What's your transaction rate? - The Book-keepers Forum (UK)

BobHarper · Guru

What's your transaction rate?

Ask Andrina · Veteran Member

I work on Sage. When I'm just inputting I fly through them. I've never timed myself. It would depend on if you are doing an invoice from each account - say a 'product' invoice, or if you were just doing batch in sales ledger..If it's batch, then I know I do more than 60 in an hour. So maybe the test should be on invoices per customer?

Shamus · Forum Moderator & Expert

Its not that cut and dried.

First you collate, then you validate everything to ensure that the client isn't sneaking anything in that they shouldn't. And only then do yopu input into the system.

There are variances from one client to another over the complexity of input.

Also you have the law of diminishing returns in that the more you input the more bored you become (only with that part of the process).

Even so, I have timed myself previously on how long it took me to input a years worth of data for a smallish consultancy and the actual input time was 138 transactions into VT in 1 hour 14 minutes. No break as such in there but the coffee cup at the side of my desk never gets cold and I'm sure it's not the fairies that keep refilling it!

That's not to say that the next client wouldn't take 2 hours for a similar volume or the one after that less than an hour.

It's all down to things like the number of entries required per transaction combined with lack of interuptions and being focused on that task rather than having some other clients issues at the forefront of my mind.

As stated though that is also simply input time, not compilation and verification time which normally at least double the time required for the job.

So, lets say for the whole job about 60 an hour and we wouldn't be too far off base.

BobHarper · Guru

@Andrina - thanks.

@Shamus - yes, I should have clarified a) total time (not just data entry) and b) sustainable.

One of the things we have developed is a client handbook and we use this as the basis to help clients organise themselves. This helps them and us.

kjmcculloch83 · Expert

Don't suppose you'd be happy to share some of your ideas from your client Handbook, would you, Bob?

Kris

BobHarper · Guru

@Kris - we actually have two handbooks; one for clients who do their own bookkeeping and one where we do it.

There are different sections including a) filing and storage b) what records to keep c) how to organise paperwork d) legal requirements and e) cross-referencing f) glossary and list of actions which we go through with the client.

Shamus · Forum Moderator & Expert

interesting point on what records to keep that came up the other day with a client of mine.

HMRC state that records must be kept for six years plus one (current year). At any time HMRC can go back over anything in that (effectively) seven year period. However, if they found something untoward in (say) year six they can then decide to go back as far as they like or extrapolate the issue as though it had occured for all periods prior to the period in which it was encountered.

Many practices store data for the obligatory six years plus one but not beyond that which puts the accountant in the position of being liable to be sued by the client where they do not have the required information.

Is it one thinks purely by coincidence that PII policies are restricted to a six year run off period for that very reason.

As such, maybe we should all be thinking about scanning all records older than six years and whilst originals may be destroyed the scanned copies are kept until seven years after expiry of the actual company.

That also begs the question. What access do past clients or their new representatives have to your records?

Just a few questions there to ask oneself about document storage requirements both for ourselves and what to advise our clients.

Ask Andrina · Veteran Member

I was just just talking about the input as well...and yes albeit cups of coffees and no breaks...your mind can wander sometimes too, because lets face it, we are human after all - good days and bad days lol

RE:HMRC - they shouldn't give legal parameter's, then choose to insist on going back further, if it's believed there may be a 'problem' company or a service provider, they should do more regular checks. These are not convenient, I know, but they usually know who they want to monitor, and this way, it would help with getting everything correct.

kjmcculloch83 · Expert

Thanks Bob, thats very similar to what I include in my new client information pack. I had been thinking about updating it and just wondered if you had anything I hadn't thought of.

Kris

Amanda · Expert

Kris,

YOur client information pack if it a few A4 sheets stapled together or is it in a presentation folder (like the estate agents use?). And what sort of things do you include in it?

This is something I have been thinking about for new business, as its that time again when I need to network/market myself again due to loosing a couple of clients to the 'still' recession!

kjmcculloch83 · Expert

Hi Amanda,

It's a throwback from my first weeks in Business, and has never been updated or redesigned. It's an a5 booklet and has about 16 pages.

Kris

BobHarper · Guru

@Kris - bigger isn't always better but ours is an A4 folder and it runs to around 40-pages. It is two columns (14 point font) so it is easy to read at around 6,500 words.

Shamus · Forum Moderator & Expert

BobHarper wrote:
it runs to around 40-pages. It is two columns (14 point font) so it is easy to read at around 6,500 words.

Sounds like my engagement letter! wink

BobHarper · Guru

@Shamus - we thought it was too much for clients but came to the conclusion that if they are not prepared to work through this with us we are not prepared to work with them. I've found there is a link between client compliance and profits.

Amanda · Expert

Thats a very good point Bob!

Thanks for that.

dingo20 · Member

I had a client who I charge £20 per hour and spent 3 hours a month at her home office but because she constantly interrupt me asking me what i was doing and why it took three hours and not less I could never get anything done. In the end I told her to get someone else to do it the ironic thing was she ran a recruitment agency for financial and accounting staff. Shame she couldn't keep hold of anyone I was the third to my knowledge. So answering the question I got about 3 transactions an hour with that one!

BobHarper · Guru

@Dingo - nice one, that is a record and another reason why I do not think on-site bookkeeping can be scaled into a business. We're looking at a couple of online propositions at the moment and going to test the market. We need to work out the most suitable market segments.

dingo20 · Member

I'd be interested to hear how that works I do have quite a few remote client who I work for could be interesting to swap ideas?

BobHarper · Guru

@Dingo - we've decided to focus on VAT registered Ltd Cos price on the size of business; small, medium and large. And, we have three levels of service; basic, standard and premium so we have nine price points in total.

The entry level is £95 a month, but that includes doing the year-end accounts/tax and dealing with Companies House.

How does that compare to you?

dingo20 · Member

it's a difficult one to compare but for sole traders (once a year visit / tax return) it will work out to around £400 and for weekly visits (4/5 hours around £80-£90 per visit). It's hard to gauge on business size because some businesses, even though they are small, need extra help. As an example I deal with Hoteliers who are Vat regisitered and most of there costs are zero rated but it involves a lot of work picking out the Vat items so there's more work involved. I like the idea of charging a monthly fixed fee and so do most customers but I would have to add in an hourly rate for extra work or limit the amount of hours involved if that makes sense? Starts getting contractual and a bit messy.

BobHarper · Guru

@Dingo - keep in mind that a fixed fee is for a fixed amount of work and some clients fit and others don't.

gillyfleur · Senior Member

If I could get a transaction rate I'd be loaded ! I've seen comments before of people charging 50p per invoice. At that rate I could get in excess of £150 per hour if I was batch processing in Sage. My record was 360 sales invoices in an hour and ten minutes ! I should get danger money for likely RSI !!

BobHarper · Guru

Kris - you're on my case a bit, aren't you? Who said anything about doing clients over or milking them dry?

First, if the service was offered at 50p a transaction and the client agreed they would be happy with their balloon, otherwise they wouldn't agree.

Second, if a serviced is offered at £20 an hour and the processing rate was 60 transactions an hour the cost to the client would be 33p. If someone else susses out how to process at 200 transactions an hour and prices at 20p per transaction they are 40% cheaper and 100% more profitable. The extra profit for them is their reward for sussing out how to process faster. That's a win:win.

-- Edited by BobHarper on Saturday 12th of May 2012 02:39:15 PM

BobHarper · Guru

Interesting. Keep in mind that your pricing strategy is what captures value for you. And, I know people quoting 50p per transaction so you could be leaving money on the table.

kjmcculloch83 · Expert

I disagree with this leaving money on the table theory. My thinking is that when you walk away from a deal everyone involved needs to feel like they've won. Think kids party, if not everyone leaves with a balloon someone is upset.

I think business is the same. It's not about finding out a clients budget and milking them dry, just a fair price for a fair days work. I do believe that I'm worth much more than £12 per hour, and so do my clients. I'm happy, they're happy, we all get a balloon. When you walk away with someone feeling done over, whether then or later thats when you get problems.

Kris

kjmcculloch83 · Expert

Sorry you feel I'm on your case bob. I think this topic is just something we're both interested in. Just because we disagree doesn't mean I'm getting at you. We just seem to disagree with your theory of not leaving money on the table. I think often it's good to leave some money on the table and then the client feels like they have a great deal. As long as the service provider isn't working for nothing, why not? Why do we need to take every single penny we smell? Kris

BobHarper · Guru

@Kris - the difference is asking the client what they want and working with them to get it rather than just telling them what the price is whether it's bookkeeping or a car.

-- Edited by BobHarper on Sunday 13th of May 2012 02:51:16 PM

BobHarper · Guru

@Kris - what's wrong with maximising profit?

If you are working on a model of 25% of client value the bigger your profit, the bigger the clients. They should always make more than us, but that doesn't mean can't make more by smarter pricing. Quoting an hourly rate or transaction pricing is not the most optimal pricing model for service providers or their clients.

kjmcculloch83 · Expert

Theres no problem with maximising profit. What there is a problem with, for me at least, is feeling you need to snatch every penny from the table.

Kris

BobHarper · Guru

@Kris - I'd suggest this is a problem you are creating all of your own and I wonder if you could you be in danger of imposing your own price prejudice on clients?

Some clients will want a low price wine (where the restaurant makes a small margin) others will prefer champagne (where there is a much bigger margin). Provided the price is agreed upfront, where is the problem?

kjmcculloch83 · Expert

I would never go to a restaurant where they want to stuff me full and force extras on me to make sure they don't leave a pound on the table though.

We're never going to agree on this one. If I was taking as much as the client had off them I'd feel the need to wear a mask and a striped jumper. I find that way of working morally wrong. I do understand though that not everyone shares my moral compass.

Kris

Shamus · Forum Moderator & Expert

kjmcculloch83 wrote:
I do understand though that not everyone shares my moral compass.

I do.

Sheesh, you'd think with three marraiges behind me I would start being more careful throwing those words around wouldn't you!!! lol

kjmcculloch83 · Expert

Thought I was on my own on that one, thanks Shaun

Kris

BobHarper · Guru

@Kris - I spoke to a client about this very issue this week.

He is a hairdresser and we were looking at ways to increase profits/business value and he said he doesn't like selling products. I asked if he has every been to a restaurant where the wine waiter REALLY know his/her stuff and he'd spent more than normal. He said yes and going there again after our meeting. The penny dropped, when selling is done well, spending money can be a pleasure.

kjmcculloch83 · Expert

Bob, I'm not scared of selling, neither am I embarassed to make a profit. What I don't want to do is be concerned about any money I might leave. If I think I can offer a client something I will, and charge for it. But I won't sell them something just because they have money burning a hole in their pocket. Have you ever gone to buy a car and the salesman realises you can afford a more expensive one than you're looking at. They guide you because they see a chance to get more money out of you and not because its what you like or need. That annoys me and I generally walk away. I don't want to be that person.

kjmcculloch83 · Expert

This is what I do. I think you are avoiding my point. The issue I have is that in multiple threads you say don't leave money on the table. Surely if you've filled the clients needs and there is still money there, that's where you should leave it. When you say these words the impression I get is that crunchers hang their clients by their ancles to make sure they have every last penny. Sorry if that's wrong, but like I say that's the impression your posts give me.

BobHarper · Guru

@Kris - I am not avoiding your point and you see what you want to see.

The point I made (to gillyfleur) was they their speed could mean they are leaving money on the table. Their speed is over 300 transactions an hour, others are 60. If a service provider is quicker than the rest they should make more money.

kjmcculloch83 · Expert

As I say, you mention this often in multiple threads. Perhaps I'm not the only one with a scotoma. Like I say, I don't agree with you, and you're never going to accept another viewpoint so this conversation is never going to reach a conclusion we agree on.

BobHarper · Guru

@Kris - I have accepted another persons point of view, just not yours.

This conversation has ended with us agreeing....to differ and I accept your apology about Crunchers hanging their clients by their ankles to make sure they have every last penny.

kjmcculloch83 · Expert

Fair enough. Like I say, its my impression based on what you say, if its wrong maybe you should reflect on some of the things you say

BobHarper · Guru

@Kris - you keep your impression and I'll keep expressing my opinion.

Shamus · Forum Moderator & Expert

BobHarper wrote:
Their speed is over 300 transactions an hour, others are 60.

Just to clarify that.

there is a difference between sorting, classifying, evaluating and the entering at 60 an hour to pure data entry at 300 an hour.

That would see bookkeepers as data entry clerks rather than the skilled professionals that most of them are.

I think that the case given in this thread for 300 transactions was where the work had been done first and the 300 was purely the data entry side of that.

If a client of mine needed purely high volume data entry then I would hire someone to do it for me as its a waste of our skills and time which could be better spent on more profitable tasks.

I don't mind doing a bit of data entry as part of other work but if it was purely a matter of number of transactions per hour I would just tell the client that they had come to the wrong sort of professional and advise them of local aleternatives.

At the end of the day, clients go to bookkeepers because they are often quite viable cheaper alternatives to accountants for small business (I have no clients for purely bookkeeping services).

As such our transaction rate is immaterial to the client. They give us the work, they don't tell us how fast to do it or what work to do. Or at least they shouldn't! I did have one client who tried but as I'm quite happy to let any client go to an alternative service provider (keeps me on my toes not tieing them in) they were put in a situation of either shut up and let me sort your business out or go to someone else. I even got their files off the shelf any put them on the desk for them to take away with them.

They quite wisely stayed as all in all everything that I do is for the benefit of the client and whether it takes me 20 seconds or 20 minutes to process a transaction is really non of the clients business.

Similarly the procedures that I follow to get to that finished product is non of the clients concern.

We provide a finished product, most of us produce it very well and very quickly. The client should only be concerned with their input and what is returned to them in a timely manner.

Just thought that I needed to clarify that so that those like myself who think of clients businesses almost as our own do not get sidelined by all this talk of processing speeds which is really akin to call centre type mentality which is not what this business is about.