I've been in my own bookkeeping business for 8 years now. Started at just a few hours when I could manage it each week, as I had a young daughter to take care of, and we'd just moved away from all family / friends to help with childcare. Slowly things have grown over that time; as has my little girl - who is now a 15 year old, and just needs mum to be a taxi for her..
Business is ok. I have a reasonable amount of regular clients, and a good working relationship with a local accountant. I had thought about stepping up and taking the ACCA qualification a year or two back, (I am AAT and ICB qualified,) but then realised that I prefer the hands on / nitty gritty of the day to day stuff more.
Anyway, I am lucky in that August is always a pretty quiet month for me, so I've been able to slacken off a bit, spend time with family and friends, and enjoy some of the glorious summer we've had this year. . BUT - Now its all back to normal; daughter doings GCSE courses, hubby back to leaving for work at 6.30am, and I am finding it SOOO hard to get motivated to pick up my own work again. I have a ton of stuff to do this month, and VAT Return deadlines to meet for 20 or so clients. But even with that over me, I find myself doing a hundred and one things to avoid starting work in the mornings!(I have a dedicated room as a home office.) I think its not been helped having had time to think about things over the summer, and realising that at any one time I would happily drop about 75-80% of my clients. It doesn't seem to matter how many times I try and bring them in line to do paperwork prep properly / provide all the stuff to me, they still go merrily on, doing exactly what they like. Then, if somethings goes wrong, they are the first to shout that they didn't know any different.
For example, I have a client that I have emailed 3 times since early Aug, asking for all his paperwork from 1st June, as his year end is July, but his VAT quarter is end Aug. His accountant is a really grumpy so and so, and always insists on approving the draft accounts before I roll over the year end, and also on seeing the VAT Return before I submit it! (I keep saying the VAT should be brought in line with the year end; but for some reason best known to themselves, both the client and accountant says no....??
I have had nothing back from this client - not even an acknowledge to my emails. I know he hasn't been run over by a bus, as I am still getting occasional emails of purchase invoices etc!, But I need his bank statements and sales invoices at the very least before I can start anything of his work. My last email asked (politely) to co-operate with me, to enable the deadlines to be meet, else I may have to charge a 'late fee' if I have to do his accounts out of normal hours to meet the deadlines;- but still no response... I am beginning to feel that I am hitting my head against a brick wall with most of my clients as they just don't seem to want to know. I also had a call from someone last week enquiring my services. All was going ok until they asked my hourly rate; at which point they said there was no way they were prepared to pay that kind of price to do something as basic as bookkeeping. (is £20+VAT per hour for an experienced bookkeeper a lot for Southern England then???) Seems they wanted the knowledge of an accountant, but pay at the level of a cleaner. (No offence to cleaners intended!)
OK; Rant over - so now I suppose I really had better get some work done today.......!
I'm glad you had a rant and hopefully you feel better for it!
I have the blues after my holiday, I have been back now 2 weeks from hols and still have the blues, it always happens every year! Also to help to this the kids only went back to work last Wednesday so its been difficult fitting in all my work. I have plenty to do for September but can't get motivated to do it all.
£20 + VAT per hour isn't high and the South of England commands quite good rates, he just wants it done on the cheap, if he's so confident that it's just basic stuff I would suggest him he just does himself a simple spreadsheet and files his own tax return! Lets face it if it was all that simple we would all be out of a job! He sounds like a real plonker that you can do without.
Ditto. I would rather be on a beach. I am in the south and charge £20 an hour and most people seem happy to pay it. The other day was the first time I'd been questioned and they said their previous bookkeeper had been less. Actually he hadn't and he'd made such a mess of their books that once I pointed that out they were happy with the £20 an hour particularly as I'm quite quick. Equally someone told me last week my fees for doing his tax return were too cheap and tried to give me more money!
The other day was the first time I'd been questioned and they said their previous bookkeeper had been less. Actually he hadn't and he'd made such a mess of their books that once I pointed that out they were happy with the £20 an hour particularly as I'm quite quick.
And here is where hourly rates start to fall down. with people working at different speeds and with varying accuracy it's really, really hard to compare apples with apples.
Well Kris I see where you are coming from and I do agree about the hourly rate as everyone works at different speeds. My problem is when you work at peoples premises they know how many hours you are working so for me anyway an hourly rate is better.
I have tried in the past to give a fixed price and had done on a few occasions, and although I made quite a bit of money, the larger jobs that I have which are ongoing I would find it hard to price them on a fixed fee as gradually I have taken on more and more which is providing a decent income from it. At the beginning I had no idea how big it was so I couldn't have quoted a monthly fixed fee as I think I would have lost out big time.
So for the smaller jobs, I am talking just bookkeeping how do you price them, do you ask them how many transactions they are per month or is there an easier way round it maybe. I find it very difficult to gauge it and I always fear I may end up too cheap. Also I always find that clients don't always know how many transactions etc per month as they aren't good at running their businesses. Any tips would be great as I would love to change all of my future customers to fixed rate if I could.
I agree 100% with Amanda on the pricing of jobs. I only have a few fixed price clients as well. And often its only when I am sure about what exactly they are after.
I find a lot of the time, what a client asks for at the beginning ends up being just a small part of what they actually need!
(And no worries Amanda about high jacking the thread I started! )
Surely, this is an opportunity and not a drawback. If you carefully word your letter of engagement then the client is clear what is, and more importantly is not included. If they then ask for an extra you say to them "this isn't included in your fee, however I can add it for just £x a month."
I am not any smarter than anyone else here, and have less bookkeeping experience than most, but fixed price is working for me. How can I earn an average hourly rate equivalent of £35 when some are struggling to get £15-20 per hour?
I do want to put a myth to bed though. Working out how long it takes to do someones books and then spreading it out over the year is not, in my opinion, fixed price. It's just spreading the payments.
Let me ask a question, where is your incentive to improve your systems to make things quicker and more efficient? Surely the better the systems get, the less you earn?
Well Kris I see where you are coming from and I do agree about the hourly rate as everyone works at different speeds. My problem is when you work at peoples premises they know how many hours you are working so for me anyway an hourly rate is better.
I can see where you are coming from Amanda, but you need to change how you see what you are selling. You're selling your skills, your expertise and the end result, not your time. When you get your head round this change you can start to get clients head round it. you sell the benefits of fixed price to the client. The ability to budget, no surprise bills. It's the reason people fixed their mortgage interest, so why not their accounts?
I have tried in the past to give a fixed price and had done on a few occasions, and although I made quite a bit of money, the larger jobs that I have which are ongoing I would find it hard to price them on a fixed fee as gradually I have taken on more and more which is providing a decent income from it. At the beginning I had no idea how big it was so I couldn't have quoted a monthly fixed fee as I think I would have lost out big time.
This is called "scope creep" and is what I spoke about in the last post. As long as you are clear about what is included and what isn't then this shouldn't mean you work for free, I never do. It just means the fee changes as the work changes. As long as the client knows what the price is for and you are transparent from the start, this wont be a problem. It's a chance to earn more! Imagine you get a cost to fix your car, when the garage gets it apart and finds another problem do they fix it for free? No, they phone and tell you what they found, the cost to fix it, the potential problem if let as it is and ask your permission to do it. Why can't we do that?
So for the smaller jobs, I am talking just bookkeeping how do you price them, do you ask them how many transactions they are per month or is there an easier way round it maybe. I find it very difficult to gauge it and I always fear I may end up too cheap. Also I always find that clients don't always know how many transactions etc per month as they aren't good at running their businesses. Any tips would be great as I would love to change all of my future customers to fixed rate if I could.
Don't ask about transactions then. Ask if they invoice their customers? How many invoices do they send a month? Who are their main suppliers? How do they pay them? Do they buy things in cash? How much? what do they pay by direct debit? You need to ask as many questions as it takes to be sure you have what you need. I'll give you an example. I went to see a potential client yesterday. They have 40 sales invoices a month, pay 10 direct debits a month, everything else is paid by bank transfer based on invoice terms. They have about 15 cash purchases a month (we may put in place a petty cash system), they are VAT registered, a limited company and turnover about £30k a month and have 2 members of staff they need payroll for. How long would this take you? And what would you charge. Then I'll tell you what I quoted, and got the job on.
Now this is a bit of a stab in the dark I would say about £120 per month? AM I way off the mark?
My larger job I do think the hourly works best for me, I also do their payroll which at the beginning I didn't have and wasn't part of what they wanted. I quoted separately for payroll as its quite a large one and they were happy with this, plus they like the service I give them so all in all it works well on that particular client.
Its the smaller LTD's or Sole traders that I would then want introduce fixed fee to in the future.
Have you lost many as they think you are too expensive??
I had an interesting one a couple of months ago, he had had a bookkeeper (who didn't live locally to the business) that he had used for a long time, she was giving up and got herself a job. After a lengthly conversation he then told me that he had a new bookkeeper who said that she would do it for the same price as the original one which was £11 per hour, thats very cheap for my area, and I told him so. Anyway the new bookkeeper's (it was a small firm), their first invoice was 3 times what he was expecting, well he paid it as he thought maybe they were getting to know his business, then the 2nd bill came in again this was 3 times the price so he challenged them and they said that was what it was and tuff! Bad attitude I thought, well I explained that I would need a meeting with him and he seemed very organised and it was 10 staff, and T/O was 2 million, so big, well he then decided to give it all to his accountant for a set fee per month, so I said that if it didn't work out then please call me. Well I have spoken to him again since and I am going to call him again in a couple of months to see how he is progressing as he was torn between meeting me and using his accountant, which I explained would cost him more money for bookkeeping and Payroll. I haven't even quoted him yet but he certainly didn't want to pay a large sum per hour, and by the sounds of things was a very good business man, and they had computer software in place separately to run their business as it was retail, and then they just print reports from it every month.
Let me know if I am miles out please as I really do need to grasp this fixed fee concept!!!!
You're really close. It was £145 per month. I have never lost a client for being too expensive, if I have they've never told me that. I have increased fees because they are not doing things the way they agreed to and there was a bit of a tussle, but my expectations of how I want information presented is clear in my letter of engagement.
Maybe that is where I am going wrong!!! I still have some (not all) carrier bag jobs. One that is a carrier bag job is easy as its normally in good order and he always groups all his Sales invoices, suppliers invoices etc in order and supplies statements as well and is easy to deal with so I don't mind that one. I have another one who last year I was going to ditch as I think he's appalling, but he paid on time (for a change) so I have kept him. He emailed me a few months ago to say he was going to drop his stuff round to me (hes an annual) and I actually thought that's a first it will be early.............well I am still waiting!
So what are your expectations regarding their paperwork? I guess some can never be trained.
Glad I wasn't too far out, although after I had sent the reply I did think I was cheap. Is that including payroll as well?? Mine was.
I found it really hard over the holidays to find the motivation to work. With the kids off, the only time I could work was evenings and I was just too knackered. However as of yesterday when my youngest finally went back to pre-school, I have jumped back into my routine and have worked my bollocks (well if I had any I would have) off the last couple of days, finishing off bits and pieces, emailing clients, chasing, and studying too.
I find the hourly rate works better for me because my clients have varying months. If their monthly bills were roughly the same maybe I could do it but they aren't. I have one that does a lot of stuff abroad and is also rubbish at giving me his paperwork. Then he delivers more to me after I've done the main pile so I have to do all the reports again. I charge him for all the time I spend on the queries. In a good month his bill might only be £50 but it has been £125 on occasion due to his faffing. I think it's fairer al round, no one is paying for time not used and I don't end up doing more work than I anticipated for the amount. Clients realise that if they are organised and give me what I need their bills will be lower. On a fixed fee I imagine they'd get lazy.
Still not motivated. Still got huge piles of work piling up!
It depends Princess. They only get lazy if you get lazy too. Fixed fee can work out a lot fairer for everyone, you just need to put some of the work in to get the systems up and running. It can be argued that hourly rates puts all the risk on the client and removes it from the bookkeeper, I prefer to show my clients that it is a 50/50 split.
Maybe you can run with the question no one wants to answer. Where is your incentive to improve your systems to make things quicker and more efficient? The better and quicker you get, the less you earn, so why would you invest in improvements?
I think we all have unmotivated times, I'm having one today.
So you offset increased income against reputation? You work tirelessly to increase your efficiency at financial cost to yourself? That's the difference then, I work hard to make sure I'm as efficient as possible because it increases my income and I don't think it damages my reputation at all.
So what are your expectations regarding their paperwork? I guess some can never be trained.
Glad I wasn't too far out, although after I had sent the reply I did think I was cheap. Is that including payroll as well?? Mine was.
Hi Amanda,
Sorry, I missed this post. My price did include payroll, yes.
With your first question, it kind of ties in with the point princess made about clients getting lazy. I have different expectations depending on how the business is run. For an average tradesman who provides services on credit and buys on credit I would expect them to:
Separate sales and purchase invoices/receipts into folders I will provide. Stamp each invoice or mark it 'PAID'. Write the method of payment and the date. (both purchase and sales) If a purchase invoice has a receipt it should be stapled to the invoice Provide all bank statements/credit card statements/supplier statements
These are just very simple steps, but really help to shave time off when it comes to processing. Each client has a specific date in the month when their paperwork needs to be with me, and they have a date of when the work will be completed. They know if they are late then the completion date may not be met and VAT returns etc may be late. I ask for information twice, no more.
My clients are no different to anyone else's, and I can still get them to do this. The key is never to abandon these rules and to make sure everyone knows them. Everyone I have sticks to these. I did have one client who was resistant from the start and I dropped them a few months later because they weren't able to follow these, but that's been it.
Thank you Kris the above is very helpful. Reading it I think I need to put up my fixed prices. I charge hourly when I work at customers premises though I don't expect to take any more of those clients on, the two I have are enjoyable and get me out the house. My other two client on hourly rates are variable. One is a restaurant and one direct debit payment can consist of 50 or so invoices all with varying goods between 0% VAT food, 20% drink and sundry goods, the other issue is that the work varies, lots of purchases in the summer months, less in winter and closed in January. A monthly fee would not help their cash flow.
I got my first client about 18 months ago and pricing is a big learning curve. Not only for me but for my clients as well, I have a couple that need to put their prices up. I am now in a position that I can pick and choose a bit more but I expect that fixed prices will get more realistic as I gain in experience.
Motivation after a holiday is hard, especially when you don't go away but just have a week or so without working at home! Hope you are back into the 'swing' Liz.
. BUT - Now its all back to normal; daughter doings GCSE courses, hubby back to leaving for work at 6.30am, and I am finding it SOOO hard to get motivated to pick up my own work again. I have a ton of stuff to do this month, and VAT Return deadlines to meet for 20 or so clients. But even with that over me, I find myself doing a hundred and one things to avoid starting work in the mornings!(I have a dedicated room as a home office.) I think its not been helped having had time to think about things over the summer, and realising that at any one time I would happily drop about 75-80% of my clients. It doesn't seem to matter how many times I try and bring them in line to do paperwork prep properly / provide all the stuff to me, they still go merrily on, doing exactly what they like. Then, if somethings goes wrong, they are the first to shout that they didn't know any different.
?
I am beginning to feel that I am hitting my head against a brick wall with most of my clients 
as they just don't seem to want to know. I also had a call from someone last week enquiring my services. All was going ok until they asked my hourly rate; at which point they said there was no way they were prepared to pay that kind of price to do something as basic as bookkeeping. (is £20+VAT per hour for an experienced bookkeeper a lot for Southern England then?
??) Seems they wanted the knowledge of an accountant, but pay at the level of a cleaner. (No offence to cleaners intended!)
....!
