It is likely that your client base will consist mostly of local businesses, clubs, societies, charities and other organisations, although you will probably also have some private clients. These may need personal taxation services or help with investment business, particularly since the relaxation of the pension rules. If you have an area of specialist expertise your clients might also include other accountancy practices. Of course, if you decide to offer online accountancy services your clients can be based anywhere in the UK.
Clients are very demanding and are likely to put pressure on you to keep fees low. You might be asked by larger businesses to tender for matters such as audit work.
Most of the work that you do is likely to be charged out to your clients on an hourly basis. To this fee you will add any expenses or disbursements you incur while working on the case. Some practices charge their clients a fixed annual fee - for example of £1,000 - to cover the range of services they're likely to require.
It is important to make sure that, when you take on a new client, you send them a letter of engagement which clearly sets out the basis on which you will be charging and when you expect your invoices to be paid. It is commonplace for an initial meeting to be held with a new client to discuss the services they will want and to give them an indication of the costs. Generally no charge is made for this meeting - you could use it as a way of telling the client about all the services you offer which would be useful to them.
It is also a good idea to agree with your clients how you will bill them. Ideally for regular work you will bill them frequently (for example, monthly) rather than submitting a large bill every now and then. Be prepared for the fact that many clients are very slow to pay. Don't go on supplying services to clients who do not pay their bills. Think about how you will go about collecting money which is due to you. Would the services of a factor be useful?
You might consider using the Premium Credit FeePlan finance facility - this allows your clients to spread the cost of your fees by monthly direct debit, but you receive payment in full. You can find out more about FeePlan on the ICAEW website.
Your clients may pay you:
- in cash. Only a few of your clients are likely to pay you in cash. However, some might and you'll need to put in place good cash handling procedures to make sure cash is fully recorded and securely held
- by cheque, debit or credit card. Many people, including businesses, prefer to pay with a card
- by electronic payment (for example, large clients to whom you provide services on a regular basis)
You might decide to offer a discount to local charities, housing associations, churches and so on.