I agree Shaun, but as has been said, this is a first job. I remember how my first one went. I had what I thought were realistic timescales for the work and still overrun.
Where I am today, I would agree that it could be done in a day. I am very similar to yourself, I work on the principle of 1 transaction per minute. The £500 is closer to the price I would charge, given that I aim for the equivelant of £30-£40 per hour. I'm not saying this is what Eliz should charge.
It depends how much needs to be absorbed in terms of overheads. Given you have a proper office and I work from home I guess your overheads are more than mine. But given I only work 20 hours a week I'm sure my absorption rate is probably higher than yours. As you say, still a lot of guess work there.
Kris
-- Edited by kjmcculloch83 on Tuesday 3rd of July 2012 09:31:44 PM
-- Edited by kjmcculloch83 on Tuesday 3rd of July 2012 09:32:58 PM
I was quite suprised a couple of weeks ago to be contacted by a (very) small Ltd co looking for a bookkeeper. I hadn't started my business yet, had only got PL from ICB so was included in their directory. After an initial meeting I have been asked to quote for the work.
The job is bookkeeping to TB for a whole year's worth of transactions. VAT returns have already been filed each quarter, but no bank recs etc.
I have no idea what to quote. There may be ongoing work on a quarterly basis after this. Does £200 sound ok or is this too much?
For me it would depend. How many transactions are we talking about? How complex is it? Sometimes we don't see the complications until we start so you may want to build room for error into the price. For a years worth of transactions £200 is only £16.67 a month. Is this enough for the work involved? What is your profit in that? Do you make anything out of it?
With a bit more information I'm sure you'll get a more accurate answer.
You say that it's very small but you don't give any indication of the type of business or the number of transactions.
would you say that all of the work could be done within one day?
If they've been doing the VAT returns they must be on top of their paperwork which confuses me to why they would need a bookkeeper and an accountant? Is this a gig to put all of their Excel work into Sage (or similar).
Have they given any indication as to suggested savings on accountancy fee's by using your services as that could give you the boundaries within which to set your fee's. i.e. if the accountant has reduced the fee's by £400 then the client isn't going to complain at £300. If they've only reduced the fee's by £100 then £200 will get rejected.
Too many unknown variables to make a call. Do you have any more info about this gig?
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I will try and give a bit more information. No accountant. They have been recording transactions on a spreadsheet last couple of years and doing own accounts and vat returns. However, it's starting to get a bit too much work and it's time to put everything on to a computer package. I will only be doing books to TB and they will again file their own accounts. I did suggest it was time to get an accountant involved but they think they can still file the accounts themselves.
There are approx 500 transactions. Bank account to be reconciled.
So you have 500 transactions to deal with, then if it's one bank statement a month to reconcile, thats 12 bank reconciliations. If each statement has 20 items on it that's 240 items to reconcile in total.
If you can process one transaction every minute and a half that's 12 and a half hours. Then if it takes you 30 seconds to reconcile each transaction that would be 2 hours. All in thats 14.5 hours. Add in 2 hours for setup and overrun. Divide £200 by that giving you the equivalent of £12.12 per hour. I don't know what your costs will be, but you'll need to work those out to see if it's worth it for you.
This is very rough, but probably the sort of calculation you'll want to do. I'd be in the £500 ball park if it were me.
500 transactions and a bank rec is quite doable in a day / long day.
Personally I would be looking for the whole gig and squeezing them up towards around £400 but for bookkeeping to trial alone I think £200 to £240 is the right territory espechially if you can help them out with a bit of "free" advice.
Just because they've been doing their books and returns themselves doesn't mean that they've been doing it correctly. (had a few of those recently myself).
A few common issues to look out for :
Are they treating input and expenditure correctly (correct identification of accruals and prepayments)
Are they claiming for what they are allowed to
Are they claiming as expenses things that they are not allowed.
Are they correctly depreciating fixed assets.
Are they claiming for use of home
Have they been carrying forwards information from one period to the next correctly.
Are they using their capital allowances / AIA.
Is their method of claiming for motoring expenses the most cost effective and if they are using mileage rates is their information related to rates up to date (Surprising how many are still using the 40p per mile).
This isn't an exhaustive list but just a few things to look out for and help the client with so securing your role as their bookkeeper.
Good luck with the new gig and don't worry, £200 is very reasonable for 500 transactions.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Chris, do you find it unusual that there is no accountant or is it quite normal to be asked to do books to trial balance only to go back to directors? This would be my first bookkeeping job so was quite surprised that there was no accountant.
Good news for you Betty, if the records are getting too much work for them. Can you or have you done the ICB payroll or Self Assessment courses? Could be an opening for you there.
I reccon that it could be comfortably done in a day so even assuming the day stretches to 10 hours that's still £20 per hour.
You know as well as I that some transactions are more time consumming than others but I think following the 80/20 rule 80% of the transactions will like as not be processed at multipled per minute... Or maybe I'm just pampered by VT's predictive filling out of transactions for me.
It sounds as though this is a Micro business that just needs a bit of hand holding so not sure that they would go for the higher rate (although I would be trying the squeeze them up to at least £240 for the day).
If it was a full service arangement then £400-£500 would be the right sort of territory.
At the end of the day though we're both still guessing here as although we know the transaction volumes we don't know the transaction complexity so both of us are making assumptions about the time each will take.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I find it quite surprising that they are choosing to use an accountant and do the year end stuff themselves. Normally what I find is that people buy in services for everything, do everything themselves or do the bookkeeping and buy in the year end services. It seems a strange way to do it, especially if, as said, they have done the vat during the year.
I find it quite surprising that they are choosing to use an accountant and do the year end stuff themselves. Normally what I find is that people buy in services for everything, do everything themselves or do the bookkeeping and buy in the year end services. It seems a strange way to do it, especially if, as said, they have done the vat during the year.
What are the reasons, do you know?
Kris
Agree, I've only come across one ltd co business in the last couple of years who've done the filing themselves, and they made a complete hash of it. Luckily (for them), HMRC and Companies House were too preoccupied to notice.
