bookkeeping tips

Deciding What Bookkeepers Charge

What Should A Bookkeeper Charge

Bookkeeper Charges or Bookkeeper Fees – What Should Bookkeepers Charge!

Setting A Price When You Go Into The Bookkeeping Business

I received a Great email from “Susan” (not her real name) today and I wanted to share her question with everyone – And my Answer.  She is transitioning out of a company going out of business into her own business – Great time to start a business (by the way!).  

“Susan” wants to know how much she should charge for bookkeeping.

Hi Mischelle:

Today, I have been informed that my job is transitioning out because the company that I work for is really on the verge of going out of business.  I totally understand that they have to slash all expenses —  even personnel.  I am the Office Manager with __ years of business experience.  I have owned my own business – marketing and distribution for a ( _________) -planning markets, shows, forecasts, marketing,etc. as well as bookkeeping, customer service, fulfillment of shipments and anything else that was required for my business to be a success.  It was ___ years ago when I went back into the workforce as Office/Project Manager in the (___________) industry.  The business isn’t much better these days, but I find myself at another crossroads.

I am planning on starting my own business now — primarily for small businesses who do not want the responsibility of a full time employee with benefits, and I am now researching the hourly fee for such services as bookkeeping, administrative, correspondence composer and everything else that a busy owner does not have time for.  I would so appreciate any advice (I am also reading your articles!) as how to set my hourly rate.  I believe that I need at least $20 per hour to cover any travel, overhead, taxes and other necessities for businesses.  I tend to undervalue/undercharge for my services primarily because, oftentimes,  people just aren’t willing to “pay” for such services.

I would so appreciate your help and I already have learned so much from your articles.  Thank you in advance for your time!

          Blessings,

“Susan”

Hi,Susan, I am glad that you are reading my articles and that they are helpful.
I have tons of advice, but what I hear you saying is that you are wanting to know what rate you can charge for your bookkeeping services.
First of all, nothing you do will take the same amount of time – For instance, payroll for 1-5 people takes less time than payroll for 10-15 people, so you need to have different rates for number of people on payroll, monthly, quarterly, EOY Tax Filings, Financials, different rate for telephone help versus on-site consultation, have a standard hourly rate, but different rates for different functions and tasks . . . .For instance, I had one guy trying to get a bank loan, just always wanting me to come over and take a “QUICK” look at his financials.  Every Single time I went I got roped into creating an entirely different and new set of financials based on new information – He always left that part out and I’d spend 1-4 hours every time for a “QUICK” look at a set of financials.  I let that happen twice before I said, “No,” to a third – Free set of financials.  He now gets a quick look at his bank financials for $65 an hour.  Read Here about How To Hire An Accounting Professional
Data entry into a computerized bookkeeping system takes longer if you can’t read someone’s writing and if receipts are hard to read, there is missing information, or receipts have to be ‘unfolded’ first which is why if you have a bank statement you calculate 2.5 minutes per entry (30 entries for one statement= 2.5 x 30 = 75 minutes, or 1 hour, 15 minutes).  Some entries will take longer, some will take less time than 2.5 minutes, but it always averages out to this amount.
NEVER – NEVER – NEVER  . . . . go into a meeting with a new client without taking a contract they can sign outlining the duties you are performing for them.  Here is why – People think that what you do, “Only Takes You 5 Minutes.” but you add a bunch of those 5 minutes up and pretty soon you are working for free.  With a contract, you can legitimately say that, you were not  contracted to perform that task and you’ll have to charge extra for it – Being “nice” won’t earn you a living – just a reputation as a schmuck who works for free.  Get your contract in writing.
NEVER – NEVER – NEVER . . . .  quote your price for a job over the phone – You never get enough information on the phone to know what is involved in completing the task to finish what the client wants – they always leave something essential out and it always takes longer than you think it will.  Better to lose someone immediately by telling them you don’t quote over the phone because you don’t have enough information until you look at a job to know what it will cost to complete.  Tell them you have a standard hourly rate, but that without seeing what they have for yourself, you are shooting blind and you just can’t do it.  I’ve never lost someone for doing this.  I’ve only found out who could afford to hire me – And who could not.  If someone argues with you about this ask them if they would expect their car mechanic (dentist, attorney, plumber, heart surgeon, renovation contractor) to quote them a full price over the phone – People don’t understand “why” until you explain it that way.
To determine exactly how much to charge per item, or per hour, you first need to make a complete list of your services.  The second thing you need to do is to call a local bookkeeping company and accounting company – You can probably get a list from the chamber of commerce.  Use your list to ask what those people charge – Ask them if they ‘specialize’ in one industry over another (some accountants only take dental clients, others construction, etc . . . ).  If they don’t want to answer your questions because they feel threatened or they just simply don’t want to answer then politely thank them and hang up and call the next person on your list.  Call 5-8 people for this information.
Ask several accountants to go for coffee with you (one at a time) – Buy them coffee to get to know them for over flow work opportunities at tax time.  Ask them what memberships they belong to and find out if it’s something you might be interested in joining.
Join a couple local groups to network with.  If you end up going and the group does not meet your needs – In any way – then join a different group.  You’ll have to get to know these people if you expect them to tell their friends, business associates and family about you.
Keep your day job until you are earning a full time income.  This will take about 6 months if you are just starting (or longer).
Find out what the people in your area are using for accounting software - Learn it well.
Rates will vary from $20-60 an hour (and up) depending on your skill set and experience.  In your contract include a note that your rates will increase ___ % every year, so that you aren’t working 5 years from now for the same rate or amount that you started out with.
$20 is a good hourly rate to start, but for where I go it is low.  $25.00 is better, but the economy may not allow you to charge that rate.  And, in my humble opinion if someone is paying $20 for a bookkeeper, then they just aren’t that good at bookkeeping.  You can base your other functions on your main hourly rate , like payroll, but for regular office functions like correspondence and filing – that sort of thing, you may want to quote a lower rate (For instance – $12-18 is the industry standard).
Going online to research the titles you will be working at will show you a range of prices (from bookkeeper to accounting assistant), however also note that that range is 26% below the national average for what bookkeepers actually charge and get paid, which is why it is critical that you call the local people in your area who are doing the same thing to find out what they charge.
 
 
Professional at all times – Meaning dress and appearance as well as demeanor.  You wouldn’t go to a business meeting in your sweats, so don’t show up at someone’s home (where they do their business bookkeeping) in your play clothes.
 
 
Hope that helps – All my best!
 
 
Mischelle

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Tips and Tools

Helpful Bookkeeping Tips

BOOKKEEPING TIPS:

 

Use Bookkeeping Tips To Help You In An Audit

Audit bookkeeping tips tells you – Don’t lump all your expenses into one category like “Marketing,” Use several other categories too.

Red flags go up when you only have two (2) office expenses in your business – “Office Expenses and Marketing expenses,” for instance.

What else can you list an expense under?

Not only will you benefit from expanding your knowledge, but you will see where you were missing legitimate deductions you weren’t taking before.

Bookkeeping Tips:  Use a bokkeeping Journal, or examine your chart of accounts on your accounting software, or get a good book and ask your accounting professional to have a cup of coffee with you to go over a few bookkeeping tips on your tax notes with you!

Audit flag – A business that produces donuts and lists $2,000.00 under ‘Office Supplies’ and $10.00 under ‘flour.’  Same rule applies to internet marketing with only expenses under ‘marketing.

Bookkeeping Tips – Research and development, printing and reproduction, postage and delivery, . . .

BOOKKEEPING TIPS:  Bookkeeping Tips to Avoid Theft – Never disclose full account numbers on a computer accounting system.  

If you have online access to your computer, you run the risk of hackers getting your confidential information.  When entering your bank account into your chart of accounts for QuickBooks – Only enter the last 4 account numbers – For instance, pick “New Account”  then pick “Bank” then enter your new account on the account name line as:  ”8367-USA Bank”

Bookkeeping Tips – Entering the numbers first  speeds up your data entry too!

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BOOKKEEPING TIPS: Bookkeeping Tips That Pay Kids

Take advantage of paying kids for age appropriate tasks – as early as birth!  

Use them as models in your website videos and pay them as models.  

You can put away $600.00 a year for their college or first car – TAX FREE, and if you double whammy that by using a medical savings account – fabulous!

Five-years-old is NOT too early to begin teaching kids about money-This is a HUGE benefit for them if they already have $3,000 in a bank account that they can watch grow and monitor-with your help!

Bookkeeping Tips:  Bookkeeping Tips to help you stay Audit Proof

You may need to defend your deductions to the IRS.  Stay Prepared.

For example, If you’re having an open house or party, Have your invitation printed so that it states your business reason – “XYZ Company anounces New Product Launch.”

Take some pictures of your guests inspecting your new product, or even a video.

Have each guest write their name in your guest book or instead, you can even monitor and track your RSVP information so that you can prove a correct and accurate distribution of expenses between employees, independent contractors (IC’s), clients, and potential clients.

And make sure you list family members and friends who will not all be deductible – Unless you use them as caterers and wait persons or host/hostess/greeters/ribbon cutters . . .

Bookkeeping Tips – See if you qualify for these Tax Shelters!

Bookkeeping Tips – Avoid IRS Red Flags!

Bookkeeping Tips – Not all deductions qualify for 100% write off – Know what those are – For instance, meals expenses are usually deducted at 50% of the total cost of the meal.  Certain restrictions can either increase that write-off to 100%, or decrease it to 0%.  Ask your accounting professional for bookkeeping tips and advice on the best uses of your expenses for your specific business entity, business structure (Corporation, LLC, partnership, . . . ) and your money.

Bookkeeping Tips – For Deals and Bargains, go where bookkeepers and accounting professionals go!bookkeeping tips

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Bookkeeping Tips used wisely can save you thousands of dollars.

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