increasing charge to clients - The Book-keepers Forum (UK)

lor · Guru

increasing charge to clients

Amanda · Expert

Hi Lor,

I can type quicker than Shaun, I haven't personally put my prices up as with the recession just want to keep a steay stream of work. I did increase my prices to say new clients but not to existing ones.

Its something I may look at when we are comfortably out of the recession.
sorry not a great answer.

Cheers
A

Shamus · Forum Moderator & Expert

Pole position again! And I even gave everyone else a chance this time.

personally I think that it's really the wrong year for price increases. There just isn't the money out there. If you look at your clients books are they bringing in more money or less? Have they increased their prices? I think that in most cases the answer is likely to be no.

I know that with my accountant I've actually negotiated a reduction in fee's!

Anyway, that's my view. I just think that this isn't the year for rises. But if you can and you get away with it, why not.

Cheers,

Shaun.

Shamus · Forum Moderator & Expert

Darn it... Same minute as well!!!

semsley · Guru

This is a really difficult one. Believe it or not I have different charges for different customers based on differing situations. Teaching I charge most for then (I'm not a very good business person) I charge what I think the customer can afford. That's why I'm no Richard Branson.

Shamus · Forum Moderator & Expert

I agree Sheila, and I know that accountants work to the same principle.

lor · Guru

mmmm, okay, i'm still undecided.

What prompted my idea is, I know its not exactly the same, but my local indian put their prices up annually, my hairdresser also, and utilities normally increase.

This will be my 2nd year trading so I have only really seen my clients accounts in the recession and also they have all been new start ups, so I have no history!.

I will have to have a think!

Amanda · Expert

Maybe look at it again in 6 months Lor, when things are picking up and you clients have more work.

I'm holding tight on mine as I would rather have the work at a lesser rate then them turn round to me and say they can't afford it and then they do it themselves. So my theory is when we are out of a recession and everyone has plenty of work then I will look at mine.

Shaun, told you I could type quicker than you!!!!!

A

lor · Guru

Okay, thank you Amanda, once out of the recession I will look into this.

If we weren't in the recession what would be the normal increase in prices?

Alison · Senior Member

Hi

I set up my bookkeeping business in August 2006 at hourly rate of £12 Per Hour. In January 2008 I raised my price to new clients taken on after this date to £12.50 an hour and this would kick into effect in April 2008 for those clients I already had.

The plan before the recession hit was to have small annual increases in January each year for new clients and April each year for existing clients (basically existing clients got a small discount for their loyalty for 3 months which kept those clients onboard).

I have not increased my prices for January 2009 or January 2010 but hoping in January (April) 2011 I can increase it to £13 per hour.

Alison

Marky65 · Guru

Hi

In my letter of engagement I include the price that I will be charging and a line stating that the prices will be reviewed on an annual basis (beginning of April). I only started trading last year I will be reviewing charges soon but I don't think that there is room for an increase at the moment. However, I have just taken on one client (three companies) and I am charging them slightly more per hour than the clients I took on last year.

Regards

Mark

Flex Accounting Services · Senior Member

I am in the same situation as Mark. I havent increased prices (yet) for existing clients but have slightly increased prices for new ones and all the new ones have accepted, so it's working so far !

lor · Guru

Ok, perhaps I should stick with increasing prices for new customers at the moment.

Terri · Senior Member

I am really struggling to find new clients at the moment. I am currently charging £8 an hour and cannot think about increasing my hourly rate at the moment. Last week I did some ringing around and website searching, concentrating on bookkeeping services within the Sheffield/Chesterfield areas and there were four less than 10 miles away from me who charged £5 an hour! The recession has hit South Yorkshire quite badly I fear but hopefully things will improve soon.

Terri

Marky65 · Guru

£5 PER HOUR!!! That is absolutely ridiculous. How can you compete with that when many people do go by price alone. I am sure that the services you offer Terri would be far greater than what is being given by these business and this must be the way for you to try to attract new clients and possibly say to new businesses that the £5 per hour firms may not last for long if they only charge that amount.

Regards

Mark

Terri · Senior Member

Tell me about it, when people are looking to save money at the moment, I am finding it very hard to compete with £5 an hour prices. These bookkeepers are studying for accountancy qualifications and so arent qualified bookkeepers which is what I try to push with my advertising, I am qualified and a regulated by the ICB

Terri

Flex Accounting Services · Senior Member

Hi Terri, sorry to hear about your recent struggle. I am too in South Yorkshire but havent come across an of these £5 per hour companies. As Mark says they wont last too long and your business should pick up.

semsley · Guru

What you have to also think about or ask your clients to think about is - how many hours does it take the £5 an hour person to do the books and how long would it take you. You could work out cheaper. I'm in West Yorkshire and would no way work for that rate. NMW is at 5.80 but I know that s/e people don't have to abide by this.

-- Edited by semsley on Tuesday 23rd of February 2010 12:21:58 PM

Flex Accounting Services · Senior Member

Hi Sheila, just out of curiosity, where abouts in West Yorkshire are you ?

Bev

semsley · Guru

Bradford

Shamus · Forum Moderator & Expert

Hi Terri,

I don't disagree with the principle of your response but I feel that some of the inherent assumptions made are flawed.

It's not true to state that accountancy students are not qualified to work as bookkeepers as despite what the ICB blatantly lie to everyone and say, ACCA does in fact fully cover double entry bookkeeping to a much more detailed level than the ICB.

I took the ICB exams but only used ACCA study texts and got 99% at level I and 98% at level II (haven't taken the level III as I don't like the way that the ICB are treating their practicing members with such disregard at the moment).

Accountancy students are regulated by their supervisory bodies but may not be covered for MLR unless done directly with HMRC and also they may find it difficult to get PII.

To counter the threat you might also be better off pushing any services that you are able to offer beyond Payroll, VAT and bookkeeping to trial balance as that's all that accountancy students are able to provide.

On the Payroll front that is one area that I cannot see the ACCA's point as beyond the basics I do not believe that the qualification gives enough of a grounding in order to allow students to offer that service (but I do believe that the students should be able to prepare accounts for sole traders and limited companies beyond trial balance).

You can also push the fact that you will still be here a year from now where the accountancy students will have upped sticks and gone to be replaced by other students who do not know the businesses that they are trying to service.

Just in case it reads wrong, non of the above is meant in a nasty way but I do disagree with the statement that accountancy students are not qualified bookkeepers when bookkeeping is the foundation stone upon which accountancy is built.

talk in a bit,

Shaun.

lor · Guru

I am currently charging between £15-£25 per hour depending on the client, although I do charge a fixed fee but it evens out about this much. I could not go too low as it would be difficult to raise your price again, and also could mean being very busy but but not being rewarded for your hard work, so much, if you charge more and do less I feel would be better. But I understand that it is difficult at the mo, but would say don't go to cheap. I am really quiet at the mo, I have also had a customer who said they would do it themselves as they didn't want to pay my price, but I decided that I have a level of price that I will stick too, otherwise it isn't worth me doing it. It a bit different for me as I am really doing it in my spare time, so it currently needs to be worh it for me to give up part of my spare time.

Terri · Senior Member

I completely understand what you are saying, but I meant it in the way that if they were asked what bookkeeping qualifications they have at the moment, which I get asked when I have queries, then I assume that they don't yet have a qualification in bookkeeping - they are working towards one (please feel free to correct me if I am wrong). I completely agree that the training that they are completing is enough for them to work as a bookkeeper.

Terri

Shamus · Forum Moderator & Expert

Hi Terri,

that's a good point actually because if they are accountancy students they are not allowed to mention their supervisory body to clients until qualified.

Also, if they advertise they are not allowed to quote prices or indeed use any advertising medium that might either bring the profession into disrepute or be disparaging of other members.

How did you find out that they were charging as low as £5 per hour? What services are they offering for that and do you know who they are?

If they are using ACCA in their advertising or advertising more services than they are allowed to offer you could get in touch with the ACCA who would stomp on them big time (I think that the minimum ACCA fine at the moment is £800 plus possible suspension or expulsion).

They are actually working towards an accountancy qualification but bookkeeping is inferred. Passing the first three papers is the equivalent of MAAT so although not actually a qualification in the form of letters after the name it is non the less a sellable asset. No doubt you've seen the adverts specifying that they want someone who is either MAAT or PQ ACCA (which infers having passed at least the first three exams rather than merely just joined as a student).

Regardless of the above though the person who is MAAT can put the letters after their name but the person who is PQ ACCA has nothing more than a bit of paper stating their current exam status.

Shaun.