How Much Should A Client Pay? How do I know if I am paying a fair rate for my bookkeeper? How can I save money on my bookkeeper?
One thing customers do is (wrongly) assume that the work of putting together records for bookkeeping purposes in order to get a real set of accurate financials doesn’t (or shouldn’t) take very long. It is my experience that an average business has approximately 200-400 transactions per month and that averaged over the period of my bookkeeping business (over a ten-year span), each transaction takes approximately 2.5 minutes each https://irenasbookkeeping.com.au/.
Some entries take longer, some entries take less time. Multiply that time by your bookkeepers rate and you’ll see (about) what you should be paying them for their service for that function.
Data entry is a tedious and diligent task. If you had time for it yourself it would be done, so that is one reason why your bill may seem high to you. Re-think your mindset about how much time your bookkeeping ‘should’ take and balance it against how long it actually does take to perform those necessary monthly and daily tasks that you don’t have time for.
Bookkeepers charge one of two ways – Either a flat fee for designated and specific services or an hourly rate for things they cannot determine how long the process will take.
Normally, if you hire a new bookkeeper they will be hesitant to go with the flat fee for the first two-three months because they don’t know you yet, how easy it is to get receipts and records from you, and what the details involved are in taking care of your records.
If you are still being billed an hourly rate after the first three months then it’s time to sit down with your bookkeeper and find out how you can work together better so that you can create a more cost-effective method.
Your bookkeeper will benefit because their schedule will be better structured and they can feel confident about freeing up time they may have tentatively penciled in for you. You are dealing with a professional and they will understand.
If you need coaching or training on your accounting software or other software to track your records – spreadsheets for example, then you will pay extra for that service from a bookkeeper. Perhaps you would be more wise to seek out an online or in-house course at your local community college instead.
Hiring a Bookkeeper – Check their credentials, experience and education and references – Check it ALL.
If you are hiring the $16 an hour bookkeeper out of the paper then you will get what you pay for – Somebody who takes twice as long to accomplish a task (Now you are paying $32. an hour (or more) for that same person, plus opening the possibility up that you could have to hire a second bookkeeper who knows what they are doing to fix the mistakes of the $16 an hour person – Now you are paying $78 an hour for that work that you thought you could save some money on – OUCH).
One thing you can do to help you decide whether to hire that person is have to have that person take a simple bookkeeping test before you hire them. If they are confusing debits and credits and assets and liabilities with expenses and income then you are in BIG trouble. Not only will you be getting your books done twice, but you will probably get audited several times.