Its a difficult question as there are so many more criteria than simply location such as density of competition (the number of them, not how thick they are although that also helps on fee levels, lol).
The average as best as I can judge for hourly based work seems to be around the £15 mark although some work for much less than that.
I would say that there is a top out of around £25 per hour where the cut over between bookkeepers and accountants diminishes to the point of allowing the accountant to handle the whole end to end process.
There are some bookkeepers who advertise higher hourly rates than that but I doubt very much if they get any takers even to the point of negotiating.
Where you charge by the hour clients will be attempting to get you to do as few hours as possible so if possible its better to charge by the half day or full day which can actually squeeze the price up as its easier to ask for £80 for half a day than £15 per hour for 4 hours and you get an extra £20 out of it.
There is of course squeeze the other way in theat with first jobs you may agree to less time than the job requires for a fixed half day which ends up as a full day but only being paid for half of it. Make sure that you kow what you are signing up for before going down that path.
For a business plan I would perhaps go with £15 and hope that you can squeeze it up to £20 in the real world.
I would also be prone to starting your plan at zero income for 1 to 3 months and then increase by half a day a month for a year and stop when you get to five full days which may actually end up as a mix of clients from an hour a week to a couple of days a week or even a week a month.
My suggestion about the half day increments is purely for the plan to give something to aim for that is achieveable.
Of course, your actual hours and rates will differ from plan and this is at the moment just an up front guess at where you will be after 12 months.
hope that helps,
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.
Again, thank you again for your guidance... It is obviously daunting for me as a newbie stepping out into the world of book keeping and I do want to get this right so it's really nice to know there is someone out there willing share their knowledge to the up and comers.
I disagree that geographical location has any bearing on the price that can be charged. I recently delivered an input on pricing to the bookkeepers conference on pricing and provided this information again through a webinar. The main takeaway point of this was that you should always offer a range of options to a client rather than one price.
If you do this really simple thing you can get phenomenal returns. As an example, I recently took on a client for both bookkeeping and self assessment at over £100 per hour. You may think that this is unachievable, or maybe a one off? I repeated it last week, and got another client at around £90 an hour.
I should emphasis here, my services are no different from any other bookkeepers. Before implementing this new pricing structure and delivery method I was still achieving in excess of £40 per hour with many clients. I offer remote services and have client from as far north as Aberdeen and as far south as Kent which is why I say that geographic location has no real bearing on the price.
For me there are three parts to getting a high hourly rate. Firstly, you need to streamline as much as possible. By making full use of all available technology and systemising your work you can make sure that you get consistent results with as little effort as possible. Secondly, you need to know who your clients are, and more importantly, who they are not. If you want great returns you need to be very confident about this. There are many people who shop on price, but these are generally not going to be your ideal client. Thirdly, it's about how you deliver your price. You want the client to choose you and not start comparing you to others. By presenting your prices in a certain fashion you can minimise this risk.
are we talking value pricing here. i.e. you didn't quote per hour but quoted for a job that you were able to do very quickly so if you took that on an hourly basis then the rate is really good.
Equivalent of selling the client on the idea that it will take three hours of your time but your processes mean it only takes an hour. Ta dah.
it works if you are doing work off site but not if you are doing bookkeeping on a pseudo temping basis as themn of course they can see what you are doing.
On the geographic location its all down to supply and demand. I find that most clients that I deal with want face time rather than distance work (although I do have a few distance clients) and where they want to be able to see you face to face then to a certain extent local competitive rates dictate prices. You don't need to be cheaper than everyone else but you shouldn't be ridiculously more expensive. I don't think that you could quote those prices for the work on a clients site.
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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.
My view is that its part of our solutions in that for some clients we quote for a job in the hope of making a better return and others we quote by the hour.
For the business plan though I would stick with the by the hour approach and if you can get any roles where you can use value based pricing techniques then thats the gravy.
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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.
Hi Shaun,
This is where "defining your ideal client" comes into it. You're right, I never work from client premises because they are not my ideal clients. Neither do I work with price sensitive clients. Those clients who want you to work from their office just want a cheap employee much of the time. That's not what I am.
I don't sell time at all, my ideal clients don't want to buy time, they want to buyr results so that's what I sell.
The system I use isn't really value pricing (let's not go all Bob) it's menu pricing. It s based on the fact that if you provide one price then more often than not its the wrong price, so we provide a range of prices and let the client choose.
I still maintain that geographic location doesn't dictate prices, your ideal client profile does. If you're happy with £15 an hour job, that's the clients you'll attract. If you go towards the £40 an hour then that'd who you'll get. There's more than enough to go round at both ends of the spectrum.
Kris
I try not to charge a fee per hour but obviously I've got a ph base to determine pricing. As Kris says you can up that by streamlining and automating what you can (which I've nowhere near mastered lol) and I have achieved £60 an hour (Simple tax return that I have a set price for regardless of the time involved) By the same token I was working for one client for £5 an hour after totally underestimating the time involved!!
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Thank you Shaun, Kris and John for your views on this matter it does sounds like billing per job rather than hour might be the way forward but maybe to have an hourly rate for the production of a Business Plan is good in order to give an idea of expected income.
You have certainly given me something to think about.
Your views, opinion and guidance in all things book keeping is of great value to someone such as myself as it is daunting going from the theory books to putting it all to PRACTICE in the real world.
Oh John - £5 ph. Bloomin heck man, thats horrendous. Have to take the opportunity of the slightest change in what you agreed to do to shove that price back up to where it needs to be. Hope youve now increased that one - not the easiest thing if it was so wrong in the first place.
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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
After a price review, we renegotiated to £5.50 an hour!!!! Only joking! It wasn't too drastic, I estimated 2 hours and it ended up being 5. Not the guy's fault, it was a new start up and I got it woefully wrong. We adjusted it mutually at a later date.
PS For those doing the maths, my "hourly" rate has increased since then.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
