In short
- Start with the profit before tax you want each person to make.
- Divide it by your chargeable hours a year, after holidays, to get your hourly rate.
- Price each service by multiplying the hours it takes by that rate.
- Charge a fixed monthly fee, collected by direct debit, and review it every year.
Start with the profit you want to make
Most pricing advice starts with what other practices charge. The trouble is that their costs, hours and goals aren't yours. A better starting point is the profit before tax you want to make, for yourself or for each member of your team.
For this example, say the target is £100,000 a year.
Work out your chargeable hours
Next, work out how many hours you can actually charge for in a year. Take the chargeable hours you want to work each week, multiply by 52, then take off your holidays.
| Hours | |
|---|---|
| 35 chargeable hours a week × 52 weeks | 1,820 |
| Less 28 days' holiday, including bank holidays, at 7 hours a day | 196 |
| Chargeable hours a year | 1,624 |
Be honest about what counts as chargeable. Time spent on admin, marketing and running the practice doesn't bring in fees, so either leave it out of your chargeable hours, or build it into the time each job takes.
Find your hourly rate
Divide your target profit by your chargeable hours: £100,000 ÷ 1,624 = £61.58 an hour. That's the rate you need to charge, on average, to hit your target.
Free calculator: work out your hourly rateEnter your own target profit, hours and holidays, and see your rate and the price for every service.Open it →Price each service from the hours it takes
Now price each job by multiplying the hours it takes by your hourly rate. For a limited company client:
| Service | Hours per job | Price per job | A year |
|---|---|---|---|
| Annual accounts | 16 | £985 | £985 |
| Corporation tax return | 2 | £123 | £123 |
| VAT return, quarterly | 3 | £185 | £739 |
| Payroll run, monthly | 0.5 | £31 | £369 |
| Total for this client | 36 a year | £2,216.75 |
Divided by 12, that's a monthly fee of £184.73, excluding VAT. Use your own timings. The more accurately you know how long each job takes, the more accurate your prices will be.
Charge a fixed monthly fee
Most UK practices now charge a fixed monthly fee rather than billing each job separately. It spreads the cost for the client, makes your income predictable and is easy to collect by direct debit. Quote it excluding VAT, and add VAT at 20% to the invoice if your practice is registered.
Free template: accounting proposalSet out the services and monthly fee clearly, with a fee table you can adapt.Open it →Common pricing mistakes
- Discounting your rate for difficult clients. Allow more hours instead. Clients with poor records or complex affairs take longer.
- Not scoping the work. Say clearly what's included and what's charged separately, such as catch-up work or HMRC enquiries.
- Never reviewing prices. Review each client's fee every year, and whenever the work they need changes.
- Forgetting non-chargeable time. If you price as though every hour is billable, you'll fall short of your target.
Frequently asked questions
How much should I charge for bookkeeping in the UK?
Work back from the profit you want to make. Divide your target profit by your chargeable hours a year to get your hourly rate, then multiply by the hours the bookkeeping takes each month.
How do I work out my hourly rate as an accountant?
Divide the profit before tax you want by your chargeable hours a year. At 35 chargeable hours a week with 28 days' holiday, that's 1,624 hours, so a £100,000 target means charging £61.58 an hour.
Should I charge clients monthly?
Most UK practices do. A fixed monthly fee, excluding VAT and collected by direct debit, is easier for clients to budget for and gives you predictable income.