Do you mean 40 chargeable hours per week or 40 hours in total? As a self employed person you will marketing your business, going to meetings, taking phone calls, doing your own books and admin. Then you need to decide whether to charge by the hour, by the transaction or offer fixed fees. Most people seem to agree that you will get more per hour on a fixed fee but you pricing jobs can be an artform.
I probably haven't answered your question but hopefully help to focus you on a few areas that need considering....there will be many more!
Thanks Rob, I'm just wondering if it's possible to make a decent living out of it. The thought of being my own boss is appealing but it would only be workable if one could earn sufficient money to support existing commitments.....mortgage, kid, etc...
As Rob says working for yourself isnt just a case of saying how many hours will you work x chargeable rate. You have to take into account
1. Marketing time
2. Going to meetings - both attending and travel time.
3. Time slack due to answering telephone calls, emails, mail.
4. Admin eg preparing engagement letters, filing letters, doing your own accounts.
The list is endless. As an example today i have worked an 11 hour day but only have 4 hours chargeable time.
Breakdown is as follows
3 hours - 2 new client meetings
1 hour - emails/telephone calls
2 hours - IT issues
1 hour - work on 2 clients
3 hours - delivering training course
1 hour - travelling and set up re training course
If you had 40 hours chargeable time you would probably need to work at least 50 - 60 hours to get that which equates to about 10 hours per day on a 5 or 6 day week.
If you can get 40 hours chargeable work then the figures are straight foward. You probably wont be able to charge all the time and therefore say you have a recovery rate of 75% ie 30 hours per week. Say at £20 per hour
30 x £20 x 48 (weeks) = £28,880. For the amount of hours you work you wont be charging £20 for every hour you are there as you will have some admin work and you wont be able to charge every single hour to clients.
Better if you can get fixed fees. I am slightly different in that I do all accounts work but my current GRF is just under £80k per year and I probably work about 50 hours per week.
well yes it is absolutely possible to make a good living but your idea of a good living may be different from mine! My hourly bookkeeping rate can be anything from £15 (boo hiss) to maybe £50. If you can do payroll and tax returns too then that figure will be higher. But, and this may be key to your decision, it takes a while to build up to 40 chargeable hours per week, in fact it would be interesting to know how many contributors here manage that. I have around 100 to 120 hours bookkeeping per month and a fair bit of payroll, but I have been going nearly 17 years!
Someones going to need to explain this concept of a 40 hour week to me.... I understand the concept but a practical example eludes me.
just calculated that I actually worked 40.5 chargeable hours over Saturday, Sunday and Monday. Other weeks I might not get that over seven days let alone three. All swings and roundabouts.
Jay,
it really is an how long is a peice of string type question in that it all depends on factors such as continuity of work, what level you are working at (bookkeeping, final accounts, management accounts, etc), How much competition there is in your area.
Some bookkeepers are just about getting by, some flourish, some disappear off to other career paths because they just cannot find the clients or the clients that they can find are either not cost effective or just don't pay... There's something that you need to factor in... The difference between paper profit and actually getting paid by the clients.
Its almost a case of you won't know how much you can earn until you try it but doing that may not work out as you expect and its not really the sort of risk that one can hedge against.
If its a case that you have secure income that you depend upon then unless you have substantial reserves that you can call upon I would not advise risking self employment in this area as its an industry that fails all of porters five forces tests.
Conversely for those without options or with sufficient reserves to carry them through the first two years then its a different story.
Lots of variables to be considered most of which are perculiar to the individual circumstances so its not really something that one can advise on based on such a wide remit as a simple question such as how much can I make in 40 hours.
Sorry, not really an answer at all. LikeRobs response its more of a prompt to get you thinking about options and safety nets.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Mark,
just looked at your website, I like the way you show fees up ffront but £15.99 for final accounts....can I subcontract all mine to you please?!
Rob
tut, when I started responding there wwas just Robs original reply there... Must stop taking calls when I'm in the middle of a post!
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Mark, just looked at your website, I like the way you show fees up ffront but £15.99 for final accounts....can I subcontract all mine to you please?! Rob
Hi Rob
Website in the process of getting updated and one thing will be doing is updating fees pages. The charge of £15.99 for final accounts is correct. In fact it is £15 but that is based on a monthly charge not a yearly charge so works out at £180 (12 x £15) but that is for basic sole trader. You then have the tax return on top of that which works out an additional £60 so £240 all in. As said that is for a basic sole trader with good record keeping.
My experience is that I've actually found the self employed to take me more time than the small ltd's.
The incorporated clients that I have tend to be paid through the bank a few large payments a year.
The self employed tend in my experience to do a lot of work for lot of cash effectivly creating two banks. The one on the high street and the petty cash one that they have in their pocket.
My experience is also that although many of the self employed try to be helpful with their books invariably its a case of scrap everything that they've done and restart from scratch spending a lot of time matching up why they are claiming mileage if they didn't see a client that day. Why they are not claiming mileage when they did, where is the deposit for the invoice that they issued what are these deposits for which there are no invoices... Sure you get the general flow.
All in all, £15 for me would be no more than 45 minutes work and I personally cannot do all of the necessary work in order to keep them on the straight and narrow in less than a couple of hours even for the smallest clients.
On the bright side I sold a job lot of mine at the start of August so their eternal complaining about comparative fee levels is now someone elses problem.
If they had read your post Mark the pohone would have been ringing off the hook this morning, lol.
All in all I try to aim for small ltds such as IT contractors as whilst they may have some wild ideas about what they are allowed to do and what their mates told them they can buy through the company, at least the money trail is solid and verifiable.
As such I find these far less time consuming than the self employed.
Just my observations based upon my own client base but I think that others must share similar client issues.
Of course, I could always adopt a style that wasn't half way to being an audit but I just have this attitude that clients often need protecting from themselves.
Oh fun, its nearly October and you know what that means... Little johnies christmas scalextric set will be winging its way through expenses as a new printer.
Roles up sleeves... Oh no it won't.
fun, fun, fun....
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I think that the earning potential of a bookkeeper depends on how qualified the bookkeeper is. If you are able to prepare accounts to statutory accounts level you will be able to earn more than if you are doing basis sales and purchase ledger bookkeeping. Same applies to having an understanding of doing self assessment tax returns.
That makes sense, do you find it works well for you to offer this at a monthly rate?
Shaun, I am about to go through all my clients and look at profitability, although my small incorporated companies earn me more as I will probably be doing bookkeeping, payroll and final accounts for around £1500 to £2000 for everything I think some of my small sole traders are more profitable in that I may be able to do a really simple one in less than an hour and bill out £150 to £200. Of course you need lots of them to make it pay! I guess a decent spread is needed.
As some replies have touched on, the breadth of services offered can greatly increase your earning potential. Computer and software knowledge always seems to be in demand. The hourly rate for these service is normal £50 plus and customers are not usually happy with service they receive. A reasonable skill in these areas leads to hire earning and happy clients.
I provide services to the small businesses with more of a management addition and try to be a one a one stop business solution. I am far from achieving this goal at moment, but the potential is there.
The hourly rate for these service is normal £50 plus
Oh no its not.
To get anywhere close to those sort of rates on a normal basis you need to be a developer of the software, not an end user (and even then it seem very high).
I am sure that there is the occassional £50 for an hours data manipulation using specific software packages but I do not believe that you will find £2k per week the norm in this business.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
we argue with him when he's here and we miss him when he's not... I think that the last few threads had turned into anti advertising for Crunchers so he may have decided to take a sebatical... Although to be honest I always thought that he had the hide of a Rhino for the way that he deflected logical reasoned arguement (and the IFAC code of ethics, lol).
His absence has sort of left Kris and myself wondering what to do with ourselves.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
@ Amanda I think you can find Bob here: www.portfoliomarketing.co.uk/about/
It's been a couple of years since I've been around but I instantly knew who you meant by Bob. I quite liked him and his forceful ideas about marketing, I wonder how many crunchers there are now.
@ Shaun...agreed, a hide impenetrable from an assualt from an elephant gun. Also agree not easy to get £50 an hour on advising software. Having said that wasn't that guy on Panorama charging £1000 PER HEAD for advice you could get from Tax Tips magazine??!
That makes sense, do you find it works well for you to offer this at a monthly rate?
Very few clients even ask about the website prices when i meet them. Will be getting my website redone in the next month or so and have detailed fees pages for sole traders, partnerships, ltd companies, payroll and other ancillary work with accurate up to date prices that I actually charge clients.
Nearly all of my clients pay me monthly in advance. By this I mean they have fully paid for their year's fee when their year end finishes. Even though I might not do the work for another 6 months, by which time have been paid another 6 months worth of fees.
Must be doing something right as now have 100 clients with GRF of approx £80k. (only been working fully time for myself since Dec last year and before that was working PT for myself since about March last year) Signed up 3 new clients already this week; 1 sole trader and 2 ltd companies who are paying £600, £720 and £3k for what they need done. I am at the stage of looking to outsource some work/take on an employee if continue to grow as I have.
Sorry, obviously didnt express myself properly. When I said the potential for earning extra with knowledge of computer and software started from £50 per hour. I am referring to clients having to call in computer and software specialists.
I can only go my experience in Slough and £50 is very low fee to be quoted, this is why I am expanding my services into this area. I have a very long way to go in this field before I can offer these services. Personally I have never received a quote for under £100 for what is a low quality service.
Perhaps I am not explaining what I mean by specialist in this field correctly. It is not just competence in computers and being able to work programs, but an real in-depth specialist knowledge, something many expert offering these services do not have from my experience.
yes, when things go wrong and you need to call someone in to fix it then it can be quite expensive.
I've made quite a bit myself developing automated applications in Excel.
Appologies, the way that it was written above it was more along the lines of using accountancy software.
I think that I tend to do that myself in that I'll write something knowing what I mean and then others read it completley differently.
Welcome to the forum by the way,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
