I wonder if I could ask a few bookkeepers out there how much their typical client charge is? I don't mean how much do you charge, flat rate or hourly as I think that has been talked about many times - what I mean is what is your average client invoice? I have noticed my practice grow this year and although I thought my market was the one man band, I am finding some of these one man bands are taking on employees, expanding and growing to the point where I am deluged with huge stacks of paperwork to process every month. The result obviously has to be an increase in my flat rate monthly charge for the coming year for that client - but I worry a little as to how much a client will sustain before they make the choice to either employ a part time bookkeeper on site or search elsewhere for a cheaper solution?
I started with loads of little £60pm self employed bods, and now I have a number of Ltd. companies and partnerships with monthly bookkeeping fees up in the £150+pm area - so I just wondered how others fair with pricing and whether I am just worrying about nothing :0)
At the end of the day, you can only work so many hours, and for so many clients. If you take on more than you can cope with, you can end up loosing the work because clients become unhappy with the work you do.
I have clients who pay me more than they did the previous Accountant or Book-keeper, because all they want is the work done properly. Price tends to becomes a factor if they are not happy with the service. Some cllients may even leave you because they realise you cannot be doing the work propertly because you are not charging enough.
I only have two customers on a flat rate scheme and these are ones I inherited from a family member who was a book-keeper and wanted to give up. Most of my clients pay by the hour so it allows me to take on more work as they expand and less in times of a downturn(which we hope doesnt happen, of course!). I have just gained a new client this morning, a brand new business and told him what my normal rates are but Ive offered to do it at a discount to start with, increasing it gradually to my normal rate over a couple of months as he has time to get money/cashflow working (hopefully)....the offer went down very well and we both thought it was a win win situation. I also took the time to explain that he may only need me for a couple of hours to start with but if his business takes off he made need me 3 or 4 days a month so Im hoping I managed the rising bill expectation in advance. Its now down to me to do him such a good job that he wont want to move.
The impending RTI situation might give you an opportunity to explain how your workload will increase and how the current flat rate either doesnt work or needs to be increase, after all this will also add work to our piles. I would suggest you use this as a reason to chat to them, but also it might be worth a quick exercise on basic number - eg how many invoices v hours you did to earn that flat rate at the beginning and how many you do now. Sometimes actually showing them helps in such discussions. Bear in mind though that if they were to employ someone directly they are adding to their own PAYE/NI bill, advrtising to find someone, training them etc - do they really want this hassle when they have a great book-keeper - SELL YOURSELF, dont sell yourself short.
Hope this helps (or some of it!)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks for the answers, most helpful. I have just taken on another client who I used my patented estimating system on and for once stuck to what it said - and it was dead on! Usually when I add up the transactions and I get a crazy number I start panicking and reducing the proposed fee - never again though! If my calculation says it will take me 10 hours I will believe it. I always charge a fixed fee, both to help my cashflow (all my clients pay standing order) and at the same time give the client a figure to budget for. If asked (no one ever does) I can justify this fixed fee down to the penny by simply adding up the clients bits of paper, cheque book and paying in book stubs and bank statement lines - it works. Obviously built-in to this calculation is the possibility of my getting quicker and the process getting easier as I get to know my client's records. Plus I gradually train them to provide what I ask for in the way I ask for it (I have found this usually takes about three months) and then I can average more than my hourly rate and actually get paid what I think I deserve based on the fact I do the job professionally and with great diligence :0)
PS. I have found there is a fine line between doing the job professionally and being a professional bore to your client! They get pretty fed up with constant badgering to keep every bit of paper and stop using their private credit card and please, please, actually write something coherent I can read on the cheque book and paying in book stubs argh!! I now sit them down nicely and give them it straight, "do you want me to rummage around trying to make sense of everything, or do you want to do it? If you want me to do it then it costs" - simples! Sadly they always want me to do it :0)
