How much do you pay for bookkeeping?

accountingbod

Hi all

I know there have been a few threads about bookkeeping but i have landed my first potential client for my bookkeeping business and will be meeting with him over xmas period to look through his business and come up with a forward plan.

Now, when it comes to charging for my services, I want to be competitive to secure the work and do a good deal as he is new to his business also but dont want to do myself out of a decent wage. I have done lots of research and have found many different answers.

The type of clients i am looking to secure are mainly sole traders and small businesses. This guy is a tiler.

Hourly rate i was thinking of about £15 per hour or about £40-£60 a month. I have a feeling his turnover may be somewhere around between £30,000 - £50,000 a year.

What do other people pay for this kind of service?

I am based in the south east and as said before, i dont mind doing a good deal for the first few clients to get business going but dont want to do myself out a wage.

Thanks in advance.

jjww_2

Is it all of the bookeeping aspect you are going to be providing. I have 2 businesses one a sole trader and I pay £165 for end of year and s.a tax return the other is a ltd company and I pay approx £850 for end of year (no paye) and company tax returns, minutes etc.

The rate you are suggesting seems reasonable to me.

Pennywise

At an average of £50 per month, that's £600 just for book-keeping for a relatively small sole trader. Presumably you won't be doing his annual accounts nor his personal tax return, so that's going to cost him another couple of hundred or so even with perfect book-keeping, so total cost to the client will be £900 or so.

In my mind, that's way too much. Plenty of accountants accept small sole traders with barely any records at all (typical incomplete records job) and will do it all for £500 or so.

I think you've got the wrong target market. Small sole traders usually have simple affairs and can do some form of "books" themselves, of an adequate standard for the accountant to make the year end accounts out of them.

The businesses that need/want book-keepers are those with staff (someone to do the payroll), VAT registered (need someone to do the VAT returns), typically with plenty of customers and suppliers so they need someone to prepare decent sales and purchase ledgers. So you'd be looking more at turnovers of £70k upwards - probably more likely around half a million or so of sales, where the books are simply "too much" for the proprietor to do themselves, yet some kind of "proper" records are needed.

accountingbod

Hi jjww

Thanks for the response. It's good to know i'm in the right ball park!

I will be providing services up to trial balance level.
I am a part-qualified accountant so under ACCA rules can not offer full end of year services until fully qualified. I am doing my finals at the moment though so in the next six months hopefully will be fully qualified and can extend my services

accountingbod

That's food for thought pennywise. You may be on to something.

I think you are right about the payments thinking about it again because i wouldnt be offering end of year services with this. I guess it will be something more likely to be a good value service when i can provide this extra level.
The person i am talking to at the moment is a tiler by trade and is from Hungary. He has been in the UK for several years but just gone self-employed from being employed and his english/numbers are not too good so he was interested that i could help.

I am a management accountant by trade so payroll is a non-entity to me and is something i am thinking i should invest in for the future as my end goal is be running a practice.

4Chickens

accountingbod

I am a qualified book keeper and do the books upto trial balance for the company I work for and I also do the payroll. The books then go off to an accountant who does our quarterly accounts and then we have a different accountant that does the year end and tax returns etc. The company I work for is a construction company with a turnover of approx £3 million so I think they are getting value for money from me because I am paid £10 per hour.
However I also do the books for a sole trader who does mobile commercial vehicle repairs and I do it for free
A Because I am a mug
B He is my husband

However, we've now incorporated the busines and I am going to charge him £15 per hour (via dividends), that will be money mr tax man is no longer getting his grubby paws on.

I think you're in the right area at £15 per hour. As long as you give an excellent service you will be value for money. Oh and don't marry him, they stop paying after that;)

accountingbod

Thanks for the response 4chickens

I am very passionate about delivering an excellent service and will be sure to provide as much value for money as I can.

I will heed your warning and be sure not to marry him because:

A I am a man also (not that i couldn't have a civil ceremony of course)
B My wife would not approve!

Pennywise

Don't forget that you can't "practice" until you have a practising certificate, so it's not just a matter of passing your finals, you'll also have to wait until you've completed the required number of years of pre/post qualifying experience before you get your PC and can go further than trial balance.

I also think you need to speed up your training/experience re payroll as it's one of the most important parts of book-keeping for small businesses and is the main area where proprietors struggle and therefore need outside help. PAYE and CIS tax are probably where you'll get most book-keeping style work in the long term, so ignore them at your peril!

accountingbod

Thanks Pennywise.

Yes, i have been filling in my PER return over the last couple of weeks and i should be pretty much there by this time next year for experience hopefully at the time when i will have (finally) finished my exams!

I'm being really careful not to suggest any work that will compromise my studies because i've worked so hard for them and don't want to jeapordise membership. I want to be one of the people that gives accountancy a good name - not a bad one!

I'm going to be looking in to payroll and CIS this weekend. Do you recommend a course of some kind or is this the kind of thing i could get up to speed with through some self-study through the HMRC website and books? I suppose the main difference would be having some kind of accreditation such as with the IAB?

heretolearn_2

I am a part-qualified accountant so under ACCA rules can not offer full end of year services until fully qualified. I am doing my finals at the moment though so in the next six months hopefully will be fully qualified and can extend my services...

As I said in your other thread but you ignored, you can't offer full services until you have your practising certificate, and you can only get that by working under an ACCA approved accountant as a trainee. 1) the ACCA won't let you 2) you need the experience as hand on heart newly qualifieds are still pretty useless when it comes to doing the actual work. You HAVE to have that practical experience. Trying to jump straight to running your own accounting practise, well, you just can't.

You seem determined to try and shortcut the process. You'll have an awfully short career if the ACCA find out.

accountingbod

Hi heretolearn.

Sorry for not replying before.

I'm not trying to shortcut anything. I have over 8 years of experience working in accounts, now working as a management accountant although only the last 3 of which are particularly relevant to my studies from a commercial perspective.

I am aware of the industry requirements being i think 2 years practical experience in practice with relevant CPD before you can practice yourself regardless of when you qualify. I have a plan in place to work with a qualified and practicing individual during this time through a partnership hopefully.
Maybe i didnt make myself clear so apologies.

On another note, have you just sat some exams? If so i hope they went well. I have just sat P2 and P3. I thought they were actually quite fair papers although it never fails to amaze me how fast 3 hours can go by in an exam! Can't wait for my exams to be finished...