I would interested to hear others feelings about the comments I am about to make.
A friend admitted that he paid his cleaner £15.00ph, and his bookkeeper £12.00ph. He said the book-keeper only inputted the data (using sage), and never issued invoices (word doc, himself), or checked any of the suppliers invoices where correct. The cleaner however also did all the ironing, so was considered to be more skilled and justified a high hourly rate.
I have just done the VAT return for a client who keeps insisting on buying his supplies from Amazon. I estimate this quarter, he has saved about £50.00 buying the supplies this way, but I have charged an additional £75.00 for the extra time I needed to supply all the details of the missing invoices (dates & amounts), and I dread to think how much time he has spent asking for copies of each VAT invoice, as initially some of them did state "This is not a VAT invoice"!
Using a more expensive supplier (especially one who also gives 30 days credit), who automatically supply an invoice may have been cheaper in the long run.
Are we missing the bigger picture, by trying to save a few pennies, and in the end paying more somewhere else? Would many bookkeepers be better off becoming cleaners instead? What do you think?
-- Edited by YLB-HO on Wednesday 25th of June 2014 03:46:36 PM
It can be done as one of my clients (single, older male) who I do the bookkeeping for pays me the same rate for doing the cleaning and in many ways I enjoy the cleaning more. I can see where I have been and don't acquire a headache.
With regard to purchases from Amazon and E bay, I absolutely detest it when clients go of buying business stuff through here. No Vat Invoices, no paperwork, use the wrong card to pay for stuff, ridiculous names appear on the bank statement. Yes nightmare and I do warn my clients that they may think they are saving money on the purchase but it will cost them more in the long run if they don't come up with the paperwork etc.
A supplier offering 30 days credit is far more sensible even if a little more expensive.
Its an interesting comparrison that I fear is reflective of the mindset of many clients as they tend not to see value but rather consider the bookkeeper an overhead that they want to pay as little as possible for.
I'm sure that many reading this are paid less per month than their clients Sky subscription.
The issue is in perceived value. They may be getting an excellent service but because everything runs like clockwork the client doesn't realise what it takes to keep things that way.
To compound that many clients feel that they hired a bookkeeper because they felt that their business was not making enough to afford the services of an accountant so straight away the bookkeeper is seen as the economy option.
And as the icing on the cake, because bookkeeping is about compliance rather than business advice it is seen as an overhead that they have to pay for rather than a benefit that they want to pay for, so they will attempt to acquire the service for the cheapest possible cost.
Unfortunately in many areas the laws of supply and demand dictate that business owners will be able to find service providers willing to work at any price just to be able to find clients.
Bob (Bob Harper) raised similar observations as an interesting question (although raised it in totally the wrong way) a couple of years back. Bobs question was "Is bookkeeping as a separate profession dead?".
Now before jumping to an answer consider that bookkeeping ends at trial balance. Everything after that is accountancy. Could you make a profit if you had to tell your micro clients that you were not able to produce any financial statements, tax returns or give any advice?
Of course, neither ICB or IAB actually stop at bookkeeping and thats not a question in relation to what people with those qualification can do, it's a question in relation to actual bookkeeping as a profession rather than a profession that incorrectly refers to itself as bookkeeping.
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.
