 17
    > @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.

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