The politics of pricing

The fear of "difficult conversations with clients".

As anyone in business knows, working out how much to charge for your goods or services is a perpetual conundrum. Charge too much and you risk losing customers; charge too little and you might not break even. It’s a difficult balance to strike at the best of times, but the present economic climate makes the challenge even harder. Deciding what the price of your services should be – and how you charge for those services – is one of the most important decisions that you can make when you run your own practice. So you need to do your utmost to get it right.

Charging per hour has long been the tried-and-tested billing model for the accountancy profession, and with good reason. The principle is that the fairest and most transparent way to recompense someone is by paying them for their time – hence the model is also used by a range of other professionals from lawyers through to IT contractors.

Traditionally, the hourly rates charged by accountancy firms tended to be calculated on the basis that a third of the fee would cover salary costs (hence it would vary according to the seniority and expertise of the staff member), a third would cover overheads and third would be profit. While this breakdown does not necessarily hold true now – the percentage of the fee needed to cover labour has increased, for example – it helps to explain why the charge-out rates of some Big Four partners are more than £1,000 an hour.

So far, so good. Except that from the client’s point of view, charging per hour does not necessarily seem that transparent. After all, they are not sitting in your office, watching over your staff while the work gets done, so they don’t know how efficient or otherwise your practice is. There is also the risk that they will be presented with a bill that is far larger than they expected at the end of the job, which is a sure-fire way to lose their business.

This piece first appeared here.

Photograph: Getty Images

This is a news story from economia.

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Brexit campaign publishes private phone numbers of Eurosceptic rivals

Leave.EU hate the EU and hate Vote Leave who also hate the EU. What could go wrong?

Remember Leave.EU? Not to be confused with Vote Leave, which is the pro-Brexit group led by one of the former mayors with Hitler tourettes, or with Grassroots Out, which was the group with the neon green ties, or with UKIP. Even though Grassroots Out, UKIP and Leave.EU are all funded by Arron Banks, a multi-millionaire with interests in the British Virgin Islands who lives in a mansion once owned by the prog rock musician Mike Oldfield. Glad that’s all clear.

Anyway, Leave.EU still exists, even after Vote Leave was designated as the official Leave campaign – spending more of its time attacking the conduct, tactics and key figures of Vote Leave rather than, you know, that big EU thing they’re supposed to hate so much.

One of their main sources of frustration is Vote Leave’s refusal to have UKIP leader Nigel Farage as its representative in any of the EU debates. So, obviously, rather than pressing their case through normal channels, Leave.EU did what any respectable organisation would, and emailed the private phone numbers of senior figures at the BBC and Vote Leave out to its entire mailing list.

Which, needless to say, upset those people. Douglas Carswell sent a message asking for his number to be removed, so of course Leave.EU published that too.

No wonder the Brexiters are so opposed to international cooperation when they can’t even keep the peace on their own side. 

I'm a mole, innit.