Freelance Bookkeeping Rates – How to charge a fee for your bookkeeping services

Are you new to bookkeeping?

Then you are probably unsure how much to charge for your services. This is business advice for bookkeepers and other consultants as well.

When I started my bookkeeping business in 1999, so was I. Here are some tips on what to charge.

One lesson I quickly learned is that EVERYONE wants a deal and they think you should give them one, but the moment you do, they will underestimate your services and consider it a permanent discount.

Don’t make the mistake of charging too little – Use rewards incentives and bonuses for new client referrals instead of lowering your cost to any customer. Even once, you can be the “kiss of death” for your interest sheet.

Don’t guess how much to charge. When you begin, you need to look for other professionals in your field and just ask them what rates they charge in that area. Ask them if there is a sliding scale, and if so, what criteria they use to determine these variables.

Here’s what I expect –

Small business clients would rather pay a flat fee than an hourly rate. Most bookkeepers charge an hourly rate, but charge a flat fee based on the number of transactions to enter, plus $ 5-10 (if they do not know the client beforehand). You also need to calculate these costs in your calculations – Work Compensation, Self-Tax (10% for the US) and Business Insurance.

For a basic reconciliation of bank and credit cards, data entry and monthly accounts, you work approximately 2.5 minutes per month. Entrance. Each transaction with data count is counted as “2.5.” So if you have an average small business with 200 items per Month, charge 2.5 minutes per month. Mail at least.

Experience tells me that some items will take more time and some items will take less time, but from start to finish all entries made will be balanced to 2.5 minutes per minute. At the price I charge, this means that a monthly flat fee for this customer equals 2.5 times the number of items divided by 60 minutes in total times the rate (2.5 x 200/60 x $ 45 = $ 360 per Monthly fee).

Not all bookkeepers are willing to share their fee structure with others, so don’t be afraid to ask more bookkeepers what they charge for a starting point. You will find that there are ranges with prices ranging from $ 16-60 + per hour. Choose one of the rates that feels like it covers your costs and still holds you accountable as an expert in your field. If you charge $ 16 an hour, you really need to get more experience and / or education to be taken seriously. Accounting accreditation is one way to do it. Check with your local chapter of the American Institute of Professional Bookkeepers for accreditation.

If your customer seems concerned about your fee, ask them if they could imagine a set of records submitted to their accountant at the end of the year without any problems and whether it would be a fair way to think about your fee. If they still hesitate, it is best to help them find someone else.

The benefits of hiring an accountant also include the fact that a full-time employee and payroll expenses are eliminated, computer hardware and software, and extra office space and storage for accounting purposes are not necessary.

$ 25-45 is the average cost per Time for a good bookkeeper who knows the business. For higher hourly rates, you pay for an accountant who works with an accountant. These rates reflect the fact that they work with professionals who oversee their work, and the higher rate is symbolic of a tax specialist’s review of the records in a business before going out the door of the IRS or CRA. It is worth the extra cost for many customers. For others, it is not, and these people probably do not make the best clients for experienced bookkeepers.

When you create your invoices for your own customer invoices, briefly write about the work you did for them (client) in the body of your invoice for them. It really is not necessary to add all the items to your list of services you provided to them. You just want to include a 2-5 statement outline for your client so they understand what they are paying for.

TIP: If you have a large amount on your invoice to present to them, try splitting it into 2-3 separate invoices over a month. Your clients may need you to do their job, but no one appreciates a huge bill at the end of the month without any warning. These situations lead to ill-will and short-term clients. Longevity is the key to owning and operating a reputable and long-standing bookkeeping business.

Invoice descriptions include:

“Bookkeeping services provided for November included, but were not limited to, the following: Banking and Credit Card Reconciliation and October Statement Reports, Cash Revenue Diary, Cash Payment Diary, General Journal Entries (for those on an accounting accrual method), journal and accruals. , trial balance, entries in the general ledger. If you have performed payroll services, add “payroll preparation”, “quarterly profitable tax return”, etc.

The big picture and a few details help your client understand why you’re billing the way you do. And why you are worth it!

If you have performed additional services that you choose to leave as non-billed, go ahead and add it to your invoice as a note on the bottom list of this service – For example: IRS Payroll Phone Calls 3 Hours Free . ALWAYS says “thank you.” NEVER ask a client to call with questions on your invoice.

Fee for phone consultations and training sessions at discounted rates – Unless you want to educate your clients for free and it just takes valuable time, you can spend on getting other jobs and clients. Time is money – Use your wisely to grow your business. Don’t nickel and dime clients – faxes and copies should not be billed unless they exceed $ 20.00 in your time and cost.

Always call your clients regularly – the same time every single month. Create professional invoices, even if they exist on an Excel spreadsheet. Use the last day of the month as a guideline for billing dates.

Still looking for customers?

– Browse the ads you want for people who are interested in hiring a 10-15 hour person a week. Generally, these people are less interested in hiring an employee. Call them or send your business card and resume and cover letter explaining why your service is good for them – state the benefits to them and request a phone call to discuss it.

– Join a local network group. I found that Business Networking International (GNI) not only helped me professionally with public speaking and confidence, but they also provided me with a steady and solid stream of references every single week that grew my business and kept me busy. The cost of membership paid itself in just a week.

Good luck!