The Core Pricing Principle: Market Rate, Not Cost-Plus
The most common pricing mistake UK accountants make when they first outsource to India is to price at cost-plus — they calculate what the Indian firm charges, add a margin percentage, and quote that to the client. This approach leaves money on the table and misrepresents the value you provide.
Your price should be based on three things: the complexity of the client's books, the scope of work you are delivering, and the market rate for that scope in your region. What you pay the Indian CA firm is irrelevant to the client and irrelevant to the pricing conversation. A practice in central London billing £550/month for bookkeeping a 200-transaction-per-month limited company is delivering the same outcome regardless of whether a UK bookkeeper or an Indian CA prepares the draft accounts.
The offshore delivery model does not change your price. It changes your margin. That distinction is important — and profitable.
UK Market Rates for Bookkeeping by Client Type
Before setting your fees, benchmark against the market you serve. UK bookkeeping rates vary significantly by client complexity, region, and the practice's positioning.
| Client Type | Typical Monthly Fee (UK Market) | Indian CA Firm Cost | Your Gross Margin |
|---|---|---|---|
| Sole trader (low volume) | £150–£250 | £60–£90 | 55–65% |
| Sole trader (VAT registered) | £200–£350 | £80–£120 | 60–70% |
| Limited company (standard) | £300–£500 | £90–£150 | 65–72% |
| Limited company + payroll | £400–£650 | £120–£180 | 65–72% |
| Property landlord (1–5 properties) | £250–£450 | £80–£130 | 65–70% |
| E-commerce (Shopify/Amazon FBA) | £400–£700 | £130–£200 | 65–72% |
These are market rates, not guaranteed margins. Your actual margin depends on your review time per client. A clean, low-volume sole trader requires 1 hour of UK review per month; a multi-entity property investor with mixed-use assets may require 3–4 hours. Price complexity accordingly.
Calculating Your Review Cost — The Number Most Practices Get Wrong
The Indian CA team handles preparation. You handle review and sign-off. Your review time is your primary cost on the UK side, and most practices underestimate it when they first start outsourcing.
A realistic review time breakdown by task:
- Bank reconciliation check: 15–20 minutes per account per month for a clean file
- Transaction coding review: 20–30 minutes for a 150–300 transaction client
- VAT return review: 30–45 minutes including query resolution and MTD submission
- Management accounts review: 20–40 minutes depending on complexity
- Query handling: 15–30 minutes average per client per month for back-and-forth with the Indian team
Total: 1.5–2.5 hours per standard limited company client per month. At a UK reviewer cost of £40–£60/hour (salary-equivalent, not billing rate), that is £60–£150 of UK-side cost per client per month. Combined with the Indian firm's fee of £90–£150, your total cost of delivery is £150–£300 per client for a service you bill at £350–£500. That is a sustainable and profitable model.
How to Structure Bookkeeping Fees for UK Clients
Fixed monthly fees are the standard for bookkeeping services in the UK. Hourly billing creates uncertainty for clients and review disputes for your practice. Structure fees as follows:
- Base fee: Covers standard monthly bookkeeping scope — bank reconciliation, transaction coding, VAT preparation, management accounts. Quote this as a fixed monthly figure for the first 12 months.
- Scope add-ons: Payroll, additional VAT schemes (flat rate, margin scheme), multiple bank accounts, multi-currency — each priced separately as a monthly add-on.
- Out-of-scope work: Historic cleanup, additional entity work, ad hoc analysis — quoted as a fixed project price or hourly rate, agreed before work begins.
- Annual review: Review all fees annually. Adjust for complexity changes (business growth, additional employees, new product lines) rather than just applying an inflation uplift.
Provide a written fee schedule at engagement. This protects you from scope creep and gives clients clarity — both of which reduce difficult conversations later.
What to Say When Clients Ask Why Your Fees Are Competitive
UK practices outsourcing to India sometimes worry that their pricing will appear too low and trigger client suspicion. The opposite is more common: clients appreciate competitive pricing and do not investigate the reasons for it.
If a client does ask, the honest and confident answer is: "We use a specialist team to prepare your books, which I review and sign off personally. Using a specialist preparation team lets us keep our fees competitive while maintaining qualified CA oversight throughout." This is accurate, professional, and reassuring — you are not hiding anything.
What you do not need to do: explain that the team is in India, justify the cost differential, or apologise for not using UK-only staff. Professional sub-contracting is standard practice across all service industries, including accounting. Your engagement letter covers it. Your professional indemnity insurance covers it. Move on.
Pricing New Clients vs Migrating Existing Clients
New clients are straightforward — quote at market rate using the framework above. The offshore delivery model is irrelevant to them; they see only your practice name and the price.
Migrating existing clients is more nuanced. If you currently deliver bookkeeping with UK staff and are switching to an offshore team, your client fees should stay the same or increase — never decrease as a result of the switch. The offshore model reduces your cost; it does not change the value you deliver to the client. Reducing fees signals that you were overcharging before, which undermines trust.
If your existing fees are below market rate, use the transition to an offshore team as an opportunity to review and increase them based on market positioning — not linked to the delivery change. Communicate the increase as a reflection of the quality and scope of the service, not as a cost adjustment.
Explore our UK outsourcing services page for more detail on how UK practices structure their offshore arrangements.
Written by Sharma Jyoti, CA (ICAI) — Founder, Sharma Jyoti and Co. We are an ICAI-registered Chartered Accountant firm providing outsourced bookkeeping and accounting services to Australian, US, UK and Canadian businesses. Learn more about our firm →