Reply to: SJD just stuffed fees up by over 10%

[DaveB]

The majority of SJD's clients are willing to pay the fee. The small minority it seems are not. That happens when a price is increased. If the fees lost to due to defective clients exceeds the gains on the price increase then they have got it wrong. If they don't they've got it right. I suspect they'll have it right. You can say what you like about SJD and Simon but they have a hugely successful business model and I doubt they would jeopardise this for the sak of a price increase.

Exactly. As long as a 10% price increase does not result in >10% loss of clients they are ahead of the game. And if they do lose clients there are possible savings to be had anyway as they can potentially reduce headcount in light of the reduced workload.

[Alan @ BroomeAffinity]

The majority of SJD's clients are willing to pay the fee. The small minority it seems are not. That happens when a price is increased. If the fees lost to due to defective clients exceeds the gains on the price increase then they have got it wrong. If they don't they've got it right. I suspect they'll have it right. You can say what you like about SJD and Simon but they have a hugely successful business model and I doubt they would jeopardise this for the sak of a price increase.

[d000hg]

Margin comparisons are difficult with different businesses, a margin of 57% does seem excessive?

No not really.

[Alan @ BroomeAffinity]

It's funny that no matter how complicated the business(in terms of ins/out) ie. retail/web versus contracting the price is always the same?

Possibly because the fees are market-led not price-led. IE, charge what the customer is willing to pay not what the supplier is willing to accept.

[MarillionFan]

Haven't really looked into all the costs yet, because my year end is a short while away. But a post in this thread seems to indicate £450-600 to prepare year end, so potentially half the price.

As I said, that's what I've found. It's funny that no matter how complicated the business(in terms of ins/out) ie. retail/web versus contracting the price is always the same?

[Waldorf]

I am not surprised nor particularly outraged that SJD are making £50 a month profit out of me (if that is true).

You can do the maths, the SJD state that their profit is £6m, they have 10,000 clients so this equals £600 profit per client. This profit is before the price increase, so the profit should increase to £720 per client.

Margin comparisons are difficult with different businesses, a margin of 57% does seem excessive?

[Wanderer]

Really, what exactly is YOUR company's profit margin?

Mine is 95%, but it's quite a different business model so we aren't comparing like with like.

A better comparison would be that you got a contract that you subcontracted out and made 57% net profit on the deal.

[Mr.Whippy]

Isn't the whole point of paying £70-100/month that this is basically splitting the total annual cost into monthly bills, but the bulk of the work the accountant does is still the year-end stuff anyway? How much exactly are you going to pay as a one-off at year-end?

Haven't really looked into all the costs yet, because my year end is a short while away. But a post in this thread seems to indicate £450-600 to prepare year end, so potentially half the price.

[d000hg]

Not me, I've decided to ditch the accountant entirely after my year end and do it myself, with the exception of the year end stuff.

Isn't the whole point of paying £70-100/month that this is basically splitting the total annual cost into monthly bills, but the bulk of the work the accountant does is still the year-end stuff anyway? How much exactly are you going to pay as a one-off at year-end?

[configman]

What do people who have no accountant or are with other accountants do about VAT Inspection? I think you're supposed to have one in the first 2 years of trading then every six years thereafter, though I have heard of them being skipped or done over the phone. Do you invite Hector into your Home Office?

I have nothing to hide and know my accounts inside out therefore nothing to be afraid of when inspected - I could be notifed of an inspection this minute and I'm ready for it. I've had accounts inspected before at home and everything was OK. Even got a thank you letter from HMRC for having good accounts and for my hospitality.

[pjclarke]

I am with SJD, I had a couple of face-to-face meetings with my dedicated accountant when I was starting up, nowadays not so much.

I really appreciated the personal service when I had my first VAT Inspection. Without being asked my SJD accountant, arranged for this to happen at her office. She prepared the records (including three years worth from a period before we joined SJD) and she answered all the Inspector's questions (ditto). Outcome was a £700 -odd refund of overpaid VAT which I would never in a month of Sundays have spotted (something about an incorrect switch from accrual to cash-based charging? Whoosh over my head).

What do people who have no accountant or are with other accountants do about VAT Inspection? I think you're supposed to have one in the first 2 years of trading then every six years thereafter, though I have heard of them being skipped or done over the phone. Do you invite Hector into your Home Office?

I am not surprised nor particularly outraged that SJD are making £50 a month profit out of me (if that is true). Comparisons with Tescos are absurd, such margins are commonplace in professional consultancy, as surely we all know? My accounts (prepared by SJD) show a comparable margin for MyCo. Would you employ you IYSWIM?

I've an IBM guy opposite me for whom the client is paying £1,000 a day. Because they judge the value he adds is greater than a tin of beans, I guess.

[VectraMan]

Done my own for 5 years now, difficult the first time but easy after that as you have a template. The only problem I had was getting the information on how to do it in the first place as this tends to be a closely guarded secret by the accountancy profession - a bit like the magic circle.

That's so true. I did accounts myself for Plan B co. (which is simple as simple can be with no assets, no PAYE, no VAT), and it was still extremely difficult just trying to work out what was required. The first time I missed out the "director's report" - absolutely nothing will tell you what a directors report is, just that you need one. It took 6 weeks for HMRC to reject the accounts, by which time the deadline had passed and that meant £100 fine. I then appealed the fine on the basis that the instructions were vague, and that all the important bits of information for tax purposes were there, which they rejected, but did refund the fine on the basis that it shouldn't have taken them 6 weeks.

There's a PDF you can use, but it still uses lots of incomprehensible accounting terms with incomprehensible explanations, and last time I used it I spent ages poking in random numbers trying to work out what it wanted to add up with what and why it wouldn't let me proceed, until finally giving up and sending in the paper return.

All this was so stressful it made me appreciate paying for an accountant. Not because accounts need to be complicated, just that they make it that way.

[Clare@InTouch]

Do your accounts not need to be done or reviewed by a certified / chartered accountant?

No. If you want an audit then they have to be signed off by a Registered Auditor who will be Chartered or Certified, but there's no necessity for the accounts to be prepared by a qualified accountant.

[configman]

So, net result of this thread is that I'm going to be saving my company £240+VAT on what we've paid for accountancy services over the past 12 months and £360+VAT on what we would have paid next year had I not started it. It's also made me think about ways I could save even more. I've 'right-sourced' my accountancy services <ducks>. All for the sake of a couple of hours effort.

Result!

It will take several hours to learn it the first time though!! After that easy

[configman]

Do your accounts not need to be done or reviewed by a certified / chartered accountant?

Companies House are more than aware I do the company accounts, what they told me was it is "strongly suggested" to use an accountant when I first struggled but there was no mention it is mandatory. There is a dependency on company size and/or turnover I think. If accounts are audited (and I'm exempt) then it has to be chartered. HMRC are also aware I prepared the accounts and actually congratulated me on my books being so readable compared to many others - and I could answer all their questions without waiting for the accountant.