There have been several postings about pricing, various arguments for Hourly and Fixed Fees.
I want to go along the lines of a Fixed Fee (monthly) for agreed work, and hourly rate for ad-hoc and "consultancy" type jobs (including Self-Assessments. Trouble is I am still trying to find my regular first client (!)
Fees should be based on amount of work involved. But for those of us with little or no experience of the day-to-day routines, how will we know how many of the different transactions can be done per hour ?
Does anyone have such data or rules-of-thumb they can pass on ? Certainly understand that we can all collate and type at different speeds.
You must have some experience of processing in which you can work out how long you can process information?
Personally I use a rough rule of 30 invoices per hour. On the basis that they have to be sorted, referenced and then processed twice, once to process the purchase invoice and then once to process the payment. If you just process the payment to the bank without a need to keep a track of creditors then you could up this processing to 60 in an hour.
But as you say we all work at different speeds and at different competency levels so best advice is to get that first client and give it a go.
As Mark says. You must know your own throughput figures.
Even if you have no regular clients you can always use your own receipts and bank / credit cards statements for practie.
Don't forget to factor in the 80:20 rule in that 80% of the work will take 20% of the time the rest being error tracking, missing information, wtc.
Don't forget to factor input fatigue into the equation. It's not an issue inputing 100 receipts in the first hour but you will do less in the second hour and less than that in the third.
Time based measurement based on throughput is a yardstick but not an absolute measure. Every client, no matter how siilar they may seem, is different and until you get used to the client it is not advisable to have your fee's set in stone. Ensure that your engagement letter reflects that.
The key to a successful business is not simply how fast that you can process records but how fast that one can process them accurately. Sometimes it's faster to slow down espechially for starters.
However, long term if you appear slow or make mistakes or are unjustifiably (#1) more expensive than alternatives then you will not keep the gig.
kind regards,
Shaun.
#1 justification can be by greater qualification or experience or knowledge base. Attempting to compete on price is a fools errand as there is always someone who will undercut you. Ensure that you differentiate on quality of service rather than cost.
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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.
If you have yet to gain your first client then if I were you I wouldn't price based on a fixed fee yet. Leave this until you are more experienced about gauging the amount of time that certain tasks are likely to take you. I'd start off quoting an hourly rate to ensure you aren't really wide of the mark in your quotes. Good luck with building up your client base!
