Ask an accountant: agencies
The questions salon owners and chair renters actually ask, answered the way they would be answered on a call: the short answer first, then why, then the free tool if there is one. Rates are those applying in 2026/27.
21 questions, answered plainly
Built from cost, not from the agency next door: the demo £42,000 fee-earner costs £63,623 fully loaded, £55.61 per billable hour at 65 per cent utilisation, and needs about £593 a day for a 25 per cent margin or £881 to bill three times salary. Run your own numbers and round up.
By role, then blended: around 75 per cent for production roles, half for player-coach leads, zero for whoever sells. The demo floor blends to 65 and runs 58, and those seven points cost £56,364 a year. Measure per person, weekly, against the role target.
Recovery: billed hours reaching the invoice below the card. The demo £700 rack realises £610, and across the year that quiet 13 per cent discount costs £68,904, the larger of the two leaks. Hours reports, counted rounds and signed writedowns are the fix.
When salaries, overheads or utilisation move, which is at least annually. Rebuild from cost, round up to card prices, announce with confidence and grandfather briefly. A card that has not moved in three years is a pay cut the agency chose.
Weekly burn against budget while the project is alive, and a change order that takes five minutes. The demo project burned 32.5 per cent over and landed 16 points of margin lighter, almost all of it scopeable: counted deliverables, written assumptions, rounds of amends included and priced after.
Scope it in hours with a meter: the demo £4,500 for 45 hours is £100 an hour until 62 hours go in and it is £72.58. Send the hours report with every invoice, borrow inside the quarter, and renew on the ledger: £6,200 for the hours really used, or the scope back down, chosen together.
Counted deliverables with dates, assumptions in writing, what is OUT, included rounds of amends, change control, stage payments, terms of 30 days with statutory interest stated, a kill fee and a named approver. One page of it protects more margin than any pitch win.
Deliberately and rarely: price the true cost first, cap it, and book it as new-business spend rather than pretending the project broke even. A logo bought with £3,880 of pitch cost plus a discount is an acquisition cost the fee has to repay.
They are fine while they are genuinely in business: their own company or UTR, insurance, other clients, outcomes not rotas, and a real right of substitution. A small-company client leaves the status call with them; grow past the small thresholds and the determination becomes yours.
When the pipeline covers their hours, not when everyone is tired. The demo £38,000 hire costs £58,903 fully loaded and breaks even at £412 a day at honest utilisation; at the realised £610 they should make £28,327. The margin only exists if the hours do.
Compare full costs, not headlines: the £42,000 salary is £63,623 loaded before a single billable hour, and the bench carries its own quiet weeks, kit and insurance. Freelancers are dearer per day and cheaper per fallow month; the mix is the answer.
Sell them as pricing telemetry, not surveillance: cost comes from hours, and bad data means underpriced work and missing pay reviews. Two minutes daily, codes matching the project tracker, results published weekly at floor level, no moralising.
Team hours at the loaded rate plus hard costs: £3,880 for the demo pitch, and at a one-in-four win rate £15,520 per client won. Hold that against the first-year fee before saying yes to the beauty parade.
Only when the prize carries the arithmetic: the cost per win against the first-year fee, decided per invitation in the pipeline ledger. Qualifying harder raises the win rate and cheapens every client; declining early is the cheapest pitch there is.
Qualified pitches convert around one in three or four for most agencies; much below that is a qualification problem, not a creative one. Track it in the pipeline with the pitch cost attached, and the ledger will say which invitations were never real.
Percentage of completion from the project lead against the plan, never from hours burned: fee times complete less billed is the WIP, positive accrued, negative deferred. The demo cut accrues £4,800 on one job and defers £3,600 on another, and the month is true.
Chase on the contract: statutory interest at 8 per cent over base is in your terms if you put it there. Stop work where the SOW allows, and if it goes truly bad, VAT bad debt relief arrives six months after the due date. Month eleven chasing beats month thirteen providing.
The WIP cut: optimistic percentages invent profit that next year quietly repays. Honest percentages, freelancer accruals, bonuses minuted before the year end and paid within nine months: the swing becomes a line.
Enough weeks that losing the biggest client is a plan rather than an emergency: the 13-week forecast makes the number concrete, and stage payments tied to deliverables keep it funded. Payroll businesses do not get to be surprised by payday.
The three operating numbers, utilisation, realised rate and the WIP position, plus the portfolio margins, the pipeline priced, and cash to thirteen weeks. One page, computed from the ledgers, monthly: the Board Pack Template holds the shape.
Rarely for client work, honestly for genuine platform or tooling development that resolves technical uncertainty. The claims industry oversold agencies for years and enquiries followed; the SaaS hub carries the full, honest treatment.
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