Why Hourly Rate for Bookkeeping Ends Up Costing You More
It’s important to have an understanding of the general industry rates for bookkeepers as many bookkeepers like working on an hourly rate. This is particularly so for the reconciliation portion of the bookkeeping process, which is easy yet time consuming. Unfortunately, a lot of business owners find that when they get their final bookkeeping bill, it’s a lot like the one you get from your mechanic — way over budget!
Value pricing is best for everyone
The reconciliation portion of the bookkeeping process — that is reconciling a business’s expenses and income — is essentially fancy speak for data entry. It’s easy and well suited to an intern or junior level bookkeeper. But it’s often time consuming and tedious so some bookkeepers tend to take longer than they should, especially when they’re paid by the hour.
By using the value-pricing model instead, both bookkeeper and client end up better off. In the client’s case, they know exactly what they’ll have to pay upfront and the fee doesn’t waver.
For the bookkeeper, they’ve set a price that not only accounts for the time it should take to complete the task at hand, but they’ve built an additional fee in to the price that accounts for the value inherent in the service — i.e., the business owner doesn’t have to do this boring, tedious task.
So instead of charging $100 for four hours of reconciliations bookkeeping (at $25 per hour), the bookkeeper might charge a flat fee of $115 instead.
With value pricing, instead of charging $100 for four hours of reconciliations bookkeeping (at $25 per hour), the bookkeeper might charge a flat fee of $115 instead.
Hourly rates make bookkeepers less productive
When bookkeepers work on an hourly rate, it often makes them less productive, because they know they can bill any wasted time out to their clients. And that’s made even more likely if you don’t sign your own cheques!
The hourly rate also gives them very little incentive to innovate or incorporate new technologies into the job to save time and (your) money. For example, using receipt scanning and bank feeds, rather than manually marking transactions off a paper bank statement and entering them into your accounting software.
The hourly rate gives bookkeepers very little incentive to innovate or incorporate new technologies into the job to save time and (your) money.
Hourly rates make harder to see the inherent value in the service, when your final bookkeeping bill changes each month. It also makes it harder to plan and budget your expenses when such a key cost associated with running your business varies bill-to-bill.
Consider a Bookkeeping Internship to Find the Right Bookkeeper
The Workface CAREER ACADEMY PROGRAM contains information, resources and exercises to help bookkeepers, who people thinking of becoming bookkeepers, discover your passions and match them will job opportunities in the financial, administration and accounting industry. Similarly, we can provide businesses with inexpensive bookkeeping options carried out by our bookkeeping interns looking to gain valuable, real-world experience.
We also have a Professional Placement Program for bookkeeping interns who:
- have some bookkeeping qualifications
- may have had some bookkeeping experience (although not essential)
- are willing to volunteer as an accounting intern as part of our Professional Placement Program
You’ll receive training, guidance, project-based placement goals and a program manager. Even more, this placement can help you forge a working relationship which may result in an accounting job or contracting opportunity that suits your skills and lifestyle.
— Find out more, including the typical duties an intern provides, by visiting the Workface website today —
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