Reply to: SJD price increases

[administrator]

This thread has wandered a tad off topic and is now closed.

[Dan@OrangeGenie]

I presume you then include the value of the referrals on their tax return for them when you do their self assessment?

A sharp eye!

Even better, we reduce their monthly fee, that way we show how valued they are every month we charge our fee.

[Jeremiah@RHJAccountants]

It certainly did in my case!, but then the referral did come from an agent looking purely for the biggest bung available and as a green behind the ears contractor I knew no better. Now referrals from fellow contractors who are actually current clients, I agree they speaks volumes and are a good thing.

I think we all know how most agents work!

But yes referrals from fellow contractors who are current clients is the best way to go seems to work for my firm and many other firms too.

If someone does a good job for you why would you not refer them onto you fellow contractor.

[TheFaQQer]

+1 this, and thats why we reward our clients for each and every referral we get.

I presume you then include the value of the referrals on their tax return for them when you do their self assessment?

[SlipTheJab]

I agree this is how most accountants work certainly we do. Referrals are the best form of business and speaks volumes to potential clients.

It certainly did in my case!, but then the referral did come from an agent looking purely for the biggest bung available and as a green behind the ears contractor I knew no better. Now referrals from fellow contractors who are actually current clients, I agree they speaks volumes and are a good thing.

[Jeremiah@RHJAccountants]

+1 this, and thats why we reward our clients for each and every referral we get.

I agree this is how most accountants work certainly we do. Referrals are the best form of business and speaks volumes to potential clients.

[Dan@OrangeGenie]

The pimp doesn't care as s/he's looking for a short term gain.

Most accountants are looking for long term clients with referrals to gain new ones.

+1 this, and thats why we reward our clients for each and every referral we get.

[Waldorf]

£600 is not sustainable if you want a decent level of service. We work on a 100 clients per accountant ratio (which I think is fairly typical) so the labour cost is c£300 per client per year. Even discounted Freeagent subs are c£200 per year. That leaves £100 for overhead, vat and profit. Therefore a £600 pa fee is not sustainable and is not in my view market rate either.

If £600 is the VAT inclusive price then the VAT alone will be £100.

I agree that a fee as low as £600 is unsustainable and I would avoid.

[SueEllen]

Out of interest did you end up with them by way of a 'recommendation' from a pimp, I did as it was my first contract and I didn't have anything set up. Hope the pimp choked on the Champers the referral fee bought him!

The pimp doesn't care as s/he's looking for a short term gain.

Most accountants are looking for long term clients with referrals to gain new ones.

[SlipTheJab]

Same here, best thing i ever did leaving them after getting in a right old mess. It was my fault i guess for not knowing what i was doing and just assuming they had it all under control

Out of interest did you end up with them by way of a 'recommendation' from a pimp, I did as it was my first contract and I didn't have anything set up. Hope the pimp choked on the Champers the referral fee bought him!

[SlipTheJab]

I wasn't suggesting that. The £500 per day was just to illustrate that contractors make profits and so should accountants.

£600 is not sustainable if you want a decent level of service. We work on a 100 clients per accountant ratio (which I think is fairly typical) so the labour cost is c£300 per client per year. Even discounted Freeagent subs are c£200 per year. That leaves £100 for overhead, vat and profit. Therefore a £600 pa fee is not sustainable and is not in my view market rate either. That's why most accountants in this space are in the £75 to £100 PCM range.

For a business relationship to flourish both parties have to benefit. At £500 pa the accountant has little benefit and is therefore not motivated to provide the top notch service you deserve.

+1, am currently paying £102 a month including VAT and am more than happy to do so for the first class service I get.

[Alan @ BroomeAffinity]

SJD price increases

I wasn't suggesting that. The £500 per day was just to illustrate that contractors make profits and so should accountants.

£600 is not sustainable if you want a decent level of service. We work on a 100 clients per accountant ratio (which I think is fairly typical) so the labour cost is c£300 per client per year. Even discounted Freeagent subs are c£200 per year. That leaves £100 for overhead, vat and profit. Therefore a £600 pa fee is not sustainable and is not in my view market rate either. That's why most accountants in this space are in the £75 to £100 PCM range.

For a business relationship to flourish both parties have to benefit. At £500 pa the accountant has little benefit and is therefore not motivated to provide the top notch service you deserve.

[FK1]

More fair for who? The £500 per day contractor or the accountant who would be hard pushed to turn a profit at that rate? Software, rent, salaries etc all need to be paid and you get better service from an accountant, just like any other service provider, if they aren't forced to spread themselves too thin to make money. Dependent on size and economies of scale, I reckon it costs anywhere between £400 and £600 per annum to service a client.

OK. So it is expected £500 per day contractors should pay for their accounting £1500 pa.
Then those with £1000 per day rate - £3000 and others with £250 per day - £750 for the same accounting.

It is irrelevant how affordable it is. It is simply stupid to pay for a cup of tea (made from a tea bag and boiled water with no soul in it) triple price just because you earn more than other customers.

Typical IT contractor has much more straightforward tax situation than some other small business as family small shops, sole traders/self-employed in the retail sector etc

My clients do not care how expensive it is for me to service them. They pay market price looking on competitors.

Nowadays online accounting products are very competitive and it makes £500-£600 fair for me as I could spend that amount of money on my LTD accounting having more comfort and spending less time.

[northernladuk]

I reckon it costs anywhere between £400 and £600 per annum to service a client.

NLadyUK disagrees...

[Alan @ BroomeAffinity]

£50 (including VAT and Free Agent) per month is much more correspond to the reality and looks like "more fair". IMHO.

More fair for who? The £500 per day contractor or the accountant who would be hard pushed to turn a profit at that rate? Software, rent, salaries etc all need to be paid and you get better service from an accountant, just like any other service provider, if they aren't forced to spread themselves too thin to make money. Dependent on size and economies of scale, I reckon it costs anywhere between £400 and £600 per annum to service a client.