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Fixed Pricing - Advice

  • Member PM.Dip
  • Practice Licence
  • 15 posts
  • # 118971

Evening everyone, 

 

If anyone can advise me, I'd be very grateful as I'm trying to get this sorted before my first client comes along! 

 

I am a new Member in Practice up North and I'm wanting to charge a basic bookkeeping monthly fee based on transactions per month so basically up to x transactions its £Y. I should also, say I intend to charge a fixed fee per 'add-on' e.g. VAT, Printing invoices/POs, Self Assessment (eventually!), Final Statements (eventually!) as this means I can just add extras to the Add-On list as and when I pass exams and ICB approves me to undertake these new Service. 

 

I'm aiming for £20 an hour initally. Is this a good equivalent hourly rate? 

 

Is there anyone here who may be willing to discuss their prices with me? I am worried that if I undercharge, it will be difficult to suddenly increase the price to counteract the error at the end of the client engagement but I obviously don't want to out price myself.

 

I've read that you should use 2 mins as a rule of thumb per transaction - so I was going to denote a transaction as 1 invoice posting, 1 bank charge, 1 banking income etc so based on that logic, is 30 transactions an hour too low?

 

The Internet isn't much help unfortunately with this so any help would be really appreciated! 

 

Thanks so much in advance for any help! 



Edited at 18 Aug 2020 09:01 PM GMT

  • Member
  • Practice Licence
  • 3 posts
  • # 118973

Hello MisAps

I am in a similar situation to yourself (but daan saaf rather than oop north). I will be interested to see if you receive any good responses to your query here.

Whilst I have been involved in some chatter in the branch meetings regarding this, I have found that people are extremely reluctant to discuss their pricing, in terms of actual numbers. Unfortunately, this doesn't help those new to running their own practice like ourselves... maybe they think we will try and poach their clients or something?

I have taken £20 an hour as a baseline for when I, hopefully, start engaging clients for monthly bookkeeping services, or 'one-off' SAT Returns etc. I think anything less would be a bit of an insult to the knowledge, skills and qualifications that we have spent a lot of time and money obtaining. The trick will be in estimating how long processing the transactions will take (longer if the client uses one of the many accounting software packages that you may not be familiar with too, of course.)

 

Good luck out there.

 

Best regards

Steve 

  • Fellow PM.Dip
  • Practice Licence
  • 112 posts
  • # 118993

Hiya,

 

you will find prices vary widely among members dependent on location experience, pricing module.

 

I set up a pricing module in the same way as you describe - and mean to think about returning to it.  You need to be really clear on what a transaction is and how you count them; you don't want to spend hours each month counting them up!  Then, as you say, work out how long a transaction will take on average.  Obviously some are done in a second others will need investigating and proper brain work!  You need to also calculate in time spent working for the client which isn't processing transactions - clients like to talk about their pets, marriage, favourit beer!

I think £20 an hour as a starting fee is pretty reasonable; make sure you leave wiggle room in your letter of engagement for fee increases.

It is worth looking at a load of bookkeepers websites as I have found bookkeepers are often happier to publish their prices than discuss them!

 

Good luck!

Lucy

  • Member PM.Dip
  • 1 post
  • # 119013

Hi, 

 

I'm in the porcess of beginning to think about setting up on my own (currently I'm an employeed bookkeeper) and applying for a practice license. 

 

I did some research recently on what other tradespeople and professionals were charging in my area. 

 

A cleaner on average charges £30 per hour, electricians and plumbers are closer to £40 per hour. For me I know the level of qualification for an average electrician and plumber is comparible to a qulaified and expereinced bookkeeper. Therefore once I've got a practice licence and I'm all set up I will try to charge similarly as other trades. At the very least I believe £30 per hour would be my minimum as if an office cleaner can charge this for a job which does not require qualifications and ample expereince then surely a half decent bookkeeper is worth as much. 

 

I'm a big believer that you are worth only what you think yourself to be worth and if no one is complaining about your prices being too high then they are clearly too low! 

Maybe you could research how much other professionals are charging in your area and then base your starting price from there. A good bookkeeper is of so much value to a business and it's worth it for a small business to pay for that service. Your skills, expereince and dedication through qualifications and licencing are valuable. Don't undersell yourself and if you charge too high you'll quickly know about it haha. Better too start too high than low as, as you suspect it's very difficult to increase prices. Like getting a haircut, you can always cut more off but you can't stick it back on. 

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