Quoting an accountancy fee before seeing the books properly

3 days ago
3 min read

Updated: 2 days ago

Introduction

A prospective client asks what it would cost to do their accounts and returns. The honest answer depends entirely on the state of their records, which nobody has seen. Quote low to win the work and you may inherit a shoebox of receipts, a bank feed that has never reconciled and eighteen months of unrecorded transactions for the fee you quoted for a tidy set of books.

Practices lose more margin here than anywhere else, and the loss is invisible because the fee looked reasonable when it was quoted.

The remedy is a short set of questions that reveal the condition of the records before any figure is given. None of them are difficult to ask.

1. Quoting an accountancy fee before seeing the books needs qualifying questions

Five minutes prevents months of unpaid work.

Ask what software they use, and whether it is reconciled

Reconciled bookkeeping and a bag of paperwork are two different engagements at two different prices. Ask to see a screenshot before quoting.

Ask about transaction volume and complexity

Number of bank accounts, employees, VAT status, stock, foreign currency, multiple entities. Each changes the work substantially. Six questions covers almost every case.

Ask why they are leaving their current accountant

The answer frequently reveals the real state of things. Listen for what they do not say.

2. Quote a range, or quote in two stages

Do not give a firm figure on unknown records.

Give a range with a stated basis

A figure for records in good order and a higher one if a clean-up is required. Honest and easy to explain. Clients prefer a range to a surprise.

Or quote the clean-up separately

A one-off catch-up fee, then an ongoing annual fee. Clients accept this readily when it is explained. Quote the catch-up as a fixed sum.

3. Price the ongoing work as a monthly fee

Annual billing hides the work and invites haggling.

Move to a monthly retainer

Compliance plus whatever advisory content you include. Predictable for both sides and better for cash flow. It also removes the annual fee argument.

Build three tiers

Compliance only, compliance plus reporting, full advisory. Most clients take the middle when presented clearly. Build the middle as the one you want.

4. Define the scope explicitly

Scope creep is the other margin leak.

Say what is included and what is not

Number of returns, meetings, phone calls, bookkeeping, payroll runs. Unlimited anything becomes unprofitable. State the numbers in the engagement letter.

Price the extras as a published list

Additional returns, references, ad hoc advice. A rate card prevents the awkward conversation later. Send it with the proposal.

5. Review fees annually and act on the bottom of the list

Practices under-charge for years without noticing.

Rank clients by fee against hours consumed

The bottom of that list frequently costs more than it earns. Reprice or release those clients. Do it once a year rather than never.

Set an annual review date

A practice that has not raised fees in three years has absorbed inflation on its clients' behalf. Set the date and hold it.

Conclusion

Never quote a firm figure on records nobody has seen. Ask what software they use and whether it reconciles, ask about volume, employees, VAT and entities, and ask why they are leaving their current accountant — that last answer usually tells you the most.

Then quote a range with a stated basis, or separate a one-off clean-up fee from the ongoing work. Move the ongoing engagement to a monthly retainer with three tiers, define the scope explicitly including how many meetings and calls are covered, and publish a rate card for extras. Finally, rank your clients by fee against hours and reprice or release the bottom, with an annual review date in the diary.