You are very welcome to this, the second instalment, of Query Of The Week. Each week our technical team respond to a massive number of client queries. The purpose of Query Of The Week is to share with you the most common questions that keep coming up time and time again.
Last week we were working with a client on a restructuring project. We were advising on the tax implications of a Cash Extraction which resulted in some Company Secretarial work which we completed for them. We were then surprised when the accountant asked us “What should I be charging my client for this work?”. Now, this is a question that we have fielded many times before so we decided to shoot this week’ Query of the Week on this topic.
Building Your Co Sec Practice
If this Query Of The Week was of interest to you, you will also be interested in our Building Your Co Sec Practice online CPD course.
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|CPD Allocation||1 Hour|
|Fee||€20 (or 1 CPD Club point)|
|Presenter||John Murphy – OmniPro|
Query Of The Week – Video Transcript
(Please note that this is a direct unedited transcript of the spoken word as recorded on the video)
We were working with a client doing a restructuring. They were doing a little bit of cash extraction for one of their clients and we had helped them a little bit with the tax side of things, we were doing the Company Secretarial work for them. And in one of the conversations, we’d agreed on our bill and our fee in an advance. And then the client kind of said to us, “What should I be charging my client for that?”
We started a conversation about the value, and the tax saving, and the knowledge that they brought to the table in executing this transaction. It was really interesting because we could see the penny dropping with them, and them going, “This is really valuable stuff.”
Then they came back and the asked another question. They said, “Well, what should I be doing with my basic Company Secretarial compliance services? Should I be charging for that separately and placing a separate value on it? Or what should I be doing there?”
This query is interesting because from a company’s secretarial perspective, it’s not one that you’re going to find the answer to in Companies Act 2014, and you’re not going to find the answer in an institute handbook.
First of all, let’s look at basic Company Secretarial compliance. I have a question for you. Do you charge for it? Do you charge separately? Is there are a separately identifiable bill that people know they’re paying X for their Company Secretarial?
This is an extremely divisive question and when I go around the country, an awful lot of people will answer that question, “No.” And some people in the room will answer, “Yes.” You see, there are over 215,000 companies live on the register. Not all of those companies are being managed by accountants. Chances are, the ones that are not being managed by accountants and not being self-managed, those people are being charged a fee for the annual Company Secretarial compliance.
When you look at the accountancy market, the accountants are in control and manage the majority of these companies, it’s a split market. Some do, some don’t. I believe that accountants should charge for their annual compliance services. I really believe they should.
When you’re doing annual CoSec services, a directors meeting, AGM, notice of AGMs. Maybe you’re doing your AGMs by written resolution but there’s a written resolution piece. There’s maintenance of the registers. There’s the completion of the B1. There’s the drafting, signing, and the whole process around abridged accounts. Everything has to be filed through CORE. Then there’s the maintenance of the registers. And now looming on the horizon, the beneficial owner’s register.
That’s actually a reasonable amount of work. We don’t like getting nitty gritty with clients. We don’t like charging them for every second of our time, but there is a value on that Company Secretarial compliance service. There is a value. Have you communicated that value?
I cannot tell you what the fee is, but I would strongly suggest that irrespective of where your practice is, if you have not been putting the value on this, you put an attributable value on it. Some people watching this video will think I’m mad. And they’ll say, “What? “Are people out there who don’t charge for Company Secretarial?” Your fee depends on the value you provide but more to the point, the perception of value by your client.
Now, Company Secretarial compliance services, that’s very much a need-based service. It’s a need. The person who came to us with the query, when they were doing the restructuring and they were basically transferring, they were blending the requirements of Companies Act 2014, Summary Approval Procedures, share buybacks. They were linking into tax advice. They were being cognizant of the implications of the latest changes in Budget 2017. But the net result was they were transitioning a business and optimizing the wealth for those people.
Company Secretarial compliance is definitely a need driven service. But you’re more advanced Company Secretarial services, it’s consultancy, it’s advisory. This stuff has an opportunity to make a huge difference. So they pay for it and to charge for it, but again, the question comes back down to pricing.
How do you communicate that value? Do you issue fixed fees in advance? Do you value price? Actually, before we even get to pricing, are you exploring and identifying the opportunities in your client base to provide these types of value-added services? For you, as an accountancy firm, if you are asked the question that we’ve been asked about your pricing approach to basic Company Secretarial compliance, but also advanced Company Secretarial compliance, if you really looked at this, what additional fees could you generate?
We all know this. It’s always easier to charge additional fees for value-added services to existing clients than it is to acquire a new client. What if you took Company Secretarial this year, and drove Co Sec to drive your bottom line. Your top line revenues, which will probably fall to bottom line profits, because it’s not going to require a huge amount of additional work. You’re already doing most of the work anyway. It’s just a question of are you taking credit for it and is the client placing a value on what you do?
If you have any kind of an interest in growing your revenues and your Co Sec practice, join me here on the sixth of July, at half three, for our webinar on building your Co Sec practice. Until I see you then, let’s get it done.