The 5 Minute Guide to Bookkeeping Rates

Do you find yourself struggling to figure out the best way to handle your bookkeeping rates?  Should you charge by the hour or is there a better way?

To begin with, always start off new bookkeeping clients by charging by the hour.  Don’t ever let new clients try to talk you into quoting a flat fee before you’ve had a chance to look at their paperwork.

This is because many well-meaning small business owners have no clue what information you require.  So either they’ll throw absolutely everything at you or have huge gaps in paperwork that you do need.  This results in lots of wasted time spent tracking stuff down and sorting stuff out.

Generally when a new client comes to you they will be somewhat behind in their paperwork.  This can vary from several months to several years. 

That’s another reason you want to start off your bookkeeping rates by the hour.  You want to make sure that you are paid adequately for sorting out their bookkeeping because it can take many hours spaced over several months to get them caught up again.

By the way, don’t forget to always get a retainer up front when taking on a new client as well.  Lawyers and accountants do it and so should you.  The only exception to this is if you know the person well and feel confident that they will pay your bill on time.

Now, I can tell you from personal experience that keeping track of your hours can be a bit of a pain.  But you do get in the habit of always checking the time before and after you start working on a client file and making a note of it.

That’s why I like to switch my bookkeeping clients over to flat bookkeeping rates after I’ve done their books for a few months.  This means after about three months of doing a regular month’s work for them, I’ll come up with a flat rate and charge them that.

Usually by the third month of doing the client’s books, I’ll have a feel for how long it takes.  Each set of books has its own “personality” and it takes awhile to become familiar with each one.  Also, by then I’ll have systems and “recurring entries” setup to make the job go more smoothly.

So to come up with this flat rate, just take an average of how long it takes you each month to do all the work required for this client and then add a little more as a buffer for year-end.  You can always adjust this up or down as needed at a later date.

Clients love this because they know exactly what you’ll be charging them every month.  Of course its win-win for you as well as you’ll have a regular income that you can rely on.

Offering flat bookkeeping rates really is the best way to go when running your bookkeeping business because you don’t have to keep track of your hours and you get paid the same amount every month.

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