It may be time for you to make the executive decision of hiring a bookkeeper to take the reins. I tried using bill.com with this particular client, but I actually didn’t really find it as helpful as I would have hoped. I often just use the bill pay directly through the bank with this client, as it’s relatively easy to do, and many banks will do that service for free. Discover the 4-step process used by hundreds of firm owners to double your prices (as soon as today) without increasing workload. Value pricing and bundling is an obvious strategy to boost your bottom line. The challenge though, can be persuading your clients to agree to it.
There is a fine line between overcharging and undercharging, but the sweet spot does exist and you’ll know when you find it, because your clients will be happy, and so will you. Templates, workflows and automations all give you time back in your day that you can spend building your client base and adding value for existing clients. Most people don’t want the most expensive option, but they also feel dissatisfied with selecting the base option because it lacks certain features. Studies show that if given three options, consumers are 66% more likely to choose the middle tier.
You can discuss your prices in advance based on the work you’ve been asked to do. It is a model businesses use to promote and sell a product or service. It has four elements, called 4Ps, which refer to what qualifies as general and administrative expenses in sales product, price, place, and promotion.
This doesn’t include the benefits that can cost up to 20% of their salary. Do your due diligence to make sure you’re billing your clients fairly. But, don’t minimize your worth and expertise in the pricing process. Partnering with Patriot earned this accountant a 50% cost savings from his previous provider, decreased his time running payroll, and more! Look at the types of services you offer and compare what you currently charge to others.
- That’s why it’s important to consider a person who has at least a bachelor’s degree.
- While these exact figures can change over time, the cost comparisons of covering your bookkeeping and accounting needs can vary greatly depending on the type of individual you hire.
- Then you multiply 40 by your old hourly rate of $40, and you decide to charge a flat $1,600/month.
- I work a maximum of 20 hours per month on this particular client’s books and charge $1,000 a month.
- Download The Pricing Playbook for practical steps for doubling your pricing without increasing your workload.
A big tip, if you’re going to any type of non-hourly billing, is to work out a price list for your services. This can be something you share or even display on your website, but it doesn’t have to be. The important part is to figure out what services you provide and how much you want to charge for them. All bookkeepers provide a certain set of tasks, so it’s hard to charge a premium for something other bookkeepers are also offering. When you’re just starting your bookkeeping practice, you may not know how long it will take you to complete regular tasks. This is also true if you start working with a new client in a new industry.
Certifications
Even if you switch to fixed fees or a value pricing structure for your main bookkeeping services, you may have additional services that command a premium. A strong alternative to hourly billing is fixed-rate (or flat-fee). It means you set a fee for each service you offer and provide clients with a ‘menu’ of sorts, with corresponding prices. You can calculate the time spent on bookkeeping tasks and translate that into dollars. If you spend too much time on bookkeeping, it’s easier to hire an accountant for a small business to keep track of your financial records, financial statements, and other elements. Outsourcing bookkeeping is a good option when you could use a hand hiring a bookkeeper for keeping track of a part of your financial management.
QuickBooks
However, if you provide less recurring services such as consulting, analysis, and accounting software support, this could be an option for you. With my small clients, I do all the regular bookkeeping tasks, such as hooking their banks up to QuickBooks Online, categorizing all their transactions, and reconciling at the end of the month. However, for this client, I employment law 101 also do receipt management, which is probably the most time-consuming task I do for this preschool. In an ideal world, all your clients would be ongoing at a fixed or value-based billing structure.
Full Time Bookkeeping Cost
To illustrate what a medium client looks like, I’ll be using a law firm I do bookkeeping for that generates about $800k in revenue a year. This firm has seven employees, which includes their attorneys and their general staff. Working a maximum of five hours per month on this particular client’s books, and charging $250 a month, I’m making right around $50 an hour, which is in the ballpark of where I want to be. Bookkeepers, especially new businesses (the ones who don’t have to make the sometimes messy transition to another pricing model), should avoid hourly billing for that reason.
Today, the trend is moving heavily towards offering small business clients certainty upfront in the price they’ll receive before the service is delivered. Though this has presented difficulties in pricing for accountants. Many accounting firms that I’ve spoken with have had bad experiences trying to explain lifo reserve and lifo liquidation adopt fixed pricing and value pricing approaches. Choosing the right price for bookkeeping services is essential to drawing in customers and preserving a successful company. Knowing how to set up your fees can significantly impact whether you’re a freelancer or managing an accounting business. This tutorial will review the different things to think about and approaches you may take to figure out how much to charge for bookkeeping services.
Step 1: Know the Basics of Pricing Strategy
And while it may not be the most glamorous topic, bookkeeping also plays a part. There are many aspects of being a business owner that drive success. Add footnotes to the bundles to mention limits and overage rates. There are two additional benefits if this method will work in your situation.