A full-time bookkeeper in a major city providing advanced bookkeeping services means a different pricing structure than a part-time bookkeeper working in a small town for a local diner. Part time bookkeepers will charge between $400 and $800 per month for basic bookkeeping, excluding the benefits. For full time services, expect to pay from $3,000 to $4,500 per month without the benefits. For outsourced bookkeeping, the price is from $500 to $2,500 per month for basic bookkeeping tasks. Instead of setting an hourly rate, or an equivalent recurring charge, you set your prices based on the value they will provide.
I work a maximum of five hours per month for this client, which means sometimes I get my job done in less time. When implementing fixed-fee or value-based billing, it’s easy to under or overestimate the time it will take you to complete a task. Having an open dialogue with clients about this when you’re first signing them can be a good idea to pre-empt adjustments down the line. A full charge bookkeeper has a larger responsibility and full oversight over a company’s finances. They advise, oversee payroll and prepare financial reports. If you’re not there already, it’s worth upskilling to get to that point, as you’ll be able to justify higher pricing packages.
Value Pricing
Whether you decide to outsource your bookkeeping or do it with an in house bookkeeper, you should be aware of the costs involved. As a small business owner, you want to make well-informed decisions about financing your bookkeeping expenses, and you want to do it correctly. Typically, you’ll want to charge your more frequent clients at a lower rate because you’re seeing them more often and reviewing their books on a regular basis.
He and the team are all about automating many of those administrative processes surrounding pricing, proposals, engagement letters and payments. Professional proposals also help to keep your accounts receivable to a minimum by stating when accounts receivable are due. You will notice services like tax preparation are simpler to define while advisory services leave more potential for gray areas. I believe one of the main challenges that accountants are having moving to an upfront pricing method is poorly defining their scope of work per month. This is easier in transactional items like accounts payable, a tax return, or tax return preparation, but all additional services should have limitations.
On the other hand, there are times you can charge a much higher hourly rate. They will appreciate the work you do, and some will even tell you so. There just seems to be a visceral objection to paying for things that don’t directly improve sales. I’ve got many stories to illustrate my point, and some even involve family. At the end of the year, during tax time, you need to send anyone who works for you as a contractor a special form called the what is payback period 1099. Regular employees receive a W-2 in January showing their wages from the previous year.
Full-service bookkeeping (and accounting)
- If the cost is similar to that of an actual bookkeeper for performing the same tasks, then it may be better just to pay someone to do the job.
- Part time bookkeepers will charge between $400 and $800 per month for basic bookkeeping, excluding the benefits.
- Many new businesses start out doing basic bookkeeping by themselves.
- Ian discussers the phases of transitioning to value pricing (setup, implementation, and execution) and walks you through the process in ten proven steps.
Occasionally, there’s a problem where I need to dig to find the solution, or my client has a special request I need to take care of, and in those cases, it will take me the full five hours. I like to calculate my rate based on my max time, but then I’m rewarded if I work quickly and efficiently. To illustrate what a small client looks like, I’ll be using a preschool I do bookkeeping for that generates about $150k in revenue a year. This preschool employs six teachers and hosts about 100 students. Discover the direct correlation between standardized processes and boosted profits for your accounting firm. Marketing the services that add value to your clients outside of your typical responsibilities is a great way to increase revenue.
However, be aware that business size does affect a bookkeeper’s workload and may lead to you paying more or even for a second bookkeeper to alleviate some of that burden. If any of these warning signs resonate with you, it may be time to hire a bookkeeper. But before you do, let’s look at some questions you should ask yourself before making the decision. Ever since my first bookkeeping job over the summer in 1990, I’ve been focused on helping small businesses grow by better understanding their numbers. If you post them on your site, a potential client can choose your services like they’d choose a combo at a drive-thru. For another great article about using pricing bundles, check out this post over at FinePoints Bookkeeping.
Part Time Bookkeeping Cost
Otherwise, you may wind up missing out on profits or scaring off clients with high rates. Consider your background, knowledge, and local market prices. While seasoned bookkeepers may charge $75–100 or more per hour, beginners may only charge $25–35. Don’t forget to consider the value you offer your clients. This method is less dependent on the unique situation of each and every one of how to use a swot analysis for nonprofits your clients and is more dependent on the pricing that you have established beforehand. You’ll need to set a menu of all of your additional services and then attach a price to each one.
I’m trying to help my client get away from that by training them to use their debit card to pay for vendors rather than having them invoice for a paper check. The best way to know if a pricing structure will work for you is by testing it. Noticing trends for the different pricing systems that you test is key to establishing the right balance.
Ways to Attract Millennials to your Accounting Firm
So, it’s important to know how much to charge clients based on location. When setting your bookkeeping services prices, consider creating different tiers for the size of the client. Some business owners want a simple income statement and balance sheet with their financial statements. Others may what do cash flow statements have to do with liquidity chron com expect a detailed report on their cash flow, and details on why the balance sheet looks the way it does. Beneath all of that, the client’s bookkeeping needs per month may require extra time before financial statements are delivered. In a value pricing approach, your accountant’s fees will differ from client to client depending on the situation.
