How Much Should You Charge for Bookkeeping Services?

The global bookkeeping services market is expected to grow at a compound annual growth rate (CAGR) of 9.8% from 2024 to 2030.

Whether you’re an independent freelance bookkeeper or part of a larger firm, one key factor will determine your ability to capitalize on this growth: your rates.

Setting appropriate rates for your bookkeeping services is crucial for ensuring your business thrives. Charge too little and you’ll struggle to make ends meet, no matter how many clients you take on. But charge too much and you risk pricing yourself out of the market.

So how do you determine the right rates to charge for your bookkeeping skills and time? There’s no one-size-fits-all answer, as appropriate rates depend on several factors:

• Your experience level
• Local market rates
• Types of clients you serve
• Services offered
• Your efficiency
• Pricing model used

In this article, we’ll dive into each of these factors that should guide your bookkeeping rate decisions. We’ll also provide some example rate ranges as a framework. By considering all the relevant variables, you can set competitive yet profitable pricing to maximize your bookkeeping business’s success.

Factor 1: Your Experience Level

One of the biggest factors that impact how much you can charge for bookkeeping services is your level of experience and credentials. As a general rule, the more experience you have under your belt, the higher rates you can command.

An experienced bookkeeper with years of practical experience across different industries and accounting systems has much more to offer clients than someone just starting out. Experienced bookkeepers can work with less oversight, handle more complex books, provide value-added services like financial analysis, and simply get the job done faster and more efficiently.

Those with advanced certifications like becoming a Certified Bookkeeper (CB) or Certified Public Bookkeeper (CPB) can also justify higher rates than non-credentialed bookkeepers. These certifications require extensive testing and coursework, demonstrating an elevated level of expertise.

However, it’s important not to undervalue yourself even if you’re new to bookkeeping. You’ve still gained valuable skills through education and training that allow you to provide a critical service for businesses. Keep in mind that clients may expect to pay lower entry-level rates while you build up experience.

Example rate ranges:

• Junior bookkeeper (0-3 years experience): $18 – $25 per hour
• Experienced bookkeeper (3-7 years): $25 – $40 per hour
• Senior bookkeeper (7+ years experience): $35 – $60+ per hour

As you gain more experience and credentials over time, steadily raise your rates to reflect your increased value to clients. Just be sure to remain competitive with other bookkeepers offering similar experience levels in your local market.

Factor 2: Local Market

While your experience and skill level set a baseline for your rates, it’s crucial to research what other bookkeepers in your local market are charging. After all, clients have a certain expectation and budget based on the going rates for bookkeeping services in their area.

Charge significantly more than your competitors, and you risk pricing yourself out of the market. Undercut the market too drastically, and clients may question your qualifications or assume you cut corners.

To set appropriate and competitive rates, make an effort to understand the local market landscape. Here are some tips for researching rates:

• Check listings on general freelancing sites (Upwork, Fiverr) and niche bookkeeping job boards filtering for your city and service offerings.
• Discreetly reach out to other local bookkeepers, explaining you’re conducting market research. Many may be willing to share typical rate ranges.
• Join local professional organizations and attend meetings to network and discuss rates with peers.
• Look at pricing on bookkeepers’ websites and marketing materials, keeping in mind published rates may be slightly high.
• For employment, research salary ranges for bookkeeping roles with local companies on job boards and sites like Glassdoor.

Aim to set rates around the mid-to-high range of your local market rates to remain competitive while not undervaluing yourself.

Factor 3: Type of Client

The type of clients you work with should also factor into your bookkeeping rate decisions. There can be significant differences between serving small businesses versus larger corporate clients in terms of budgets, complexity of work, and demands on your time.

Small Businesses

Many bookkeepers start by targeting small businesses like startups, entrepreneurs, independent contractors, etc. These clients typically have relatively simple books, fewer transactions, and limited resource requirements.

The upside is that small business clients tend to have more modest budgets, so you’ll need to keep your rates affordable, perhaps in the $25-40/hour range. However, the work also tends to be more straightforward.

Corporations/Large Businesses

As you gain experience, you may market your services to larger corporate clients. These businesses have bigger budgets, allowing you to charge higher premium rates of $50/hour or more.

The trade-off is that corporate books are usually more complex with factors like payroll, inventory, taxation, etc. You’ll need strong accounting skills and efficient processes to handle the higher transaction volumes and stringent demands. Corporations also tend to be more particular about credentials and experience.

Other Considerations

Beyond small vs. large, your rates can also depend on the specific industry you serve. For example, bookkeepers for law firms, medical practices, and other highly regulated sectors may charge more due to the compliance complexities involved.

The location of your clients matters too. You may be able to charge more for remote work with city-based clients versus local small businesses.

Factor 4: Services Offered

The scope of bookkeeping services you provide to clients is another key factor that impacts your rate structure. The more comprehensive and advanced your service offerings, the more you can justifiably charge.

Basic Bookkeeping Services
For bookkeepers offering just core accounting basics like data entry, bank reconciliations, accounts payable/receivable, etc., you’ll likely need to keep rates on the lower end, perhaps $25-40/hour or $300-600/month for a simple small business retainer.

While essential, these fundamental bookkeeping tasks don’t require specialized skills. There’s also an abundance of bookkeepers providing these basic services.

Advanced Bookkeeping Services
As you expand into more advanced service offerings, you can command higher premium rates due to your enhanced skill set and the value provided. Examples of advanced services that allow for higher rates include:

– Payroll processing and compliance
– Financial reporting and analysis
– Inventory management
– Tax preparation and planning
– Advisory and virtual CFO services
– Expertise with specific accounting software
– Certifications (e.g. QuickBooks ProAdvisor)

For instance, a certified bookkeeper providing payroll, tax, financial analysis, and advisory services for clients could reasonably charge $60-100+/hour or $800-2000+/month retainers.

The more comprehensive solution you provide as an accounting professional, the more your rates can increase accordingly. Just be sure your skills are truly advanced – clients will have higher expectations at premium rates.

Factor 5: Pricing Models

Once you’ve considered all the factors like experience, local rates, client types, and services offered, the final piece is determining the actual pricing structure for your bookkeeping services. The most common pricing models include:

Hourly Rates
Pros: Simple, easy to track time, avoids scope creep
Cons: Unpredictable monthly income, incentivizes inefficiency
Example Rates: $30-60/hr for freelance bookkeepers, $60-100+/hr for firms

Project/Flat Rates
Pros: Predictable fixed pricing for clients
Cons: Harder to estimate workload, risk of underpricing
Example Rates: $500-2000+ for clean up, $250-500/mo for small business

Monthly Retainers
Pros: Steady recurring revenue, affordable for clients
Cons: Capping revenue potential, dealing with scope limits
Example Rates: $300-800/mo for basic services, $800-2000+/mo for advanced

Per-Transaction Pricing
Pros: Scales with client’s workload and business growth
Cons: Detailed tracking, potential incentive misalignment
Example Rates: $2-5 per transaction, $20+ per payroll run

Many bookkeepers use a hybrid approach combining different models. For example:

• Hourly rates for one-off projects and overflow work
• Monthly retainers covering standard recurring services
• Per-transaction pricing for payroll, invoicing, etc.
• Upfront clean up fees
• Charging premiums for specialty services

Using a blended pricing strategy ensures you earn a steady income from retainers while capturing additional revenue for ad-hoc work, all aligned with the scope you deliver to each client.

The right pricing model – or a hybrid of models – keeps things profitable for your business while also providing transparency and value for money to your bookkeeping clients.

Conclusion

There’s no universal fee structure for bookkeeping services. The appropriate rates depend on multiple factors like your experience level, certifications, local market rates, types of clients served, service offerings, pricing models used, and overall efficiency.

However, by carefully evaluating each of these variables, you can set profitable yet competitive rates that attract clients while ensuring your bookkeeping business earns the revenue it deserves.

Don’t undervalue the critical financial management skills and services you provide. But also ensure your rates stay aligned with the market realities and what clients are willing to pay for your specific mix of expertise and offerings.

Make informed, strategic pricing decisions, and continuously revisit your rates as your business evolves. With the proper rate structure in place, you’ll be positioned for long-term bookkeeping success.

• Facebook
• Twitter
• LinkedIn
• Pinterest
• Mail