how much to charge for bookkeeping

Please see the chart below with data pulled directly from the US Bureau of Labor Statistics 2022 data to learn more about the average salary and hourly rate for bookkeeping. In an ideal world, all your clients would be calculating the intrinsic value of preferred stocks ongoing at a fixed or value-based billing structure. They would know what services to expect from you, and you could charge an automatic, monthly fee. But the hourly rate is becoming outdated with the dominance of technology. Tech makes once time-consuming work quick, and in many cases, effortless.

how much to charge for bookkeeping

Hourly rates

This provides visibility to optimize cash flow and margins. Compared to standard bookkeeping, project pricing gives more focused, day-to-day financial insights. I work a maximum of 20 hours per month on this particular client’s books and charge $1,000 a month. To illustrate what a large client looks like, I’ll be using a physical therapist office I do bookkeeping for that generates about $1.2 million in revenue a year. This office employs 10 speech pathologists and general staff and circulates child clients who come in for their services. I work a maximum of 10 hours per month on this particular client’s books, and charge $500 a month, which still comes out to be roughly $50 an hour.

  1. For one-off tasks like “QuickBooks setup” or “Create annual budget”, set a price to complete that task.
  2. For example, in Massachusetts, in-house bookkeepers earn 20% more than the national average, whereas in Kentucky, they earn 22% less than the national average.
  3. This means that regardless of a service’s value to your clients, you’re capping your pricing based on how long it takes to deliver that service.
  4. Once you feel comfortable with their business and how they work, then use those hours to calculate a fair value-based fee to charge in the future.
  5. Rather than hourly billing, some professionals offer flat monthly fees for defined packages of services.

Overall stats of a medium client

When deciding if you should do your bookkeeping yourself or hire outside help, the decision is entirely up to you. For example, if you have the time to handle bookkeeping yourself, you might continue to do so to save money. On the other hand, if you’d like to use the time you spend bookkeeping focusing on other aspects of your business, then the cost of a bookkeeper may be worth it.

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. Many new businesses start out doing basic bookkeeping by themselves. However, as you start spending more time growing your business, you’ll tire of performing the bookkeeping tasks. Hiring a bookkeeper that totally understands your industry and its regulations is an important distinction to make when you’re looking for the right person or team to fill the job. Businesses in the hospitality or property management industries may need different financial services than business owners of a restaurant franchise.

Having everything centralized in TaxDome helps us, the allowance method definition and it helps the client. The main types of checks I write are reimbursement checks if the teacher buys supplies with her own money, or certain vendors will send invoices, and I will write a check for those. 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. While this isn’t a new concept, the term value pricing has been more popular lately with bookkeeping and accounting professionals. I like this method when getting started with a new client.

Bookkeepers have a wide variety of skills, so one of the factors you need to consider is what you need them for. If it’s basic client billing and documentation, a good solution may be accounting software that can assist you if you still want to play a more hands-on role. Full-service bookkeeping is everything you’d find in basic bookkeeping with additional accounting services and financial statement analysis. 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. Otherwise, you may wind up missing out on profits or scaring off clients with high rates. Do your research ahead of time to find average rates for services in your state.

How much should I charge for bookkeeping services? 6 Factors to consider

Discuss how bookkeepers leverage software, automation, and how to calculate the asset turnover ratio AI tools to maximize efficiency and minimize manual work. This can result in significant time and cost savings that get passed on to you. For example, reconciliation software, invoice automation and receipt tracking apps.

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. As you might have figured out from the sheer volume of this post, it’s a topic I spend a lot of time thinking about. Based on my research with fellow bookkeepers, there isn’t one (or two, or three) answers either. 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. Once you put together a good system, including a pricing list and some standard bundles, this is a great way to bill for your services.

Factors That Affect Bookkeeping Rates

Now that you know the answer to the question “How much does a bookkeeper cost? You may also consider using online bookkeeping services and accounting software to save time and money, all while meeting your bookkeeping needs. Have an open conversation with prospective bookkeepers to disclose any potential hidden fees or limitations upfront so there are no surprises. Understand if there are caps on service hours or transactions included in monthly fees. Ask if tasks such as financial analysis or tax preparation incur additional charges.

Consider how frequently you provide services to a client when making up your mind about what to charge. Some clients will be a one-time deal, while others may need you on a regular basis (e.g., quarterly). Look at the types of services you offer and compare what you currently charge to others. If a client takes advantage of multiple services, charge accordingly. You may also want to increase pricing depending on what services are in demand and when they’re being taken advantage of (e.g., last-minute requests). So, don’t be afraid to boast about your experience while marketing your accounting firm.

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