Whether you price by the hour or offer fixed pricing, you should price your bookkeeping services according to the value to your clients, and always price for profit. This way you'll have a sustainable business that grows with you and clients who appreciate the value of an ICB Certified Bookkeeper
Your bookkeeping fee will depend on a number of factors including yourexperience, location, the availability of other bookkeepers inyour area, and the level of work that you are carrying out. You should do your research to find out what the going rate for bookkeeping is in your area.
How much to charge for bookkeeping services
InICB’s experience, on average bookkeepers charge the equivalent of £25-£35 per hour but this can range from £15-£65.
If you are inexperienced and this is yourfirst client, you may wish to charge a small fee to cover your expenses and agreetoincrease your fee once the client is satisfied. Be flexible but don’t beput-on. You should, as a minimum, cover all of your expenses includingtelephone calls, travel, stationery, postage, Practice Licence fee, insurance, software, ongoing training, etc. plus a figure for your time. Some clients may suggest a price for a specific job or set of books.
“I would suggest that if you are going to set a fixed fee, have a look at their bank statement first to get an idea of how many transactions are going through and base your fee on that, then advise the client that you will review this after three months and if you need an extra hour or so then you will raise the fee and vice versa.
“Also, make sure you have an engagement letter that states what services you will be providing for the fee and that also states that any extra services will be charged at an hourly rate, just to cover yourself.”
Meena Onihavadaragh MICB PM.Dip
“When starting work, offer an hourly fee and then review after three to six months when you have had enough time to get an understanding of what is actually happening in regards to the amount of transactions/time. You can move to a fixed fee from then on.”
Karen Moore MICB PM.Dip
“I charge all my clients an hourly fee. Many of my clients are seasonal therefore the volume of work fluctuates throughout the year.”
Angela Porter MICB PM.Dip
Once you have worked out how much you are ready to charge, bear in mind some bookkeepers have found that it doesn't always pay to be upfront about your rates.
“I used to have no sales with prospects calling and asking for my price. I learned the hard way that this just doesn't work. I now refuse to give my price over the phone, instead making an appointment to see them, and going over the work with them. I sell them on my strong points and the value I can bring their business, and once we've agreed that I am the right person for the job (providing this is really the case) only then do I tell them the price. If there is any objection, I handle that by going over the strong points again, and our agreement. This usually handles it!”
Elisabeth de Haas MICB
It might be worth accepting lower rates for subcontracted work through accountants or fellow bookkeepers - you'll spend less time with the end client, you can be sure of the quality of the records, and you're likely to get more work through the relationship.
Remember, you don't need to accept every prospect. Politely explain the reasons why, as a professional bookkeeper, you charge what you do, and don't be afraid to walk away.
Hourly billing for bookkeeping services
Whilst you may find it helpful to have an idea of your own hourly fee and how many hours a job may take, you don't necessarily need to use this figure when pricing your services with a client. Clients should understand the value of your support, the quality of your work, and your efficiency - all of which are masked by the hourly rate. Clients aren't interested in how many hours you put in, they're just worried about what they're going to get out - the value of timely bookkeeping, insightful management reports, and having their employees paid on time.
Billing by the hour also encourages clients to question why a job took so long as it's easy for them to imagine a job taking less time. And when you become faster through experience and improved efficiency, charging by the hour means you won't be able to reap the rewards you deserve.
Fixed fee billing and subscription billing for bookkeeping services
Providing an upfront fixed price for your services helps you and your clients plan. Even better, setting up automated subscription billing of a fixed monthly fee for agreed services ensures you get paid on time and helps everyone's cashflow.
Watch out for 'scope creep', high volumes of transactions, or missing paperwork, which could make jobs take longer than expected. You'll need to setclear expectations about the scale of the work based on seeing the accounts before you start work, or allowing for fee fluctuations in the first few months.
You can also set up a special rate in the first month for onboarding and getting your client set up and trained. This protects you in case the contract ends early and you don't get the full twelve months' fees you were expecting.
Within your fixed fee billing, try to allow for unexpected difficulties that could diminish the profitability of a project. You’ll also need to set clear expectations about the scale of the work, because jobs will get bigger as clients grow.
Therefore make sure to tell your client that your fees will increase as their business grows because they may have more transactions, sell more products, or may have additional company cards.
Increasing your fees
When you first start your practice you'll be desperate for clients and likely not very discerning. As your practice grows and you gain confidence and are better able to assess the time a job will take you, you may decide you need to increase your fees, or even lose some clients. It's also common to increase fees annually based on cost-of-living increases and your increased overheads. It's therefore a good idea to establish early on with your clients that there will be an annual review of prices.
You can use the annual review as an opportunity to sell additional services to existing clients, and also to weed out those 'vampire clients'. You may be surprised at how few clients resist a fee increase. Also bear in mind that the clients for whom cost is the most important driver, will likely only bring you referrals from other price-sensitive businesses. If you keep the clients that value the quality of your work, over the cost, they'll recommend you based on something other than price and are more useful to keep in your network.
Conduct & Development
Find out more about ICB's own regulations governing conduct and professional development for Practice Licence holders.
Practice Licence Regulation
Your definitive guide to regulations that affect you as a business owner and ICB Practice Licence holder.
