New!! needing some gentle guidance on Software and client fees

RJ_123 · May 2018

Hi All, I have recently left my former role in a large accounting to firm to set up from home due to needing flexibility around a family members medical needs, I have 10 years experience in accounting spread across finance, bookkeeping, tax, management accounts etc so a good grounding but.

Software******

I have SAGE with the Personal Tax add on as I specialise in tax which I am currently trying and like the look of at present. My question is should I use a different software for Payroll such as Xero or keep it all within SAGE for the company accounts that I am in the process of engaging. I have received mixed advice from former colleagues so would appreciate any tips. At present the companies that I am dealing with only have 1-5 employees so the smaller type. I have though secured a lead with a beauty franchise and their salons have up to 12 employees.

Quoting for my services

This leads me on to my next question, how do I go about pricing my work. As I am completely new to this style of working I simply don't know what prices to go with. I understand the concept behind pricing your work etc I just feel I need to grow a bit more in confidence when providing a quote. My current thinking is to have a menu style fixed fee per service with stepped fees as required around 240 for a basic tax preparation service with up to 1 rental property or business (most of my clients now are small businesses and self employed) My experience and background using tax as an example is dealing with additional rate tax payers and quoting as such (for a diverse service) so as I am targeting a completely different market sector I am not sure what is reasonable.

Company Accounts, Payroll etc I'm not quite sure how to structure this pricing. I was thinking based on company size/turnover/bookkeeping requirements etc.

Sorry for the long post, I am really keen to get it right and have a really big opportunity in the sector I have chosen to target I don't want to lose.

Appreciate all help available and if there is anyone out there who would like to mentor me please let me know.

Thanks

burg · May 2018

Hi RJ,

Both questions are valid and there is no simple answer to each.

Software

I would recommend steering clear of Sage personally. Xero will work well for bookkeeping and being ready for MTD, for the very small clients I'd also look at Quickbooks Online. As for payroll take a look at Moneysoft Payroll Manager and Brightpay. Both are really good and relatively inexpensive.
As for accounts prep and tax work you need something beyond Sage, QBO or Xero. I use Capium as I like cloud based software. It's not the cheapest but certainly not the most expensive either. Tax Calc and taxfiler are also both popular choices.

Pricing

This is an individual thing about how to get it right. Some kind of fixed pricing system works best as does monthly as opposed to annual fees. If you have a menu or packages then you can spend less time negotiating rates as there is a structure to them. If someone wants to pay less then they lower their requirements or go elsewhere.
Where to pitch your pricing is difficult. I've recently re-packages how we operate and pretty much doubled our fees for both existing and new clients. Probably the best thing I've ever done in practice. As a guide we are not looking for new sole-traders or small limited companies. We target services based businesses, with sales of £125k + and interested in making money. We still have some sole traders and fees start at £39 + VAT per month. Limited Companies start from £99 + VAT per month. This achieves compliance and gives them Xero but they are responsible for day-to-day bookkeeping. Our packages beyond that add different levels of help and step up at £500k of sales.

TreadStone · May 2018

While I don't often disagree with Ian, I wouldn't rule out Sage entirely.

We use Sage Business Cloud (or Sage One as it was formerly known) and are currently migrating (or attempting to) about 60 of our clients onto it. It's no worse than the other offerings out there. The Partner edition also has the added benefit of Final Accounts Online and Corporation Tax Online included at no extra cost. Certainly worth trialling in my opinion.

As for costing, most seem to prefer a fixed fee basis as it's an easier "sell" to the client with the added benefit for clients of being able to budget knowing exactly what they're paying for and the holy grail of "no debtors" for the accountant as everything is paid for in advance !

Eveyone's a winner

Good luck.

burg · May 2018

TreadStone said:
While I don't often disagree with Ian, I wouldn't rule out Sage entirely.

We use Sage Business Cloud (or Sage One as it was formerly known) and are currently migrating (or attempting to) about 60 of our clients onto it. It's no worse than the other offerings out there. The Partner edition also has the added benefit of Final Accounts Online and Corporation Tax Online included at no extra cost. Certainly worth trialling in my opinion.
.

Has this improved???

My last experience of it under the guise of Sage One was awful. The problem was the issues didn't come to light until us as the accountant got involved to do year end work. There was no way of drilling into transactions, a really awkward way of correcting mis-posted transactions and general not user friendly.

I've not used it for some time as I jumped ship whilst it was awful.

TreadStone · May 2018

I wouldn't say it's perfect but they've certainly upped their game over tha last 18mth. We're still at a relatively early stage with it so time will tell.

RJ_123 · June 2018

thank you so much all of the above has been really helpful. Somebody also recommended VT software to me. I'm spoilt for choice!! With regards to pricing I think I will defo stick with the fixed pricing to keep it simple and then charge separately for any adhoc work. Capium is the only other software that I have not yet looked at so will have a nosey now. Thank you again for your responses.

Buhir_the_Bookkeeper · July 2018

Hi

I have a pricing structure on my website. Yet a local accountant who has been in the industry 50 years said I was too cheap. Maybe it will help. If you want to check below.

https://www.totalbooks.co.uk/pricing-page/

Fixed fee, upfront, monthly is the way to go. It means you have received a year's worth of fees before the year-end date wether ltd company or sole trader.

Always confirm everything in your sign up meeting and get them to sign what they are expecting at the start in the letter of engagement and ensure you have an hourly rate in casework goes outside of the expected remit. Which is more often than not the case. I am going to increase my hourly rate to £60.00 per hour for qualified work.

Software:
Moneysoft for payroll
VT Transaction plus for bookkeeping
Tax filer for Tax returns & Accounts Preperation (For ST,Ltd & Partnerships)
Accountancy Manager (Trialing this for use as a practice management suite)
Dropbox (To keep all documents in the cloud.) (Buy a scanner and keep folder system for each client (Tax, Accounts, Correspondance & one folder for yourself) This way you can keep all records on the PC and save untold office space and it easy to get to the records.

Pricing:

You need to take into account if you are pricing on an average 40.00per hour for the work. You lose £10.00 per hour in tax, and 30 to 50% in overheads, as well as 30% of your time in running a practice, is dead, non-billing admin time doing other things such as phone calls, emails admin etc. So then you are working for £10.00 per hour. so be careful from the onset.

Try and work out how long will an accounts prep job take. Say 10hours start to finish, 1-2 hours tax return start to finish 1-3 hours client meetings emails phone calls. so that's 15 hours. bill the client £1500 for an Ltd company and tax return that's £100.00 per hour. take off tax, and business expenses if you are working at a 40% net profit margin that's £600.00 profit. I hope that gives you an idea.

Good luck for the future.
There is a MIP fee pricing review that was done last year I have attached a copy.

RJ_123 · November 2018

Buhir_the_Bookkeeper said:
Hi

I have a pricing structure on my website. Yet a local accountant who has been in the industry 50 years said I was too cheap. Maybe it will help. If you want to check below.

https://www.totalbooks.co.uk/pricing-page/

Fixed fee, upfront, monthly is the way to go. It means you have received a year's worth of fees before the year-end date wether ltd company or sole trader.

Always confirm everything in your sign up meeting and get them to sign what they are expecting at the start in the letter of engagement and ensure you have an hourly rate in casework goes outside of the expected remit. Which is more often than not the case. I am going to increase my hourly rate to £60.00 per hour for qualified work.

Software:
Moneysoft for payroll
VT Transaction plus for bookkeeping
Tax filer for Tax returns & Accounts Preperation (For ST,Ltd & Partnerships)
Accountancy Manager (Trialing this for use as a practice management suite)
Dropbox (To keep all documents in the cloud.) (Buy a scanner and keep folder system for each client (Tax, Accounts, Correspondance & one folder for yourself) This way you can keep all records on the PC and save untold office space and it easy to get to the records.

Pricing:

You need to take into account if you are pricing on an average 40.00per hour for the work. You lose £10.00 per hour in tax, and 30 to 50% in overheads, as well as 30% of your time in running a practice, is dead, non-billing admin time doing other things such as phone calls, emails admin etc. So then you are working for £10.00 per hour. so be careful from the onset.

Try and work out how long will an accounts prep job take. Say 10hours start to finish, 1-2 hours tax return start to finish 1-3 hours client meetings emails phone calls. so that's 15 hours. bill the client £1500 for an Ltd company and tax return that's £100.00 per hour. take off tax, and business expenses if you are working at a 40% net profit margin that's £600.00 profit. I hope that gives you an idea.

Good luck for the future.
There is a MIP fee pricing review that was done last year I have attached a copy.

Thank you so much I will have a look at your site. All the above makes sense I often worry I charge to much but when it is broken down it is much clearer.

New!! needing some gentle guidance on Software and client fees

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