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How to answer: How much is your hourly rate?

  • Member PM.Dip
  • Practice Licence
  • 117 posts
  • # 76337

Hi All

Following on from another thread this is a question I have been wanting to ask fellow members:

What do you say in reply to the common question 'What is your hourly rate?'

Any good suggestions on how to field this?

My honest answer is "£20-£40, it depends".  But this is a rubbish answer that inspires no confidence.  And by not answering straight away it can seem like you are avoiding the question!

Thanks

Andrew
kjmcculloch
  • 1159 posts
  • # 76338

My reply is "We don't do hourly rates.  Why would you want to pay us more for taking longer?  We give you a fixed fee for the whole job, or a monthly fixed fee if it's ongoing work, this allows you to better budget and know that you'll never experience any nasty surprises."

No surprises there I guess.

Kris 
Clare
  • Member PM.Dip
  • Practice Licence
  • 195 posts
  • # 76351

I tend to quote two rates, one for initial setup or one off tasks and one for ongoing work. I don't fluff, I just give them the higher end figure and then am prepared to negotiate if they want to. However it's surprising that many don't bother and accept my first figure. 

  • Bruton Young Bookkeeping


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sarah
  • Companion Fellow PM.Dip
  • Practice Licence
  • 1137 posts
  • # 76376

Hi Andrew

Just because you charge a hourly rate does not mean you are taking longer to the job.  It does not make you less honest then another practice who offer fixed rates.   Honesty and fairness has nothing to do with.  I have never overcharged a client by charging by the hour.

 Some questions and solutions can not be charged by how long it takes to do a transaction.  My clients are interested in finding long term solutions for various bookkeeping issues over years as their business grows and business changes to cope with the current climate.  

My clients do not want to negotiate every time there rear off the fixed price what is covers agenda.  I would be down at least 15K if I worked that way.   They email what they what and you bill them for it fair and square. 


Andrew if you have a reason for the charging the higher rate , then give the client a reason.  For example if it is once a year job . The stopping and starting of a small job and the loss of income clearly would  need to be charged at a higher rate.  All you need to say to the client for example is .   If I am given regular monthly work this rate would be reduce as discount for my practice appreciating the volume of work they give you.   

Our for example with one of my clients if I am training it is £30 to £40 a hour or if  I am doing some bookkeeping for them it is £22 a hour.  No you can not fix this because every month  there looking for something different in training  .  Their fees can range from 1000 to 2, 500 in a month,  it just depends how many issues arise.  The yearly figure has changed dramatically from one year to another so there is no pattern.  

I hope my clients are happy as I am pleased to be at the dinner next week as shortlisted practice.



Edited at 11 Nov 2011 05:21 PM GMT

  • Sarah Douglas C.FICB

    HouseTree Business Ltd 


  • Quote
gigagirl
  • 220 posts
  • # 76377

I am working off an hourly rate at the moment until I can get some more experience in Practice.  I am also very honest with my clients, I always work quickly and efficiently and charge them for the time I actually spend doing their work.
I'm quite concerned about fixed fees, I've recently taken on a client, and I'm up to 19 hours so far trying to clear up the mess, and I estimate I'm only about 50% of the way there.  Had I quoted a fixed fee - I'm sure I would have been in trouble as there is a million and one problems which are proving a real nightmare, which I really wouldn't have spotted before I actually jumped in and started the work.  Client is very happy though, he understands that it's gonna take a while and he is pleased with progress so far.
kjmcculloch
  • 1159 posts
  • # 76379

Andrea,

I think your post has hit on an extremely important point in the fixed fees debate.  That is that to offer a fixed fees service needs a whole new strategy for your business.  You can't just wake up one morening and say today I move to fixed fees.  There is a whole new way of thinking involved, a whole new targeting strategy for client aquisition.

You really need to tie down your processes and streamline everything, part of that is taking on the right clients and getting them to buy into the fixed fees systems.  You need to move away from thinking that you sell bookkeeping services. 

But hey, fixed fees are not for everyone, and neither should they be.  Just as I don't offer payroll service, even though I can, and others don't offer the same services as me.

Sorry to take the thread off on a tangent.

Kris 
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