Can anyone point me in the right direction. I am a qualified bookkeeper, setup my own practice a few months bank. I have just had my first job i need to quote for and I am a bit stuck.
One person owns 2 companies, self employed, one is a property company and one is a dry cleaners. They need quarterly VAt, monthly payroll for one person for both companies.
The third company is LTD and need annual returns, Payroll one person and VAT returns.
I have not seen the amount of paperwork required but wonder how most would price this.
I would first want to see the paperwork starting with the bank statements and invoices which should be the easy part for the client to point you towards but you would be surprised how often clients are unable to organise getting even what should be the simple stuff before you. If they can't it's a big warning sign and walk away from it as it will turn into nightmare of chasing paperwork.
Once you have some idea of the voume of transactions per month use that as a basis to calculate the number of hours that you will need to work each month to process that number of transactions, add an hour a month for each business for payroll and an hour a quarter for filing the VAT and then multiply that by your hourly rate and thats your base figure but don't quote that yet. Take a look at the accounts that you have access to and see what your predecessor charged. Is it close to what you have calculated? If not, why not? Have you missed something?
Clients are always looking to pay the same or less so ensure that if you feel that you need to increase the rate previously paid be ready to justify that.
Others may mention value pricing to you which is a price per job but under the bonnet the person advising you will have calculated their quote as a rate per hour ensuring that they meet or beat the minimum that they set themselves for their time.
You say you are a bookkeeper so I don't think that you should be doing the accounts for limited companies. That aside good luck with the potential gigs and welcome the forum.
kindest 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.
Thank you, I think looking at their business account will be a great start.
Why would you advise on not doing the accounts for a Ltd company, this was covered in my training and yes it does seem all a bit daunting at the moment but surely it can be something that will come more easier as I take it on. I have now started up my own ltd company and my son is ltd so have already increase my experience but yes their seems a lot to learn.
I was going to look at pricing on a different angle given you said you had no access to their paperwork, but it is only on reading your second post that I have now realised you are, or may be, looking at also providing the three businesses with year end accounts and their tax planning/tax returns. From your first post you mentioned bookkeeping which is traditionally up to trial balance, although of course some of the training companies take you a little way beyond this.
Might help to know who your training was with/level achieved (helps with pitching answers) and if you have any other exams/studies that you have moved on to or planning to take.
The other issue is of course how easy it is to get to the paperwork and answers you need considering you have had some initial discussions. Get yourself a set of questions and discussions points for each type of entity you will be looking after and product you are covering, some will be used in an initial fact find and some for your next meeting to get the detail you need, but a list ensures you don't forget anything. Just to add to Shaun's comments, don't forget to find out about future plans or you could end up woefully under pricing a job. Also when did their last incumbent finish working for them (and why?).
Out of interest what software are you using?
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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
I always ask who was their previous bookkeeper and find out why they ditched them, sometimes it can be because the bookkeeper has retired, so that is fine. The ones to be cautious of is where the bookkeeper has actually ditched them, usually because they are difficult to work with, don't pay their bills etc. I have had a couple of bad ones in my time so I now ask loads of questions. Also I tend to meet them at their offices if I can then you can see how tidy they are and what their filing is like. If you go there and there is paperwork everywhere and not a folder in sight, decide if you really want a messy one! It can be rewarding if you get them straight but also very frustrating at times.
I always charge an hourly rate and also a separate quote for payroll. I have to take into the fact their with payroll there is a yearly charge for my software which I apportion out between the clients, so always lots to factor in.
I always ask who was their previous bookkeeper and find out why they ditched them, sometimes it can be because the bookkeeper has retired, so that is fine. The ones to be cautious of is where the bookkeeper has actually ditched them, usually because they are difficult to work with, don't pay their bills etc. I have had a couple of bad ones in my time so I now ask loads of questions. Also I tend to meet them at their offices if I can then you can see how tidy they are and what their filing is like. If you go there and there is paperwork everywhere and not a folder in sight, decide if you really want a messy one! It can be rewarding if you get them straight but also very frustrating at times.
I always charge an hourly rate and also a separate quote for payroll. I have to take into the fact their with payroll there is a yearly charge for my software which I apportion out between the clients, so always lots to factor in.
HTH
Or indeed why they ditched their previous bookkeeper - sometimes due to the clients not liking what they hear.
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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
Cheshire wrote: Or indeed why they ditched their previous bookkeeper - sometimes due to the clients not liking what they hear.
And following those thoughts, another issue there of course is that the incumbant is not allowed to respond to the professional ettiquett letter unless the client gives them specific permission to do so (#1). What about the scenario's where the incumbant does not even know yet that the business owner is fishing for a replacement? Your letter which they may not be permitted to respond to without permission is going to tip them off that they are on borrowed time.
Sometimes I've found that just seeing the clients face when you tell them that you will be writing to their existing financial professional (bookkeeper/accountant delete as appropriate) and they need to give their incumbant permission to respond is enough to tell you to walk away!
#1 in which case you should not take on the client
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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.
Jowest31 wrote:Why would you advise on not doing the accounts for a Ltd company, this was covered in my training and yes it does seem all a bit daunting at the moment but surely it can be something that will come more easier as I take it on. I have now started up my own ltd company and my son is ltd so have already increase my experience but yes their seems a lot to learn.
Hi Joanne,
as Joanne (Cheshire) says, which professional body was that training with and do you come to the table with prior experience in this field? Experience generally overrides the qualification that you practice under. For example there are people with some quite serious accountancy qualifications who practice under the ICB/IAB as flags of convenience but that does not mean that the ICB or IAB trained them. In those instances there is generally no issue with them preparing limited company accounts and tax returns (unles they have not stood down from their primary body). Similarly there are people who have working in practice for years who become freelance bookkeepers. Again there is no issue. The issues occur when people have taken a qualification without any experience and do not realise how much they do not yet know.
Completing self employed returns is somewhat more forgiving to lack of experience than servicing incorporated entities. CT600's and the regulations behind them are considerably more complex than SA100's. Also, in addition to the CT600's with company acounts and companies house returns there is a lot of company law and accounting standards sitting behind them. Some bodies will teach the minimum that they think that they can get away with and then leave it to the individual to discover all of the things that they have missed from their qualifications so as joanne indicates, who you qualified with and the experience that you come to the table with will effect the services that you offer no matter what the professional body that you practice under says that you can do.
Legally of course there is nothing to stop you from preparing accounts and tax returns for incorporated entities but you need to read the small print of your PII which will state that you are only covered for services that you are qualified and experienced to perform. That "and experienced" is the PII companies get out of jail free card.
In the case of higher bodies they know that and make their members jump through burning hoops to get the required verifiable experience before one is allowed to offer their services directly to the public.
Think about it this way, in the event that your advice or actions cause a client to suffer financially a court of law will expect to put the client back in the position that they would have been in had the mistake not occured. That can be incredibly expensive even with the smallest of clients.
From the courts perspective you are responsible for what you knew, what you should have known and what you should to have done about it.
If you are only acting up to trial balance then that is within the remit of the role of a bookkeeper and your PII will cover you. If you go beyond trial balance (for any sort of client) you are working as an accountant and you will be expected to have the knowledge base of an accountant for the type of client that you are handling.
I really don't want to deter you from this but just always bare in mind that just because legally you can do something does not mean that professionally you should do it.
kindest 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 too charge separately for payroll. In fact was pondering on some of the Chartered Accountants I know and they all do the same. One even still charges for year end payroll and its not an insubstantial amount.
One thing is if you cannot pin down the amount of work on the bookkeeping front I would suggest hourly like Amanda. I had one that was like pulling teeth getting info, they had said 5-6 hours per week, but it absolutely snow-balled as they ended up completely changing business direction, set up two other Limiteds and I ended up working almost a 40 week just for them (not good on so many levels!) They actually needed an FD not a bookkeeper. So just one to be mindful of.
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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
I have tended to lump the payroll into the bookkeeping for a couple of clients, but this will change from April next year, when the payroll will be separate due to AE considerations.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
I was trained with the open university and the client has never used a bookkeeper or accountant, his daughter was doing it and now had a baba
y. so doesn't have time.
Yes I am qualified as a bookkeeper and I could jump into AAT at level 2 accounting I have been told but i cannot get experience and until I do the work.
Hi Joanne I've been told I am as a subtle as a brick, but am too long in the tooth now to change, so will just say it and hope that I don't offend as it's meant not to.
Level 2 AAT accounting is entry level bookkeeping, as it covers the basics in bookkeeping such as double entry, which are of course the corner stones to Accountancy, so people with no experience at all start at this level.
So, to be honest someone suggesting that you could jump in at that level is perhaps selling you short.
With having done the OU course you should have the knowledge to start at level three and you can easily test this theory by doing the skills check on the AAT website. You don't need to join them, just do the check (and print out the response).
At level three the AAT now offer their bookkeeping level.
At level four it's Accountancy, although very much a long way off the chartered guys.
You will see from many posts on here that ATT (tax exams) are mentioned after AAT so that people can really help their clients.
The reason I suggest the AAT is that they cover the completion of Accounts for sole traders and Limiteds as well some tax at the higher levels in greater detail than you will have touched on, so my suggestion is you perhaps look at bookkeeping up to TB whilst running the AAT studies alongside your work (and perhaps the sole trader accounts) to bolster your training.
I totally agree with Shaun's stance about the Limited companies until you have AAT level four under your belt, or at the very least have done your own Accounts after the first year, with a friendly Accountant alongside to ensure they are correct, and with the appropriate level of PII in place (last thing you want is someone suing you and you losing your house).
Also, with the pick up of these new clients bookkeeping alone you will have a ton of stuff to learn, I'm sure, if these are your first clients.
You have the intricacies of the property sector, which is rapidly changing, with some considerable changes in the tax acts recently and more changes afoot (be careful what info you glean from google searches, especially given the changes), plus a high risk business ie the cash based one, plus we know not from the limited. Added to that....how to do the VAT in practice (which schemes are they on, they might all be different ones). Add to that Capital Allowances, one where many go wrong - Basis periods and a few other things. Before you even get into the Limited Aucounts and Ct 600.
What I'm saying is, you need to build in quite a bit of breathing space to learn as what you have already learnt will completely pale into insignificance .....the real learning starts now.
Also factor in that most Accountants pass on work to AAT qualified bookkeepers, if you are looking for referrals, this is another reason to go down this route. But perhaps by introducing the limited in to an Accountant to do the final accounts might help you get work from them in the long run, as they will see your work and judge you on that perhaps,
Just as an aside, what software are they using and do they expect you to use theirs at their premises? Or a re you moving to yours and working from home and do you know how to move everything onto a new system/what you need? Just something else to perhaps factor in.
i know a lot of this doesn't relate to the fees to charge, but across all the posts there is I hope some good advice for your starting with your first clients. We have all been there, daunting yes, but loads of fun too, unless you don't allow yourself the space for CPD. On that score, if you haven't read the. VAT guide yet, I would make a start. Boring, yes, send you to sleep at night, absolutely, but a great start to understanding and a better read than the VAT act itself!
This is not meant to put you off, but to help you get to the stage where you will be in a position to get that Limited co experience.
edited for typos, might be more
-- Edited by Cheshire on Wednesday 21st of September 2016 09:04:51 AM
__________________
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
Also hi Amanda. 
