Wages, traditionally, are tied to time, technical skills and tasks. That’s true whether you were paid an hourly rate or a salary. Naturally, you continue with a similar price strategy with your own accounting practice. If you find that you have a talent for and enjoy the process, you may consider starting your own bookkeeping business providing this service to others.
- When setting your bookkeeping services prices, consider creating different tiers for the size of the client.
- You earn more when considering value from the client’s perspective.
- While often used interchangeably, bookkeeping and accounting are distinct processes.
- After recording the missing transaction, ABC Company checks the final balance in its ledger against the ending balance on the bank statement.
This task probably takes me a couple hours per month to complete. If you are doing anything with payroll, this will vary widely between each client. Do your due diligence to make sure you’re billing your clients fairly. But, don’t minimize your worth and expertise in the pricing process. 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).
Fixed-rate pricing
Communicating your pricing strategy effectively to clients can seem daunting at first. But remember, transparency, clarity, and value-based conversation are key. Use the right tools, refine nonmonetary assets your skills, and let your clients see the value you offer beyond the numbers. The value-based model brings consistency and predictability, which most business owners appreciate.
Because no two clients find the exact same value in accounting services, many firms offer a menu or package pricing. This allows clients to choose the level of service they want, identifying what value they see in the offering. Pricing psychology reveals that clients certainly want choice because they all have individual wants and needs.
Why is Pricing Accounting Services Difficult?
You should be charging your clients accordingly for your services. But, you certainly don’t want to overprice your offerings. Otherwise, you could wind up losing clients to other firms (and no bookkeeper wants that).
Bronze Package – $500/month – includes:
Basic bookkeeping duties also include managing vendors and reconciling accounts payable and receivable. If your business is moving into a growth stage, you need to consider graduating to full accrual based accounting, with financial and management reports that help you scale. Typically you will need this level of financial management not only for yourself but for your key stake holders including banks, investors and advisors.
Latest Bookkeeping Advice
Do you work with wealthy clients or large businesses who expect an exceptional experience? Clients who expect a premium experience will look for products with a premium price tag. It’s good to be aware of how your competitors are pricing their services if for no other reason than so you can know where you fall on this spectrum. Even better, try to learn from how other accountants are charging for their services. Keep an open mind and be prepared to change strategies if the change will help your business. If I’m looking at a cleanup or catch-up project, I start with a paid diagnostic review so that I can get a full scope of work before I ever take on the cleanup.
Location plays an important factor in pricing, although less-so since the pandemic and the rise of remote work and cloud accounting. If you think they’re too high for you to set reasonable rates, consider lowering them. A major and effective way to do that is to move to a remote or hybrid work set-up. So to bill correctly, it’s important to identify what you’re charging for, the way you charge, and what adjustments you can make to improve your bottom line. I’m in charge of sending invoices out to their patients, so I look in the system how much we are supposed to be charging them.
Bundling services together in set packages is a good way to implement fixed-fee pricing. A common way to do this is by building a tiered system for different levels of service. It allows you to adjust your fees without painting yourself into a corner, which can happen if you provide quotes to clients when you don’t know the details of their business. Value-based pricing means pricing your services upfront based on the perceived value they have to your clients.
You’ve got both income and expenses to worry about as an owner, and keeping it all together can sometimes seem impossible. Mismanagement of your business’ money could mean less room for growth, and lack of productivity. Hiring a bookkeeping expert to help manage the ever so important nitty-gritty details of your accounts can save you time, and allow you to refocus your energy on profit growth and business strategy.
Regular reconciliation of accounts is a best practice in bookkeeping. After recording the missing transaction, ABC Company checks the final balance in its ledger against the ending balance on the bank statement. They now match, confirming that the bank account reconciliation for March is complete. This involves interpreting, classifying, and summarizing financial data to create meaningful financial reports and insights. Accounting, on the other hand, is the process of interpreting, analyzing, and summarizing this financial data. From guiding day-to-day decision-making to shaping long-term strategies, the importance of bookkeeping in driving business success cannot be overstated.
They’re looking for a bookkeeping professional who can offer strategic financial insights, such as cash flow forecasting, budgeting, and financial planning, to help drive their business growth. Your role here is not just to balance the books, but to provide strategic advice that impacts their bottom line. The pricing for these services should reflect the value and expertise you bring to the table. Customer expectations are changing, and they are now more insistent than ever on upfront pricing.
