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Double Your Fees
How can you double your fee income without hiring extra staff? This may sound implausible, but if your bread and butter is statutory year-end accounts you could be missing a trick.
We’ve surveyed a selection of our partners to see for ourselves where money can be made from some basic accountancy services. As a disclaimer, the numbers in the text are what we have derived from the responses to our poll, and of necessity paint a broad-brush picture. If you’d like to see the results of the poll please contact your account manager, or leave your details here.
We’ve learned that for an SME with its books in relatively good order, a year-end accounts preparation fee can range from £500 to around £3000 for a company with turnover below £500,000.
We’ve also seen that an appropriately skilled individual should be able to complete around 10 of these a month.
Assuming an “average” fee of £1200 for the work, fees earned over the month are:
£1200 x 10 = £12,000.
But which is the higher earner: monthly management accounts or year-end accounts preparation?
Again, based on the responses to our poll, using a day rate of £350 for management accounts & bookkeeping work, and 20 working days in the month (4 full weeks), the monthly revenue generated by the same individual would be:
£350 x 20 = £7,000 per month
On the basis of the figures above there’s no debate – but here’s the rub. To complete 10 sets of year end accounts per month to generate £12k in fees one person needs to service 120 clients over the year, and the practice also has to be able to spread that work evenly.
But to earn the £7k monthly fees from management accounts, performing 2 days work per month per client, you only need 10 clients. However, you'll be able to plan this work with more confidence, as it covers routine tasks. By performing the work online, you have the freedom to choose which staff perform the work and from which location.
So if you’re happily earning £10k per month from 120 clients, on the basis of the survey data, persuading 20 of these to take a management accounts service would double your fees. Here’s the next question though – where will the staff come from? You’re not going to switch your accounts preparation staff onto management accounts work, but you’re still leaving significant fees on the table.
If you’ve read this far you know where the discussion’s leading: outsourcing.
Some of our partners are already successfully using outsourcers based overseas, working together on the Online50 platform.
Melanie Troiano, Customer Services Director at one of our partners, Stevenage-based Artauis, comments: "We have recently successfully migrated all of our payroll bureau data onto the Online50 platform. We now have a team based in Mumbai processing overnight all of our payrolls for our clients. The ability to print directly to a printer in our Stevenage office from India means that our role has become one of review and liaison with the client. Working with Online50, we are now migrating all of our clients' Sage Line 50 accounts data onto the online system so that our team in India can also provide accounts processing."
If you are not using outsourcers already, but would like to do so, to help you consider your options, we have profiled three providers who have recently joined the Online50 service below. These partners want to work with you on the Online50 platform to fill the resource gap and help you make money from management accounting. They've said in their own words what they can do for you and why they want you to work with them.
Sarbanes-Oxley and Online50
For those of you with publicly-traded clients (in the US or domiciled elsewhere) doing in business in the US, you will have been preparing for that start of Sarbanes-Oxley compliant reporting this year.
Under the terms of Section 404 all annual financial reports must include an Internal Control Report stating that management is responsible for an "adequate" internal control structure, and an assessment by management of the effectiveness of the control structure.
More generally all applicable companies must establish a financial accounting framework that can generate financial reports that are readily verifiable with traceable source data. This source data must remain intact and cannot undergo undocumented revisions.
We have been asked by the UK subsidiary of a NASDAQ-quoted company for a statement on the access to this source data. Here’s what we said:
- Commercial confidentiality:
we have no access to your Sage accounts data - it's password protected and only you and the accountant will know that. As we don’t develop the accounting software hosted on the platform, we don’t have the ability to crack the passwords on your data.
- Access rights to data:
Online50 platform access allows you to take back-ups of accounts data to your local PC at any time
- Security:
We run two Tier 1 facilities in London (EC1 and E14) connected by a dedicated fibre link and backed-up to each other overnight. Physical access to the datacentres requires biometric authentication. Traffic between your PC and the servers is encrypted at the 128 bit-level, the maximum currently in use.
- Backups & data verification:
we back-up the data held at each of our two datacentres to the other location overnight. We also maintain a back-up to tape for 14 days at the primary location (London E14).
Users running the accounts in one of our hosted accounts packages know that they can take their data offline, and can independently verify the backup using a desktop copy of the same software - we host mainstream accounts packages, not proprietary web-only systems.
The ability to back-up from the hosting servers to an offline location means that the data can be held in a minimum of three physical locations: our two datacentres and the offline hard disk or network drive.
If you have any questions or need further clarification, please give your account manager a call on 0800 195 0835.
