February 10, 2023
Your bookkeeper will go over your reports to help you understand your financial situation, but may not provide financial or business advice (even if they’re a credentialed CPA). Because your bookkeeper can’t represent your business before the IRS, they can’t give tax advice or guidance. Team up with your very own QuickBooks-certified bookkeeper who understands your industry and gets to know your business. Terms, conditions, pricing, special features, and service and support options subject to change without notice.
You will also be in a better position to outsource more advanced management accounting and controller. For example, there are smaller, independent bookkeepers that specialize in certain services or business types. Or you may want to go with a large firm that takes on a high volume of clients for a lower rate.
On top of this, it is also a bookkeeper’s job to keep everything organized. That way, when it is time to file your small business taxes, you can easily access all the data you need. For this client, I do some tallying of their hourly employee amounts and then note how much is deducted for their health insurance and retirement savings. All I need to do is fill out the spreadsheet, and then I send it off to the payroll department. Another extra task that I do for this client is to write checks for this preschool, so I am a signer on the bank account. It’s unusual for the bookkeeper to be able to write and sign checks, but because it is such a small business, we have our duties divided a little bit differently than it may normally look.
Veronica Wasek from 5-Minute Bookkeeping has a great pricing strategy. For her fixed-rate pricing, I believe she does the 1-3% for any clients that are $300k or below. For a client who’s revenue starts at $300k and goes up, she will insert a base of $400 and then add on any extra services they may need. Starting with an hourly rate with a new client is beneficial because usually it will take more time to get their books set up, as they could have been quite a mess before you took them on. You may be helping them play catch-up to get organized not only in the current year, but also in previous years.
Full-service bookkeeping is everything you’d find in basic bookkeeping with additional accounting services and financial statement analysis. According to Glassdoor, it costs about $42,000 a year to hire a bookkeeper for your small business. But, this cost can vary based on additional factors such as your bookkeeping needs and where you run your business. 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 also do receipt management, which is probably the most time-consuming task I do for this preschool.
You discover that it takes around 40 hours per month to complete your monthly bookkeeping tasks. Then you multiply 40 by your old hourly rate of $40, and you decide to charge a flat $1,600/month. What is the difference between small, medium, and large client accounts for bookkeepers? Let’s break down the different sizes to their revenue, employee numbers and other key metrics. Then we will compare this to the fixed-rate monthly pricing I charge for bookkeeping services along with the bookkeeping tasks I do for each one.
You will need to understand your client’s needs and what they are willing to pay for your services. You may also need to negotiate prices with clients, which can be time-consuming. The main downside to fixed fee pricing is that it can be difficult to estimate the time needed to complete the work. You may lose money on the project if you underestimate the time needed. Additionally, if the job takes longer than expected, you may also lose money on the project.
Before you decide to hire a bookkeeper, you may be wondering what services you’ll be paying for. These professionals do a lot of different things, but not every bookkeeper does every service, or they may charge extra for specific tasks. According to ZipRecruiter, as of July 2021, the average annual pay for a freelance bookkeeper in the United States is $55,094 wave accounting 2021 a year. This works out to be approximately $26 an hour, over $1,000 a week, or $4,600 a month. Of course, rates and salary can vary depending on the person’s education, certification, skills, years of experience, and other factors. Bookkeeping is an accounting process of recording and maintaining accurate records of your company’s financial transactions.
If your monthly average is $10,001-50,000, the monthly price for QuickBooks Live is $300. If your monthly average is $0-10,000 per month, the monthly price for QuickBooks Live is $200. If you invoke the guarantee, QuickBooks will conduct an evaluation of the Live Bookkeeper’s work. This way of charging has changed quite a bit now that we have QuickBooks Online. The actual inputting of transactions isn’t what is taking the most time. What is taking the most time is being aware of their finances, organizing things, and pulling reports.
As a result, what you charge for your bookkeeping services reflect your expertise rather than the tasks. You client list fills with high value clients who are not price-sensitive or question your fees. This is the most common way to charge for your bookkeeping services, especially when you first start out. Whether you’re hiring in-house or outsourcing your bookkeeping, finding someone that has the right software tools to make finance management easy is important. What I recommend when you’re starting out is to begin with your hourly rate and transition your client into a fixed monthly rate.
Therefore, you generally want to charge a small client less because they have fewer needs. You can also choose to withhold services until the invoice is paid. For example, if you are doing monthly bookkeeping, you can withhold the next month’s services until the current invoice is paid. Once you decide what to charge, you’ll also need to consider additional terms for collecting payment from your clients. Hourly billing can be a good option for bookkeepers because it is simple to implement.
However, it is true that the bigger the account is and the more transactions they have means the more time it’s going to take you. 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. As you’ve seen, there are several solutions to this bookkeeping dilemma, but they also come with additional questions you should keep in mind before making a decision. To help you on this decision-making journey, we’ve gathered four questions to ask yourself before hiring a bookkeeper. But who wants the task of sifting through receipts and organizing statements when there’s a whole slew of business operations to attend to?