Fees - The Book-keepers Forum (UK)

rachel_mclean · Guru

Fees

Shamus · Forum Moderator & Expert

Hi Rachel,

sorry, only a quick response this evening so won't cover the rates yet.

The commonality between Joanne and Myself is that we are both bankers. Accountancy's not quite so distant cousin.

My qualification is ACCA. I don't tend to use my letters on here as I don't want to differentiate myself from anyone else here.

Yes, MAAT MIP's are accountants. Combining that with ATT is an excellent combination for an SME accountant.

Sorry that its only a quick one, hope to catch up more tomorrow sometime.

Shaun.

Leger · Master Book-keeper

rachel_mclean wrote:
Hi Rachel
Just my thoughts for perusal, I'm sure other peoples mileage will vary.

For the hourly rate I am charging between £15-£18 an hour, all new clients over the past year I have charged £18.00. I have a few new ones that are fixed - they are only small jobs (CIS subcontractors) so I was confident in estimating the work involved and it has so far worked out well of on average £23.00 an hour which I am quite happy with. It's the others I have no idea how to estimate and get a good fixed fee for, businesses that I don't know so much about. If I can get them to tell me what their accountants bill was for the previous year than that helps but how do I even approach that question if they don't tell me.
I only charged fixed fee, but agree you can get it wrong. One of my early clients equated to £5 an hour for the first year, as I totally underestimated how long it would take. I try to aim for £15-£16 an hour for bookkeeping, but the majority of my work is in South Yorkshire, and it's about right for the area. In your area I would be looking at an average of £20 an hour.
For accounting I aim at an average £25 an hour which I didn't realise, until after a discussion with Johnny some while ago, I was actually charging that.
I try to estimate how long the job will take me when it comes to working out the fixed fee, and so far managed to make the £5 fiasco again.
The clients I have had since the beginning around 8 years ago I have moved up from £15 to £16 an hour this year - is it unreasonable to put it up by a £1 a year now? Definitely not.
There is a lot I still don't know about and am unsure about (as you would have probably noticed from masses of question posts) but now I am trying to get AAT qualified to be able to complete accounts for limited companies. Once AAT qualified (and then back to finish ATT) and practising will I be able to increase fees to new clients? and what kind of fees are reasonable for an AAT qualified person with a lot of experience?
From my gleanings, accountants charge an average £25 for bookkeeping, and between £40 - £100 an hour for accountancy work (I would imagine that higher figure is for those in chartered waters (pun intended)
Once AAT qualified can I call myself an accountant rather than a bookkeeper? I know anyone can call themselves an accountant and I do accounts and tax returns for a lot of people I don't feel I can say that I offer accountancy services until I have the AAT badge.
I'm exactly the same, I do accountancy work, but can't justify calling myself an accountant unless qualified.
I think what has made me think about it is that I have seen a couple of accountants bills over the last month that charge hourly of around £40.00 an hour, this is for the same work as me and has taken them around the same time...maybe a bit quicker. I am just thinking when will I be at the stage of being able to charge that kind of money. I don't want to rip people off and I want them to go away thinking that they have a good deal but I would also like to earn more soon! I feel I have gained a massive amount of experience in just this past year and have come a long way since the beginning and I've learned a lot...mostly due to the help I get from this forum!
Will I have to be as knowledgeable and experienced as Shaun and Joanne (and the others like them) before I can even think about charging this money? BTW Shaun and Joanne - I assume you are both 'accountants' what kind of qualifications did you do?
You'll be surprised to know Joanne only goes to trial balance, yet (AIUI) has developed a niche that allows her to charge way above the market rate (only based on postings you've made Joanne, so apologies if I've got that wrong) so it isn't necessarily based on having the right qualifications. I'd also say she could no doubt put a few accountants to shame knowledge wise.

Amanda · Expert

I think it all depends on which area you live in.

I am in the South East and get away with a lot more than those fees for bookkeeping. Your fees Rachel I was charging a few years ago. The key is don't under value yourself, your are worth it. I tend to do hourly rates, although some other work I do I get in excess of £40/hour for, and no its is not accountancy work, I leave that to the accountants in my area, who charge out minimum of £45/hour bookkeeping and upwards of £80/hour for accountancy, some charge well over £120/hour for for their work. I know of one accountant who charged £75 for a phone call and his client paid the bill and wasn't worried about it, they were pleased with the service and the response, the call was only 15 mins long!

People will pay good money for a good service, so don't worry about putting up your fees once a year by a £1 hour. I have put it in my letter of engagement now that fees are subject to review once a year. Sometimes I have put them up by £1/hour, sometimes a lot more than this, it depends what I can get away with. I try to do price increase letters each year.

I had one really bad client (ex client now), and I used to have to phone him at least 10 times for my money, it was always promised and never arrived, so each time I did his VAT quarter I use to add another £20 on his invoice to cover my time and phone calls, he never knew I did this as I just incorporated it into the bill.

Be brave with what you charge out and say it with a smile. My attitude is if they don't like it they can go else where, I'm here to make a living the same as the next person. The key is the more you charge out the less hours you will have to work to make the same money as before.

HTH

Cheshire · Master Book-keeper

Hi quick one as I am BOMBED!!!!! At this stage, just to say a massive thank you for the compliments, they really cheered me up today. Back later hopefully.

David Ballantyne · Senior Member

Hi Rachel,

I am not actually in practise, however it is a topic I have an ongoing interest in.

Are you aware of Burg's MIP fees survey on the AAT forum? You can find it here.

This accountancy firm also gives a fairly comprehensive fees schedule on its website. Click here.

Kind regards,

David.

rachel_mclean · Guru

Thanks David, I completed the survey!
The link to the fees the accountancy firm prices were interesting. I was completely surprised they only charge £12.00 an hour for bookkeeping and they're chartered accountants.

Thanks for sending those links, they were really useful.

I was very happy to read your reply Amanda biggrin biggrin there are some I do get away with charging quite a bit more at times and then like John there have been a few that I've almost done for free - usually in the first year I get them then it improves the year after.

Accountants in Cornwall charge high fees too anything from £40 to £80.00 an hour (only £80 for accounts though...I think!)

Other bookkeepers around this area charge from £14.00 to £20.00 an hour, the ones that do accounts to charge £25 - £30 per hour.

I think I may start splitting it and charging £18 for bookkeeping and £25 for accounts if it's not possible to get a set fee.

John...what qualifications are you/will you be doing?

Thanks

Rachel

Shamus · Forum Moderator & Expert

I think that you're comparing chalk and cheese Rachel if you try to tally fee's charged by bookkeepers who offer accountancy services with qualified accountants.

I would say those fee's of £40 to £80 per hour for a qualified practicing accountant with one of the top table qualifications are about average rather than high.

Professional qualification is not cheap to either gain or maintain as one is required to maintain constant verifiable continued professional development to a level expected of the qualification. There are minimum PII levels of the higher of total fee income of the firm plus £300k or 25 times the highest fee income of the firm if greater. You can also only get your insurance through selected approved providers. Also add to that annual professional body fee's of £662 and you can soon see why the price differential occurs.

Just thought that I needed to bring balance to the discussion before people start thinkin that accountants fee's are too high compared to bookkeepers offering accountancy services.

hope that helps,

Shaun.

Leger · Master Book-keeper

rachel_mclean wrote:
John...what qualifications are you/will you be doing?

Well, I did start AAT last year but never got very far due to personal and work pressures, and abandoned it earlier this year temporarily. I plan to start again in September and ideally get the first two levels out of the way by the following September, then do level 4 at college.

Ideally, like yourself, I'd like to do the ATT, by which time I'll have reached retirement age biggrin

Cheshire · Master Book-keeper

Hi Rachel
I consider and market myself as a bookkeeper and as John states I only do up to TB and indeed only for Limited companies. This is a very deliberate choice (#). I have done many a course and exams across my career and indeed still doing some, latest one I am studying is ACCA, although I probably wont do all of them and its a bit for (sort of) fun, not with the aim to be practising at this level given Im such an old bird (52) and looking to retire early and Ive had a long (very long, 28 1/2 year) career in Corporate Finance. So Ive covered a real mixed bag - BEC with 2 years Accounting, Law, AAT and ACIB (Chartered Banking, including Accounting - Not to be confused with ICB in ANY way). As Shaun said - Banking/Accountancy in certain areas/at the right levels are close cousins. Plus Ive ripped apart the management accounts, forecasts, businessplans and indeed Audited/Annual accounts of practically every mid and large corporate in the North West as well as a few further south, ok probably about 80% of them over the years, which is where my love of the 'Limited' comes from (although Ive also dealt with some very large plcs and institutions).
# the deliberate choice was down to the above dealings in corporate, plus me just taking my first two clients (Limiteds) on as a favour to someone, to help them out. It was just a hobby to me, not a business, so I viewed it as not wanting the hassle factor of one man bands. But its snowballed since then. Trouble is - its got too much so now I dont have time for any study, even with my son helping me out!

John is correct in that I do provide a bit of a niche for a couple of clients which allows me to charge more, including doing some agent work for an ex footballer. But it was their work right from the get go that made me focus on the charges as I discovered that 'admin' services people get paid more than bookkeepers. That I think is wrong, when you have to know so much about tax and VAT etc, so its about placing a value on your services that is right for you. I have a 'I wont get out of bed for that fee' limit and will not go beyond it, would rather let the business walk away, even when I only had two clients I had that view. Value yourself because if you dont then no-one else will.

I have a mix of per hour and fixed rate clients. There is no set formula for which way I jump, other than absolutely knowing I am not going to be stung on the fixed fee side. Thats a hard one to judge and only you can know based on your questions of clients and having a good delve into their business (if they will let you) before you quote. Im certainly glad I didnt go down the fixed route for a client that started out as 6-8 hours per week, but quickly snowballed into almost being a full time FD as they opened 3 other connected companies and went on a massive expansion drive. Plus the two with major Sage issues!

My last hourly fee increase was by £4, although I accept I probably wont get away with that all the time, so go in higher - you can always come down. Face to face is best, but not always easy, but you can gauge their reaction and pull it down before it walks if needs be. I also charge in batches of 5 minutes, so clients make that call take a little longer than just a 30 second question....but at least if they do ask a 30 second question, Im being remunerated for having to be interrupted and getting my head back round what I was doing!

Have to agree with Shaun on trying to compare apples with pears type view. When you see what other Accountants charge - check out their background. What qualifications do they have. You have seen the arguments raging on here Im sure about what is delving into Accountancy territory! Just to give you a flavour.... I know of one MAAT MIP who charges £40ph, which I think is low for doing Accounting work. But at the other end of the scale , the cheapest ACCA I deal with charges £100 per hour, with it ranging to double that and some. I have a client who has a partnership ( I dont deal with) and his (ACCA) Accountant charges him nearly £4k per year for what are relatively straight forward accounts for just one of his small businesses. But he is happy to pay as all his businesses are cash based/risky so are often the target of HMRC inspections. He has had a couple himself but was safe in the knowledge that they had no findings due to using this particular accountant who is a very thorough/find every penny kind of guy who had also worked for HMRC as an inspector. One of the ICAEW Accountants I know charges through the nose for blinking. or so it seems. Move and there is a fee. He has a lot of clients.

Oldies ALWAYS moan about price. That will be me soon Im sure.

rachel_mclean · Guru

Thanks for your reply Joanne, it's really interesting to see what everybody else's background is. I was surprised, because of your answers on the forum I assumed you were a chartered accountant.

I do wonder how you fit it all in! I work full full time, study and have a 3 year old and I struggle with that.

Thanks for all the info on what others charge, it's good to know that all the hard work will pay off in the future and I can charge good money when I have a few more years behind me.

John, you'll breeze through the AAT!! I'm on my last exam (level 3) and I've only put in 10-20 hours study for each exam a week to a couple of days before the exam and I've managed passed them, I have done it to pass the exam rather than learn everything inside out though. So you'll be able to do it much quicker and easier than me. Will you do level 2 as well? I thought you might skip that, I think it's all basic bookkeeping....it would be like doing the ICB exams all over again disbelief . I've got the costs and revenues next Monday, this one I've left until last, it's the one I'm least interested it. I think that may have been a mistake!! soon see next week. I'm trying to get it done so I can start level 4 by September so I don't have to do the new syllabus, I'm really put off by the sypnosis exam at the end, there is no way I would be able to remember enough after all the exams to take another one at the end that covers all the units!

Thanks again everyone, this has been really useful

Rachel

Princess · Senior Member

I'm in the Southeast. When I started a few years ago I charged £20 an hour for bookkeeping. Then I went up to £25 and didn't lose anyone. Now all new clients are taken on at £30 an hour purely because I have enough work so new clients have to be worth my while. I will probably increase the £25 an hour clients to £30 when I have the guts to write the letter. I talk to other local bookkeepers to find out how much they charge. I might be a bit more than them but not a huge amount. I'm MAAT.

kjmcculloch83 · Expert

At The Alliance, we believe that all professional bookkeepers in the UK should be charging at least £35 per hour. This demonstrates the professional service that we offer, and the skills and knowledge we have accumulated.

I had my boiler services a while back. The guy was in my house half an hour and charged £75. I didn't bat an eyelid, but it did make me consider why one professional is apparently worth so much more than another. I would encourage you to consider the value you offer to the client (don't worry Shaun, I'm not going to go all Bob)

Before you say, not in my area. Can I just tell you that I charged driving instructors from across the UK £40 per hour, so it can be done. You just need to understand your ideal client and how you can solve their problem.

Kris

CLH · Veteran Member

I was having a similar discussion with my daughter the other day. And it occurred to me that even my window cleaner charged the equivalent of about £30 ph!

kjmcculloch83 · Expert

A lot of pricing is to do with self-confidence. But I would suggest you probably don't want to be cheaper than the window cleaner! :)

Shamus · Forum Moderator & Expert

But...

if an accountant is offering services for £35 per hour why would a business use a self employed bookkeeper at all?

If an accountant is charging a client (say) £40 per hour where is the profit in them subcontracting the work at £35 per hour?

Is this not just telling accountancy practices to hire more AAT qualified / part qualified bookkeepers at £10 to £15 per hour and eradicate use of self employed one man band bookkeepers completely?

Businesses use bookkeepers as cheaper alternatives to accountants. The closer that they get in terms of fee level the less likely the business owner is to see any benefit in paying the same fee level.

The only time that I could see that working is where there is a shortage of accountants in an area but the reality is that wherever there is sufficient business you will find a surplus of accountants vieing for it.

It is unfair that people with few skills (such as window cleaners) are in some instances able to command high fee rates but they will also find that ease of entry to their market will eventually drive their prices down.

As such, my advice to bookkeepers would follow the principle of your arguement in that one should not sell themselves to cheaply but I would temper that with also advising people to be careful not to price themselves out of the market.

-- Edited by Shamus on Sunday 17th of July 2016 06:33:06 PM

Cheshire · Master Book-keeper

kjmcculloch83 wrote:
Can I just tell you that I charged driving instructors from across the UK £40 per hour
Kris

Just to clarify - are you providing bookkeeping or Accountancy services? Just to make myself clearer - are you just effectively doing his tax return and providing a P&L and Balance sheet from a bag of receipts type of scenario for a one man band?

kjmcculloch83 · Expert

In this instance it was both bookkeeping and accountancy.

kjmcculloch83 · Expert

Shamus wrote:

Businesses use bookkeepers as cheaper alternatives to accountants.

I disagree with this, we should not be seen, or see ourselves as accounting on the cheap. That's not what bookkeeping is about. If you find the right client, and effectively solve their problem, price doesn't really come into it. There is no market rate.

I can show other examples where I have charged £130 per hour for bookkeeping (and accounting) work for a sole trader. This is not unique, we have many members telling us the same thing.

It's about finding the right client, systemising well, delivering an effective solution to a problem and doing it well.

Kris

Amanda · Expert

HI Kris,

Like your comment about Bob.

It was a long time ago that Bob was on here talking about value pricing! Where has he gone now?...

kjmcculloch83 · Expert

SHHHHH! For goodness sake Amanda, he'll hear you! :)

Shamus · Forum Moderator & Expert

kjmcculloch83 wrote:
Shamus wrote:

Businesses use bookkeepers as cheaper alternatives to accountants.

I disagree with this, we should not be seen, or see ourselves as accounting on the cheap.
But is that not where the likes of ICB and IAB have gone, they do not stop at trial balance but rather go forward into accountancy territory using lower price to win market share.
The other weapon in the arsenal is the ignorance of the various qualifications of the public so the assumption is that anyone offering accouting services is an accountant.
That's not what bookkeeping is about.
Turning that on it's head it's actually a good question. What is bookkeeping about? To my mind I go with the FRC's definition that they used when describng the work of the ICB that bookkeepers work up to trial balance.
If you find the right client, and effectively solve their problem, price doesn't really come into it. There is no market rate.
I agree with this. The disagreement is over a bookkeepers ability to command the sort of fee's, constantly, that you mention if the client knows that they are not actually an accountant.
I can show other examples where I have charged £130 per hour for bookkeeping (and accounting) work for a sole trader. This is not unique, we have many members telling us the same thing.
I appreciate that some bookkeepers such as yourself have effectively and very successfully moved into accountancy via a lot of hard work and additional study (You also did an HND in accountancy and business didn't you?), but for the bulk of kitchen table bookkeepers I do not believe that the sort of rates that you are stateing are achievable on a day in day out basis and to set those as an expected goal will see the bookkeepers either without work or doing work beyond their skillset.
It's about finding the right client, systemising well, delivering an effective solution to a problem and doing it well.
Agreed again. I find myself agreeing on some aspects of this and disagreeing on others. (well, it is a forum after all!). The issue with this may be that you trained as a bookkeeper and identify yourself as a bookkeeper even though your further studies have long since superceded your initial training.
Its great for bookkeepers to aspire to emulate your obvious success Kris but at the same time I hope that my words of caution over setting base rate expectations too high (where people are looking at hourly rather than job based rates) are heeded as I would hate to see our readers pricing themselves out of the market.
Kris

As always the above is meant only constructively. I do not think that we fundamentally disagree that too many bookkeepers undervalue their services but at the same time I believe that its quite a fine line between finding the right cost structure and having a lot of free time on our hands.

What I would advise others to do who are thinking of attempting to replicate your success kris is to very much take a leaf from your book and realise that the bookkeeping qualifications alone are an innadequate end point and to continue one's studies into accountancy to help enhance the skills and confidence to develop one's own business and the businesses of those that we represent.

As with yourselves I've wondered about Bob as he also disappeared from Aweb as well (He was getting as much, sometimes more grief there as he was here).

kindest regards,

Shaun.

Leger · Master Book-keeper

rachel_mclean wrote:

John, you'll breeze through the AAT!! I'm on my last exam (level 3) and I've only put in 10-20 hours study for each exam a week to a couple of days before the exam and I've managed passed them, I have done it to pass the exam rather than learn everything inside out though. So you'll be able to do it much quicker and easier than me. Will you do level 2 as well? I thought you might skip that, I think it's all basic bookkeeping....it would be like doing the ICB exams all over again

Thanks for the vote of confidence Rachel. Although I'm pretty sure L2 will be stuff I already know, I would like to still do it, partly to see i AM doing it correctly and also to see if there are some things I could do in a better way. But mainly its the L4 stuff I'm interested in, which I want to start next September.

MarkS · Expert

kjmcculloch83 wrote:
It's about finding the right client, systemising well, delivering an effective solution to a problem and doing it well.
Kris

Sounds very like the AVN mantra (which I am now a member off)

1. Identify your ideal client (dont just take on anyone)

2. Systemise everything (so everyone in the firm can do everything to the same standard). Also makes the firm more efficient (online accounting). We are shortly to move to paperless working papers which staff reckon will free up about 20% of time.

3. Market yourself as solving problems (ie show the benefits not the features of engaging you).

We have been using AVN's pricing tool over the last 9 months or so and it consistently gets us higher fees (20% - 30%) to what we used to get. Ok we wont sign up every potential but we arent really interested in working with clients whose main reason for choosing us is in terms of price. We would rather compete on service and proactive advice.

We are also to start working with our largest client shortly to identify ways they can proactively grow their business. This is being charged out at £500 + VAT per day. We will probably work with them a day or so a month over the next 6 months. Much better doing this than a sole trader who would only pay £200 - £300 + VAT.

VinceH · Expert

Another case of jumping in while too busy to participate properly, but I saw this...

"2. Also makes the firm more efficient (online accounting)."

And thought 'What!??!!!11eleven!?'