I'm just starting out on the self-employment route and have a meeting set up with my first potential client but i'm having a bit of a wobble of what to charge. The client would like me to do the general bookkeeping which is about 60 transactions a month, the monthly payroll for 4 employees and the quarterly VAT return. As i'm just starting up it would probably be best to offer an hourly rate until i'm comfortable with fixed fees but at the same time I would like to offer the client a fixed fee if they would prefer this.
The figure i've come up with based on the information they've given me is £70 a month - does this sound about right/too low/too high?
I haven't factored in any travel fees to collect the paperwork as i'm not sure if that's what they want me to do yet. If they want me to collect the documents on a monthly basis I though I would add on another £20 to cover the mileage and time for a 20 mile round-trip. Again does that sound feasible?
I'm sure once I get the first one or two out of the way i'll be fine but I don't want to lose a potential client due to being too expensive (or even too cheap)
How many hours per month do you think you will spend on it?
Im based in Manchester, and charge around £13-£15 per hour, which only one has quibbled over. I only started in August myself as full time self employed
The figure i've come up with based on the information they've given me is £70 a month - does this sound about right/too low/too high?
I quote my prices based on bands of transactions, up to 49, 50-99 etc.
So for 60 transactions I would charge £49 for basic bookkeeping and VAT Return.
The payroll would be £2.50 per monthly employee plus £50 annual fee which would work out at £14.16 per month. So in total £63.16 - not that far off. This is for North Ayrshire.
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For 60 transactions I would estimate 2 hours per month which for a bookkeeper would be anything between £15 - £25 per hour so say £20 per hour so there is £40.
For the payroll would be £12.50 for the first employee and £2.50 for each additional employee per month so there is £20 per month and then the VAT return at say £50 per quarter.
So over the year £480 (12 x £40) for the bookkeeping £240 (12 x £20) for the payroll and £200 (4 x £50) for the VAT returns works out at £920 per year or £76.67 so £70 per month seems reasonable.
Though if was me I wouldnt be interested in this I would be quoting for
1. Bookkeeping
2. Payroll
3. VAT returns
4. Year end accounts
5. Self Assessment
6. Quarterly management accounts
Would depend on the turnover level but would be looking to price at £150-£200 per month or £1800 - £2400 for the year.
Thanks for your replies. The 60 transactions is based on 20 purchase invoices, the 20 corresponding payments and 20 sales invoices. There is no chasing of payments to be done. The client didn't mention the receipts so I should probably factor that in too.
I estimated my fee in a very similar way to Mark and estimated 2 minutes a transaction so therefore 2 hours a month to process the transactions. I think this would be more than enough time and would think that the bank rec for 20-30 transactions shouldn't take very long and I could include that in the 2 hours I've estimated.
I'm based in Warwickshire and aiming for £17-£20 per hour.
The client already has an accountant that does there year end accounts etc but doesn't do there bookkeeping. That arrangement suits me and I'm not looking to take over that side of things for the time being. I've trained as a management accountant and never worked in practice so I'm not yet confident in taking things further than bookkeeping, payroll, vat and mgmt account.
If your charging £17 - £20 per hour then where did the £70 come from for 2 hours work?
The time seems fine factoring in the 80/20 rule. From the sound of the work the reality I am sure will be closer to one hour than two but always better to err on the side of caution (and profit).
Also, you are considering £90 per month as you mention an additional £20 for travel.
£90 per month to process 40 transactions and a bank rec seems very steep to me.
Certainly if this was one of my clients and I saw them spending that sort of money (£1080) on a bookkeeper for that level of transactions I would bring them in house and halve bookkeeping fee's.
Personally I would think that £30-40 per month inclusive of your travel would be closer to what the accountant would let slide when they review the figures at the period end.
I should mention here that I cover Birmingham and North so perhaps a bit of a different world to the one South of Brum.
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.
I'm in Coventry so same neck of the woods. I would probably charge £50 per month all in but I wouldn't be wanting to collect the books, they can post them, scan and email them or drop them off. Obviously if the client was bigger I would make the effort. Having said that if you think they will be happy with £70/£90 per month then go for it, so long as they see you as adding value then it is a fair price.
Shaun, Sorry maybe I should have been clearer. I had worked out 2 hours for just the processing of the transactions. It's then payroll on top, which I was thinking £10-£15 per month and then also the VAT return based on £60 a quarter, so therefore £20 a month. So for all that's how I came up with £70 a month.
I'm grateful for all the responses, it's good to get your thoughts.
-- Edited by SunRising1981 on Wednesday 4th of December 2013 05:28:23 PM
