I have an urgent plea, I am meeting a potential client tomorrow who wants a fixed monthly fee instead of a hourly rate. I have only ever charged hourly.
I have one client for 20 hours per week who pays a lowish rate ( I am negotiating a rise) and another client who is a friend so I do his accounts for free. So you can see I am not a very good business women when it comes to money and I don't want to undercut myself again.
He is a new company and I can understand he needs to know his costs but I don't know how much to charge on a fixed rate. He states on the phone that he only has about 20 invoices per month and one employee that he would like me to put on payroll. This seems less than 2 hours per month but I always seem to end up doing more than original thought, I am concerned that I will not cover my costs but don't want to scare him off either..
I am very familair with payroll so have no problems there BUT i do not have payroll at home so I will have to purchase this before pay day next week.
So a few questions
1 - I see that payroll manager seems popular with the forum, would this be a good choice for multiple companies? 2 - Am I being optimistic thinking it will take 2 money hours per month, taking into account initial set up costs for payroll, wage slips etc 3 - Should I charge a minimum fee per month, say £25 or £30, so this would cover 1-2 hours work or does this seem too much for the amount of work required. 4 - Should you quote at the meeting or go away and think about it?
I will be visiting him tomorrow and will find out a bit more, but I would like to go in with an idea of what I would like to charge rather than appear indecisive.
I would be greatful if anyone could offer me any advice with this.
I wouldn't get into the costs of buying a payroll program for a company with 1 employee - why not use the HMRC employer CD rom?
For approx 20 invoices and 1 employee I would think it would take less than 2 hours but you have to factor in not just the time you are there but travelling to and from I'd go in thinking about £40 a month and revising this when you actually see what's going to be involved. Even if it's really not much I wouldn't go for less than £30.
It depends on how often he expects you to update the work (weekly, monthly, quarterly), 2 hours a month entered quarterly can quickly become 4 hours a month (and more) if you have to enter things weekly. In my experience clients always underestimate how much work there is to do and always want more information (and therefore more time) from you.
Maybe I could suggest offering a 3 month trial where you'll work at a fixed rate your comfortable with and which will also serve as an introductory offer. Then after 3 months you can sit down and review how much your doing. What other services you offer if he'll pay your time for them (ie Cash flow, Debt chasing etc...).
Also, could I suggest 12pay as you can use it for free to begin and still get accurate figures, and payslips (printed on plain paper). This will allow you to get started with the new client and up to two more and let you test the 12pay system. (No affiliation to the company, but I trialed this system and found it perfectly adequate and low cost.) When I checked Payroll Manager did serve multiple companies for about £115.
Sorry this isn't as specific on amounts as you'd like, but I don't think there is a definitive answer, just how much you and the client are comfortable with. Be brave and confident when it comes to the money conversation.
Thank you so much for the advice, I was going to go in much lower than you suggested and realised that this would have been to my detriment.
I have now met the client, he is happy for me to work with him, we have agreed a price that we are both happy with and will review this in 3 months.
I am also looking into the 12pay system and can't thank you both enough for your help.
having the advice and support led me to go into the meeting confident about my prices and unless the client subscribes to the forum he would never have guessed that yesterday, I didn't have a clue on how much to charge him.
