looking to start a book keeping business....need some advice on where to being!!

[FixIT]

Hi all,


My life insurance lead generation business in now auto pilot. So, with so much free time to hand, I've been thinking of setting up a back-office, support-based business (primarily book keeping as I have a team of book keepers and accountants), offering services at knock out prices. For e.g. I know I can offer these services for as less as £5 per hour but I've done some research, speaking to a few accountants and it's left me absolutely confused for as to how much I should be charging.

So really, I am not sure if it's a good price or not and would like some advice here please.

P.S. the list of services includes but is not limited to (anything an assistant could do): book keeping, data cleansing, replying to and sending out emails, appointment booking, content writing, etc.

Kind Regards

Sumit

 

[DWS]

£5 an hour, are you joking?

 

[Ozzy]

For e.g. I know I can offer these services for as less as £5 per hour but I've done some research, speaking to a few accountants and it's left me absolutely confused for as to how much I should be charging.

Just by way of feedback from someone who is involved in a business that outsources bookkeeping, and has done in the past.
Any professional adviser who charges less than the minimum wage would raise alarm bells with me, and I would then question their ability and not have confidence in using them. I would expect them to be paying themselves a decent wage relative to the level of expertise I expect from them, plus margin on top to cover their insurances and professional licences, and then also enough on top to be making enough profit to sustain their business. Anything below that then I'd be very concerned and would not use their services.

Do not under charge; but equally make sure you have the credentials and the PI cover, etc, to back up the fee you charge.

 

[Mark T Jones]

I would add to @Ozzy 's valid post that this type of suicidal pricing will automatically attract the type of customer who wants something for nothing - expiring to squeeze more and more out of your hour.

 

[FixIT]

£5 an hour, are you joking?

you see, that's what I thought. But then when i spoke to my accountant to see how much he'd charge for my book keeping. He turned around and said he'd do it for £300 for the year. Now i know for a fact that book keeping for my business (for the whole year) would take a maximum of 4 days & he's my accountant so he obviously knows that. Now that works out £25 per month. it's not going to be sustainabe for me unless I had about a min of 100 such accounts each year, and then I could gradually grow it.

it could take me years to get those many accounts.

That's why I came to this forum to get some advice on where to begin.

 

[FixIT]

Just by way of feedback from someone who is involved in a business that outsources bookkeeping, and has done in the past.
Any professional adviser who charges less than the minimum wage would raise alarm bells with me, and I would then question their ability and not have confidence in using them. I would expect them to be paying themselves a decent wage relative to the level of expertise I expect from them, plus margin on top to cover their insurances and professional licences, and then also enough on top to be making enough profit to sustain their business. Anything below that then I'd be very concerned and would not use their services.

Do not under charge; but equally make sure you have the credentials and the PI cover, etc, to back up the fee you charge.

Hi Ozzy, thanks for your time writing this.

Like I said, i need advice on where and how to start & I am in no hurry to become rich over night. I just want to offer good service at a sustainable price & that's why i need some advice on how much I should qoute so i don't look like a fool when talking to my target audience. i want to find out more about how it works & what's the going price as everyone seem to have a different picture about it.

 

[Mark T Jones]

you see, that's what I thought. But then when i spoke to my accountant to see how much he'd charge for my book keeping. He turned around and said he'd do it for £300 for the year. Now i know for a fact that book keeping for my business (for the whole year) would take a maximum of 4 days & he's my accountant so he obviously knows that. Now that works out £25 per month. it's not going to be sustainabe for me unless I had about a min of 100 such accounts each year, and then I could gradually grow it.

it could take me years to get those many accounts.

That's why I came to this forum to get some advice on where to begin.

A couple of significant points here:

1. How many prospective clients want to know your hourly rate? My guess is that the overwhelming majority want to know how much it will cost to do their books (monthly, annually or whatever). Your challenge will be to clarify and manage expectations as to what is/isn't included in that fee.

2. I'd pretty much guarantee that the accountant in question isn't giving you 4 days work for £300. A mix of outsourcing, automation and efficiency will make the pricing effective for them.

 

[Ozzy]

In my case, I work with the bookkeeper recommended by my account. So for clients in a demographic as myself, your marketing would be based around building relationships with a small number of accountancy firms.

 

[FixIT]

In my case, I work with the bookkeeper recommended by my account. So for clients in a demographic as myself, your marketing would be based around building relationships with a small number of accountancy firms.

That's exactly what i am looking to do, so I have a list of over 2000 accountancy firms that I am looking to reach out to, but just not sure how much should I say I'd charge

 

[DWS]

That's exactly what i am looking to do, so I have a list of over 2000 accountancy firms that I am looking to reach out to, but just not sure how much should I say I'd charge

One of the first things you will be asked by Accountants is what experience and qualifications you have

 

[FixIT]

One of the first things you will be asked by Accountants is what experience and qualifications you have

So we're well versed with Xero & sage, but with all due respect it's only book keeping after all, we can work on any software the client wants us to work on.

 

[fisicx]

So we're well versed with Xero & sage, but with all due respect it's only book keeping after all, we can work on any software the client wants us to work on.

I'm well versing in how to wire a plug but that doesn't make me an electrician. I want my sparky to have all the necessary certificates and qualifications. Same with a bookkeeper. What AAT or ICB qualifications do you have?

And if you are charging £5/hour I'd be very wary. Even £15/hour isn't that high.

 

[DWS]

but with all due respect it's only book keeping after all

Not sure professional bookkeepers would look at it that way or Accountants for that matter, good bookkeepers are hard to find!
So anyway what qualifications and experience will you be able to demonstrate to your would be clients at Accoutancy practices?

 

[FixIT]

I'm well versing in how to wire a plug but that doesn't make me an electrician. I want my sparky to have all the necessary certificates and qualifications. Same with a bookkeeper. What AAT or ICB qualifications do you have?

And if you are charging £5/hour I'd be very wary. Even £15/hour isn't that high.

oh ok, we don't have any of that. So, what you're saying is that I would need to have either of these certifications to get work from accountancy firms. I honestly didn't know that. Well, thanks for the advice, I guess I need to do my homework properly, but this is helpful. Thanks.

 

[DontAsk]

Have you heard of the minimum wage? How are you going to pay your team of accountants at £5 /hr?

 

[Paul Kelly ICHYB]

it's only book keeping after all

Yup, and get it wrong and it can cost your client and you loadsa wonga!

 

[FixIT]

Have you heard of the minimum wage? How are you going to pay your team of accountants at £5 /hr?

the plan is to outsource

 

[Lisa Thomas]

the plan is to outsource

UK subcontractors should charge the NMW...

 

[Lisa Thomas]

P.S. the list of services includes but is not limited to (anything an assistant could do): book keeping, data cleansing, replying to and sending out emails, appointment booking, content writing, etc.

This sounds more like a virtual assistant to me.

 

[FixIT]

This sounds more like a virtual assistant to me.

That's exactly it.

 

[numbersrule]

Bookkeepers in the UK are 'relevant persons' under the Money Laundering, Terrorist Financing and Transfer of Funds ( Information on the Payer ) Regulations ( The MLRs ).
This means bookkeepers are required to obtain supervision by an approved AML Supervisor.
AML Supervisors include HMRC, Law Society, ICB, ICAEW, ACCA, AAT, amongst others.

 

[Joseph Bartosiewicz]

Hey! That’s awesome that your lead generation business is on autopilot! When I was figuring out my pricing for my side gig, I found that it really helped to look at what others were charging for similar services. While £5 an hour sounds tempting, make sure you’re covering your costs and not underpricing yourself. I started with tiered pricing for different services, which helped me attract a wider range of clients.