Like so many aspects of accounting, bookkeeping involves a lot of repetition. Since you often do the same work for multiple clients, there’s no reason to start from scratch each time you calculate your pricing. This article will look at the factors that should go into your pricing, how to market your services, and mistakes to avoid when calculating your prices.

 

Factors to Consider as You Figure Out Pricing for Your Bookkeeping Services

There are several variables to consider when calculating your pricing.

The first is your overhead. Overhead includes your fixed costs, like office space or software, and your variable costs, like travel expenses. Ensure you have a good handle on all the costs associated with running your business before setting prices.

Next, think about how much time it will take you to complete the work. This will vary depending on the size and complexity of the project, but it’s important to have a general idea of how long it will take you to do the work.

You should also consider your experience level and expertise. If you’re a small firm owner just starting, you may want to consider charging less than someone who has been in the business longer. You don’t want to underprice your services. However, having a low price may get your foot in the door. 

Consider the value you’re providing to your clients. This includes things like peace of mind and saving time. 

 

Size of Client

The size of the client company is also an important factor to consider when pricing your bookkeeping services.

If you’re working with a large company, they may have more complex needs and require more work from you. In this case, you may want to charge a higher price. They may also need specialized additional services and reporting.

On the other hand, if you’re working with a small company, they may have simpler needs and require less work. In this case, you may want to charge a lower price. Remember, even small businesses can be complex and may need additional support because they have fewer resources.

 

Location

Another factor to consider is location. If you’re located in a major city, you may be able to charge more than someone in a smaller town. Clients in major cities may be willing to pay more for bookkeeping services than clients in smaller towns.

However, remember more accountants and bookkeepers are working remotely. There is a larger pool of service providers competing for the same jobs. 

 

Types of Services Offered

The type of bookkeeping services you offer will also affect your pricing.

You may want to charge a lower price if you only offer basic bookkeeping services, like data entry and financial statements. The price should match the time you expect to spend completing the work each month.

On the other hand, if you offer more complex services, like tax preparation or strategic planning, you may want to charge a higher price. Again, you should consider not just your time. Also, consider the value you are providing for your clients.

 

Market Rates

It’s important to consider market rates when pricing your bookkeeping services. If you live in an area with many bookkeepers, you may need to charge a lower price to compete.

If there are few bookkeepers or very high demand in your area, you can command a higher price for your services. Additionally, if you come highly recommended by other local businesses, you can typically charge higher prices. Make sure to keep your clients happy and let them know you appreciate referrals. 

You can get an idea of market rates by talking to other bookkeepers in your area or searching for bookkeeping services online.

Remember, you’re also competing against remote bookkeeping firms, although many business owners are still reluctant to turn their financial information over to anyone other than a dedicated bookkeeper. 

 

Hourly Versus Project-Based Pricing

Once you’ve considered all the factors above, you’ll need to decide whether to charge an hourly rate or per project.

Hourly pricing is typically seen as a better option for bookkeepers who are just starting out or don’t have much experience.

Project-based pricing can be good for bookkeepers who are more experienced or have a good idea of how long the project will take. The risk with project-based pricing is that projects may take longer than you estimate, or the scope of the project grows beyond the initial proposal.

To decide which type of pricing is best for you, consider your experience level, the type of work you’ll be doing, and the needs of your clients. Once you’ve considered all of these factors, you should have a good idea of how to price your bookkeeping services.

 

Payment Fees

When pricing your services, one item to keep in mind is which types of payments you will accept. If you accept electronic payments (either credit cards or ACH payments), you’ll want to consider the cost of payment fees. 

Though they may seem relatively minor, 2-3% fees will quickly eat into your profits. When setting your prices, ensure you are charging enough to cover these fees.

 

Productizing Your Services vs. Offering Custom Services

Productizing your services means you offer a set package of bookkeeping services for a set 

price. This is a good option if you want to simplify your pricing and make it easier for clients to understand what they’re getting.

Bookkeepers who productize their offers usually have different pricing plans that include various services. For example, a basic plan may include a monthly bank reconciliation for two accounts and financial statements delivered monthly. A higher plan may include several hours of monthly phone support, account payable collections, and coordination with a tax preparer at year-end. Productized services usually have a flat monthly fee.

Offering custom services means tailoring your services to each client’s needs. This is a good option if you want to offer a wider range of services. For custom pricing, you’ll need a general idea of how much you charge for each service and then consider if the total cost for all the services for the client is reasonable. With customized pricing, you can either charge a flat monthly fee or hourly. 

To decide which option is best for you, consider your experience level, the type of work you’ll be doing, and your clients’ needs.

 

Focusing on Value Pricing

When you’re just starting out, it might be tempting to determine how much you want to earn per hour and back into your pricing from that point. Instead, you need to ask yourself how much value you provide for your client. If you can do the job more efficiently or insightfully, you’re likely adding more value for your client than your hourly wage goal.

Value pricing is a bookkeeping method that assesses the value of products or services based on their perceived worth to the customer rather than on their actual costs. This approach is useful for bookkeeping businesses wanting to focus on creating valuable products or services for their customers. 

In many cases, customers are willing to pay more for items they believe are valuable. Value pricing can help businesses generate higher profits. Additionally, by focusing on value rather than cost, businesses can avoid making decisions that would result in losing money. 

For example, if a firm decides to focus on value pricing, it may choose to sell its products at a higher price point than its competitors to make more profit. However, if the company instead chose to focus on cost, it might end up selling its products at a lower price point to save money. In general, value pricing is a more profitable method for businesses.

If you’re interested in learning more about value pricing, check out this episode of the Grow Your Firm Podcast with guest Ron Baker, considered the founding father of value pricing in accounting. Unpacking the concept of “Value Pricing 2.0,” Ron explained how subscription pricing is like pricing the relationship and the portfolio instead of pricing the customer in Value Pricing 1.0.:

 

Mistakes to Avoid When Pricing Your Services

One common mistake firms make as they’re thinking about pricing is failing to account for all of their costs. When calculating your prices, be sure to factor in the cost of software subscriptions for your clients and things like overhead, marketing, and employee salaries. Otherwise, you may barely break even – or worse, lose money on each engagement.

Another mistake is failing to consider the value of your time. Many firm owners underestimate how long it will take them to complete a project, which can lead to pricing that doesn’t adequately reflect the time and effort involved. If you’re unsure how long a project will take, it’s better to err on the side of caution and quote a higher price than you initially think is necessary. You can always negotiate down from there if necessary.

Finally, don’t be afraid to charge what you’re worth. Many business owners underprice their services in an effort to compete on price. This is often a mistake. If you don’t charge enough to cover your costs and leave a reasonable profit margin, you’ll quickly struggle to keep your business afloat. Remember, clients are often willing to pay more for quality – so don’t sell yourself short when setting your prices.

More on these concepts in this episode of the Growing Your Firm Podcast with guest Geraldine Carter, business strategist and coach to CPAs:

 

BONUS: Simplify Your Bookkeeping Workflows with This Free Resource

If you’re looking for simple workflow templates to stay on top of your projects and tasks for clients, access our collection of 32 customizable accounting workflow templates and checklists here. This free resource includes a ton of the most popular accounting templates including monthly bookkeeping, weekly accounting analysis, client onboarding procedures, and common tax return forms.

Invoice templates are a useful tool to help to streamline the billing process, making it faster and easier for you to get paid for your services. 

With so many different free invoice templates available online, how do you know which one is right for you and your business? This post will detail some of the key features to look for in a good invoice template and provide a link to the bookkeeping invoice template.

Free Bookkeeping Invoice Template

To get you started, Jetpack Workflow created a bookkeeping invoice template for you to use and adapt for your needs. You can insert more lines in the template if you need to add additional services.

You can also find this invoice template as a Google Sheet to download here.

BONUS: 32 Other Free Templates for Bookkeeping Firms

There’s no reason to start from scratch when you’re invoicing your bookkeeping clients. Jetpack Workflow knows there’s also no reason to start from scratch on many common tasks necessary to run your firm!

Jetpack Workflow created a set of 32 workflow templates to get you started. The templates are fully customizable for your workflows.

What to Include in Your Invoice Template

When you create an invoice template, you’ll need to include certain information to ensure it’s accurate and clear to your clients. Below are outlined the basics of what should be included.

Contact Information

Include your full name, business name, address, and contact information. This will help your clients identify who they need to pay and make it easy for them to get in touch if they have any questions about the invoice.

Recipient Information 

Include the full name, business name, and address of the recipient. This will help ensure the invoice is sent to the correct person or business. If your client has an accounts payable department, the invoice should be addressed to them.

Invoice Number

Each invoice should have a unique number. This helps you keep track of payments and helps your clients reference specific invoices if they have any questions. If your clients tend to have several outstanding invoices, ask them to put the invoice number on their payment memo line, so it’s clear which invoices are being paid.

Invoice Date

Include the date that the invoice was created. This will help you keep track of payments and ensure your invoices are paid promptly. You will also use this date to create invoice aging reports.

Payment Terms

Be sure to include your payment terms. This will let your clients know when they need to pay the invoice. Common payment terms include “Net 30” (payment is due 30 days from the invoice date) or “Due on Receipt” (payment is due when the invoice is received).

Services Provided

Include a detailed list of the bookkeeping services you provided. Be sure to include the date, location, and any other relevant information. If you are billing for any goods or subscriptions such as QuickBooks, those products should also be included as a line item on your invoice.

Price

Include the price of each service provided. Be sure to include any discounts or promotions that may apply. Any item with a different price should be included on a separate line.

Total Due

Include the total amount due, including any taxes or fees. Be sure to list the currency in which payment is to be made if you have international clients.

Payment Method

Include your preferred payment method (e.g., PayPal, bank transfer, credit card). This will make it easy for your client to pay you. If you accept online payments, you should include a link to the website where the payment can be made.

Miscellaneous Information

Any other relevant information, such as your tax identification number or a note about shipping costs. Including your tax ID on your invoice will make it easier for your clients to issue you a 1099 at the end of the year (although most bookkeepers will handle issuing 1099s).

When you’re ready to create your invoice template, be sure to use a program that supports customization allowing you to add or remove information as needed. This will help you create a professional-looking invoice that meets your specific business needs.

How Often Should You Invoice Your Clients?

Keeping track of your invoicing will help you stay organized and ensure you’re getting paid on time. How often should you invoice your clients?

There’s no hard and fast rule. Generally, the best option is to invoice each client after completing a project or deliverable. This could be weekly, monthly, or on some other schedule that makes sense for your business. If you invoice too frequently, your clients may feel overwhelmed; if you invoice too infrequently, they may forget about your invoices or have difficulty keeping track of them. Ultimately, finding the right balance for your business is up to you.

Invoicing is just one part of running a successful business. It’s also important to keep track of your expenses, manage your time effectively, and provide quality products or services to your clients. As long as you stay organized and keep up with your invoicing, you’ll be ahead of the game.

Need Help Managing Client Projects?

Invoicing your clients is just one of the many steps you need to take for every bookkeeping engagement. If you find that you have several clients and it’s becoming difficult to track, you should consider implementing a workflow management tool for your firm.

There are several options for workflow management, from paper-based to-do lists to full workflow management systems. Jetpack Workflow was built with bookkeepers and accountants in mind. 

The cloud-based workflow management system comes with predefined workflows for common bookkeeping tasks such as financial statement preparation and monthly accounting. By using a system designed for bookkeeping firms, you’ll be able to hit the ground running and ensure nothing is falling through the cracks.

Every engagement is unique for a bookkeeping firm. Clients have different expectations regarding phone support, response time, and how often their books are updated. That doesn’t mean you need to spend a lot of time figuring out the pricing for each new client.

Jetpack Workflow has created a free bookkeeping price template that will bill your clients accurately without starting from scratch on every bid. The template can be customized to your company’s pricing structure and is meant as a starting point for your bidding process.

Free Bookkeeping Pricing Template

Below you’ll find a free bookkeeping pricing template to assist you in streamlining your bidding process. You can access the Google Sheets version of the template here. 

Note that the cells highlighted in yellow should be updated with your firm’s pricing.

Bookkeeping Pricing Template

Payroll Processing
Service	Number	Price Per	Annual Total Cost
Base Rate	1	$100.00	$100.00
Number of Employees	26	$2.50	$65.00
Total Price Per Payroll			$165.00
Payroll Processing
Service	Number	Price Per	Annual Total Cost
Weekly Payroll Processing	52	X	$0.00
Biweekly Payroll Processing	26	$165.00	$4,290.00
Semi-Monthly	24	X	$0.00
Monthly	12	X	$0.00
Quarterly	4	X	$0.00
Annual Payroll Processing			$4,290.00
Monthly Bookkeeping Services
Service	Number	Price Per	Total Cost
Bank Account Reconciliation	2	$75.00	$150.00
Credit Card Reconciliation	2	$75.00	$150.00
Journal Entries	5	$15.00	$75.00
Financial Statement Preparation	1	$150.00	$150.00
Monthly Phone Support (Hours)	5	$100.00	$500.00
			$0.00
Total Monthly Charge			$1,025.00
Quarterly Bookkeeping Services
Service	Number	Price Per	Total Cost
Sales tax Return	1	$250.00	$250.00
Payroll Tax Return	1	$300.00	$300.00
Total Quarterly Charge			$550.00
Annual Bookkeeping Services
Service	Number	Price Per	Total Cost
Coordination with CPA on Tax Prep	1	$500.00	$500.00
Workers Compensation Audit	1	$350.00	$350.00
Total Annual Charge			$850.00
Total Annual Charge			$19,640.00
Monthly Flat Fee			$1,636.67
Discount			0%
Adjusted Total Annual Charge			$19,640.00
Adjusted Monthly Flat Fee			$1,636.67

BONUS: 32 Other Free Templates for Bookkeeping Firms

There’s no reason for you to start from scratch on your bookkeeping pricing proposal template. Jetpack Workflow believes that applies to all of your recurring tasks. 

Jetpack Workflow has created a free set of 32 accounting and bookkeeping workflow templates to help you standardize your workflows and ensure nothing falls through the cracks. The free templates include many projects for bookkeepers and accountants, including monthly bookkeeping, audits, financial statement preparation, tax engagements, and more that will help you spend less time on recurring tasks. 

What to Include in Your Pricing Quote to Win New Clients

When you’re putting together a pricing quote for a potential new client, there are a few key things to keep in mind. You want to make sure you’re attracting new clients. And you also want to ensure you’re being compensated for all of your efforts.

Note that this pricing template is intended for you to determine the pricing for your services and is not necessarily meant to be delivered to your clients as an outline of all potential costs. Any bookkeeping engagement should be outlined in a full proposal, and you should have a signed engagement letter in hand prior to starting any work for a new client.

You should also be willing to update your rates over time. While you may offer your services at a lower rate when you’re just starting out, your rates should increase as your calendar fills up.

When creating your pricing quote for clients, be sure to include all of the relevant costs associated with the project. It can be hard to price new projects, which is why you will find many of the standard bookkeeping tasks included in the template.

There is also a line item for an additional charge for phone consultation and coordination with CPAs for tax prep. Each of these activities can take a significant portion of your time. You want to make sure you’ve included all potential costs so you do not need to go back to your client later for additional charges or lose money on the engagement.

Next, give some thought to what kind of discount, if any, you’re willing to offer. Keep in mind that your goal is to win the business. You don’t want to low-ball your quote too much. At the same time, you don’t want to price yourself out of the market. 

Once you’ve determined a total price for all the add-on services, you may opt to include a discount for bundling multiple services or multiple companies. In the end, it’s up to you whether you want to offer a discount.

Finally, you need to decide how you want to bill the client. You can bill incrementally by creating invoices each month for the services rendered during the prior month. You can also calculate the average monthly cost for the year and bill your clients a flat fee each month (which is calculated in the template). The right type of billing will depend on whether you want to closely track your own time and your clients’ expectations.

Need Help Managing New Client Projects?

A workflow management system is a great way to keep your bookkeeping firm organized and running efficiently. By automating tasks and keeping track of deadlines, you can be sure that nothing falls through the cracks and your clients are always getting the best possible service. 

In addition, a workflow management system can help you to allocate resources more effectively, ensuring your staff is always working on the most important tasks. Ultimately, a workflow management system can save you time and money, making it an essential tool for any bookkeeping firm.

Jetpack Workflow was designed from the ground up with bookkeepers and accountants in mind. The cloud-based workflow management system allows you to start with predefined templates, customize them for your firm, and track progress on all your work.

Jetpack Workflow offers a free 14-day trial which will give you the opportunity to see how much time you could be saving with a full workflow management system.