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How To Set Your Bookkeeping Prices And Rates

There are two ways you can make money as a Bookkeeper; you can seek employment from an accounting firm (and serve under a boss who determines your income) or market your services individually and determine how much you should be paid. While working independently has its ups, newbies find it really hard to set their prices.

Before we delve into the details of how to set your bookkeeping prices and rates, let’s have a look at a rundown of important skills every exceptional bookkeeper Melbourneshould possess.

  • Flawless data entry skills
  • Good communication
  • Knowledgeable about bookkeeping principles
  • Attention to detail
  • Disciplined
  • Commitment to work
  • Possess necessary

How To Set Your Bookkeeping Prices And Rates

The amount you earn when you work as a contract bookkeeper is definitely higher than when working as an employee. Additionally, you can decide when to increase or adjust your prices which rarely happens when you are under a boss. But since you are not the only expert in the field (and competition exist), you’ll need to use online calculators to know what figure is appropriate.

Currently, most institutes of certified Bookkeepers use around $45/hour as the average fee a distinguished expert ought to charge. Bear in mind that this figure is only an estimate; market conditions can dictate otherwise.

Cost price versus the actual price

For a new business, having a cost price provides the groundwork for determining the actual price. Do not blindly come up with a figure that you think fits your services. Sometimes your services may demand a better pay but if every accountant expert in your region or niche charges a small fee, clients will sidestep you.

You need to use a value that is close to the competitors, then provide better services and along the way, adjust accordingly. Take care not to begin from a very small fee since if you’ll be needed to lower it, you’ll certainly make huge losses and be driven out of business.

Common methods of charging a client

  • By the hour
  • Prepaid time block-it’s an hourly method that’s also called flat rate hybrid
  • Value pricing- setting your rates depending on how the customer values your services
  • Customized flat fee
  • Packaged pricing- selling bundled services at a fixed rate

Charge your services accordingly

One mistake most bookkeepers commit is charging a flat rate fee for all their services. Some services are pretty simple and can even be done by the business owners themselves through the use of a software. An example of this is data entry. On the other hand, there are complex services which when subjected to a flat rate, you’ll be underpaying yourself. So, vary your prices depending on the complexity of the project.

Re-evaluate your prices from time to time

Keeping your prices at the same point for long can be good for business. Clients refute the idea of paying more for similar services they were receiving before. This can encourage them to take their business to another bookkeeper. Nevertheless, you need to change your prices since living costs and expenses increase over time. If you don’t, your business will go down the rabbit hole.

Wrapping it all up

Working as an independent bookkeeper is definitely a good idea as you get compensated fairly. However, you’ll need to come up with rates that are not bizarre. Make use of the tips in this article to set up prices that will be fair to both you and the clients.