I have a client that I do the bookkeeping for, it is my first and only client, she is a beauty therapist and a sole trader. I need to put together a quote for 9 months worth of bookkeeping to be done plus the self assessment. I have previously done the first 3 months and this has been paid for, but I feel that I under estimated the time involved. I'm really just after some advise as to whether my quote would be a reasonable amount.
I have previously charged the client £10 / hour and I have found that one months worth of transactions takes me at least 3 hours to deal with, this results in a profit and loss and balance sheet. The amount of transactions on average is approx. 25 per month.
I was thinking of charging £270 (9 months x £30) plus £50 to submit the self assessment, this would total £320.
Does this sound reasonable, how does it compare to what others would charge?
What software are you using? I am confident that I could do 25 transactions and a profit and loss and balance sheet manually in an hour. I'm interested why this is taking you so long to do.
I think your bookkeeping figure is probably right (albeit taking you too long to do) and for the self assessment I would at least double that figure.
Kris
P.S. I know I am asking searching questions, please don't take them the wrong way, just wondering if there's some help we can give you to speed you up a bit.
I think that the key satement in the question is that this results in a P&L and B/S every month so I suspect that kate is having to spend a considerable amout of the time talking her client through the current status of the company rather than doing the bookkeeping per se which I am sure she will have those 25 transactions plugged in inside an hour.
I think that you are undercharging the client by at least 50% for the work that you are doing Kate as this sounds like a full service arrangement.
As this is business self assessment rather than simply the individual I think that you should be charging at least £125 for that so all in all £665 for the hours that you are currently doing and that's less than I would charge for three hours a month plus end of year processing.
It may however be as Kris suggests that you are spending a little too long with the client perhaps performing tasks that are not necessary every month (do they actually use the monthly reports?).
In fact, for 25 transactions a month why are they not simply an annual client in which case £320 would be in the right charge territory and from experience thats about the maximum that most micro businesses are happy to pay.
I'm sure that you could do 150 transactions and the associated self assessment in a lot less than the time currently spent on the client so everyone would be happy assuming that the client is happy to live without monthly reporting.
kind regards,
Shaun.
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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.
Just to add to what has been said; clients can take some weaning when they've been treated to a full set of accounts every month. If your system can automatically produce a simple income and expenses account instead then that might sweeten a bitter pill.
Yes, I agree with the comments over how long the bookkeeping takes me. I do take about an hour to key in the information which would result in the B/S and P&L. I use excel and it is formulated and I don't feel that a software is necessary due to the size of the business. The problem is is that the client doesn't keep records of their cash in and cash out even though I've tried my best to encourage this, they are just very disorganised. So the majority of my time is spent making sure that I have all the business information needed for the the cash book that I compile and getting all the paperwork into an organised manner - receipts, invoices, bank statements.
The client wants the B/S and P&L on a monthly basis so that they can see how their business is performing on a monthly basis, but I don't feel that the production of the monthly accounts takes that much time, it's just time consuming making sure that I have all the information in the accounts. As well as the client wanting a monthly update, which I produce roughly quarterly, I feel that regular contact is needed with the client as opposed to an annual approach due to the lack of record keeping.
Any advice on whether I'm approaching this the right way is appreciated.
This comment you made is interesting "The problem is is that the client doesn't keep records of their cash in and cash out even though I've tried my best to encourage this, they are just very disorganised." I, personally, wouldn't even entertain a client like this. That said, if you've tried and they really wont do it I would detail on the invoice exactly how long you are taking to organise the paperwork before starting. Stick a price next to just this, you may find that the client becomes more willing to listen to you.
I'm not sure your excel skills but you could setup a template to populate the P&L and B/S to save some time. It's sometimes also interesting to find out what the client is interested in from these. Most clients I have wouldn't know where to start reading them and I have long since given up showing them. Now I just provide a simple sheet showing the important numbers, sales, profit, VAT owed rough forecast of tax to pay at year end etc.
Not all clients hand it over in an organised way, most are a carrier bag full of receipts! I have a large one on my floor now to do this month. Some client (not all) won't know how to use a spreadsheet, so don't expect to get one everytime. I only have 3 clients who know how to use them!
What about Cash that is not banked, do they keep a record of it and what they pay for with that cash?
I bet not all is banked, say its £10.42 I bet the odd 42p is not banked!
-- Edited by Amanda on Saturday 7th of July 2012 10:27:31 AM
Tim, I get the sales figures from the bank statements (card transactions and cash is banked).
As this is my first client, I was wondering what I could expect to be given by a micro-business so that I could start processing straight away, i.e., does the client usually prepare a spreadsheet showing the business ins and outs along with the bank statements so this can be reconciled? Is that all that would normally be done?
From the comments above, it seems that quotes are based on the processing time, so I'm gathering that clients normally hand their paperwork over in an organised manner so that processing can start straight away? Are there no other non-processing tasks that are normally performed to get a complete picture of the business - apart from the bank rec?
Thanks everyone for your comments so far, it's been very helpful.
"What about Cash that is not banked, do they keep a record of it and what they pay for with that cash?"
Yes, I'm aware of this issue, I'm still trying to get the client to record this information, but for now I estimate the cash that isn't banked, I get the estimate from what the client tells me.
It seems cut and dried that the client wouldn't be asking for a monthly full set of accounts if she were to be hiding some of the takings but as all here will testify, stranger things have happened. A good cash register with till roll and a sample analysis of stock versus takings might be in order, as things stand otherwise there is some element of estimating in the monthly and therefore annual accounts. I'd say, a little too vulnerable to an HMRC inspector who was determined to find something.
I don't know the turnover but it seems overkill for a monthly set of accounts. I too would begin to list hours and rates as Kris suggests on your invoice as a precursor to any renegotiation of fees.
