Bookkeeping: What Do Hourly Rates Mean?

What hourly rates to charge for bookkeeping bookkeeperEvery bookkeeper faces this dilema: What hourly rates to charge for bookkeeping.

So you start looking around at other bookkeeping services and seeing what hourly rate you think you should be charging.

The one big fear is that you’ll price yourself out of the market. So you decide that you’ll start low.

You’d just be happy to get ANY client. So even if you do the first couple for FREE you’d be happy. Just so you can get started.

You may even phone up other bookkeepers and ask for their hourly rate. Then you take an average, or decide what hourly rate you should start off charging for your bookkeeping services.

It’s really very much “hit and miss”. You may as well throw darts at a dart board and see if you can hit bulls-eye.

What exactly does an hourly bookkeeping rate tell anyone?

When we ask bookkeepers how quick they are, they repy:”oh I’m fast!” or “I’m very quick”

When a police office pulls you over for speeding in a 60 km/hr zone, you wouldn’t say;”Officer, I wasn’t going very fast” …

You might say this: “Officer, I was going under 60km/hr”

Experienced bookkeepers have a fair idea of what amount of work they can achieve in an hour.

We can ask a new bookkeeping client some simple questions, and give them a very reasonable estimate of how much work will be involved, and calculate the rate based on those questions.

So if you have no idea of how much you can achieve in an hour, then how can you price a job? And this is why most bookkeepers can only think of charging by the hour.
You’ll find that some bookkeeping clients may have an idea of how long the bookkeeping may take. They may even say :”I’m looking for a bookkeeper for three hours a week”

Perhaps the time taken is based on past experience of that business owner.

So if the person doing the books is not a skilled bookkeeper and takes three times as long as a professional, then the business owner will be basing hourly rates on inaccurate data.

Assume you can do the bookwork three times faster and charge double the rate. Then you’ll be saving the business owner money.

If you quote hourly rates, and the client shops around for hourly rates, then you’ve just priced yourself out of the market.

Without asking the business owner if the hourly rate is a major factor in their decision making process, you can only make assumptions.

When Bookkeepers Charge The Same Rate

If all bookkeepers charged the same rate, then bookkeeping clients would have to make a decision based on other factors.

This is why some bookkeepers find themselves going for interviews with clients but never being successful in closing the deal.

Like it or not, clients rarely make a decision based on price. They may tell you that’s the reason. But it’s not.

There’s always other reasons. We know this because people are no different whatever they are buying.

Think about it in your own situation. We’ve all used price as a reason for not making a purchase.

People will also pay more than they can justify for a product or service, believing it will ease a pain, or make their life simpler.

Like it or not SMEs need to have a great set of books. This is what great bookkeepers do. They provide a service that eases the pain for their bookkeeping clients.

Business owners need to feel confident that you’re the bookkeeper they need. Have a long hard think about what makes you stand above the crowd of local bookkeepers in your area.

Our Bookkeeping Profits Formula can help you do just that. You’ll discover how and what rates to charge your bookkeeping clients, and position yourself above all the other bookkeepers that you currently regard as “competition”.