I struggled with various issues when trying to come up with a price for my bookkeeping services for years. I tried to determine a price by counting transactions, and then I tried it by linking it to the number of bank accounts. And once I’d finished preparing all of that, I’d worry about whether the client would even go for my pricing after I spent hours trying to calculate just the right number. How much a bookkeeper costs also depends on the payment arrangement. You’ll usually pay for bookkeeping services in one of the three ways—hourly, salary, or a flat fee.
Maybe the freelancer is experienced in a single software and charges a lower rate for it. You can also find experts in numerous accounting software that charge more. The number of tasks you assign to them directly impacts the price of each bookkeeping service. The more experienced the bookkeeper, the more confident they are with their skills.
Hourly Pricing (Freelance)
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. When you’re calculating your rates, especially in a new location, doing local research is crucial. Ask other bookkeepers about services, rates, and gather any other information about working in your area that will help you stay competitive. Generally, small to medium-sized businesses expect to pay between $500-$2,500 USD monthly for their outsourced bookkeeping—an dauntingly large range to deal with. So, don’t be afraid to boast about your experience while marketing your accounting firm.
- I like to calculate my rate based on my max time, but then I’m rewarded if I work quickly and efficiently.
- When you’re first starting out, it’s hard to get a grasp on that, though, which is why I like to put it based on terms of approximate hours worked.
- For example, the appointment may have cost $300, the insurance covered $200 of the charge, which leaves $100 as the patient’s responsibility.
- Simple tasks might have lower rates, while tough jobs that need lots of skill could cost more.
- Then, as you gain experience and niche down, you can charge up to $80 or sometimes more per hour.
A guide to help you work through the big decisions around starting a bookkeeping business. There are many models for charging clients but they essentially fall into three main categories. You have two levers to drive profitability – money in and money out. Money out (or expenses) is affected by many things like efficiency, marketing, technology, staffing and more. Money in is driven by the volume and value of work, which can both depend on pricing. Join our email list for offers, and industry leading articles and content.
Flat-fee pricing
Next, don’t refer to your pricing as a “fee” or “charging by the hour”, always refer to it as “pricing”. This is one important way https://www.bookstime.com/articles/how-much-does-bookkeeping-cost to remove emotion from pricing your services. That said, being outside a major metro doesn’t necessarily mean low salaries.
- Take your hourly rate times the amount of time you believe it is taking you each month and add a little more on top of that for added expenses.
- I do not offer full-service payroll as a bookkeeper, and I don’t do payroll in QuickBooks, but my clients have a payroll service they use.
- They get to know your business well, which can make them more effective at their job.
- 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.
- Danielle Bauter is a writer for the Accounting division of Fit Small Business.
- You client list fills with high value clients who are not price-sensitive or question your fees.
- These certifications show that they know a lot about bookkeeping.
