I recently ran a survey asking 2683 accounting professionals what they charge for their bookkeeping services.
The participants predominantly consisted of accountants both qualified and unqualified, and bookkeepers both certified and non-credentialed.
I wanted to know how they were pricing their bookkeeping services, but also how much they were charging.
One of the questions I asked in the survey was…
“Do you review your prices for every client at least every single year?”
The answer to that should be overwhelmingly YES. We absolutely should be increasing our prices every single year, for 3 key reasons…
Prices change every year, they always go up because of inflation. Your prices should increase every year as well - your clients expect this.
You should also be reviewing your prices because your clients’ circumstances are likely to change. If you’ve been helping them, their business is surely...
A few months back I discovered something that astonished me…
Accounting firms in the US are better at pricing bookkeeping services than those from other countries like Canada, the UK, and in fact the rest of the world.
In my recent study, with 2683 participants, I wanted to find out how accounting professionals are coming up with their prices for bookkeeping services, and exactly how much they are charging.
A mixture of qualified and unqualified accountants and bookkeepers took part in the survey from all over the world.
We analysed the data and then broke it down into different countries to see if the location of a firm had an impact on the way they price. I wanted to know if there was any significant difference in the prices that firms from the US got as opposed to firms from Canada and the UK.
The survey was largely based around 12 different bookkeeping client scenarios. We asked participants to recommend a price...
I got an email recently that completely blew my mind.
When I saw it, I couldn’t believe what Carla was telling me…
I was absolutely astounded by this result. Not only had Carla got an incredible 6-figure fee, but she had done it only one month after discovering value pricing, on her first attempting, in just 2 hours with the client!
I had to reach out to Carla to find out exactly how she achieved this amazing result. She agreed to an interview. It’s 29 minutes of pure gold! I suggest you watch it now.
Meet Carla Davidson
Carla started her bookkeeping practice small, by herself, from her house.
She struggled with the amount of work, and couldn’t make a decent profit because she was still using hourly billing.
She wanted to be able to help her smaller clients so started hiring people to help, but things didn’t improve right away.
Hourly Billing Became A Big Issue
Carla found that, because she was using hourly billing, all her clients were asking for a...
I recently broke my arm in a cycling accident.
I was in a sling for a few months and I was using the NHS’s physiotherapist to try and get some movement back. Eventually, I decided to speed the process up by using a private sports physiotherapist.
I was recommended to a guy named Mark, so I booked a session for an hour.
At no point did Mark inform me of what the price was. I had a vague idea because my friend had recommended his services to me, but Mark hadn’t actually told me anything.
It wasn’t until I sat down in Mark’s office that I noticed a sign on the wall that said:
“Please note my charge is £30 per session.”
At the bottom of the page was a date. The date was 5 and a half years ago.
I thought this was absolutely crazy. This physiotherapist had not changed his hourly rate for 5 and a half years!
Seeing this sign was the first time I had any idea of the price. I could have had one of two thoughts. Either…
Last week I shared the top 3 things I would change if I could start by business again.
But I have so many more tips to share, I thought I would write another blog with 4 more things to avoid when starting up your own practice…
1 - Content Marketing
One of the most powerful ways to grow your firm and your brand is through content marketing.
Creating and sharing content is essential to showing your potential customers your ability and value.
This could involve writing a blog (like the one you’re reading now), or filming some videos. You may even write an ebook.
It’s so easy to distribute your content nowadays with social media. When you share lots of valuable content, you are increasing people’s awareness of you, and they will start to see you as the expert.
When you are seen as the expert, people will want to work with you.
2 - Lead Generation
I never used to have any kind of database of leads, or any kind of system for...
Accountants and Bookkeepers are always asking me:
“What should I be charging as an hourly rate for bookkeeping?”
I get asked this particularly from bookkeepers who are starting their business journey.
So I decided to find out, definitively what the profession is charging.
I recently created the world’s largest ever study, with 2683 participants, into what people are charging for their bookkeeping services.
980 Qualified and 416 Unqualified Accountants, 468 Certified Bookkeepers and 591 Non-Credentialed Bookkeepers all took part, as well as 208 ‘others’ such as Enrolled Agents. Mainly accountants and bookkeepers.
One of the questions I asked in the survey was:
“If you price based on an hourly rate, what is that hourly rate?”
This graph shows the findings…
Let me just explain how we achieved these numbers.
What we did was we organised all of the 2683 participants responses in ascending order....
I started my accounting firm way back in May 1996. I started from scratch and built up my business as a sole practitioner.
I made so many mistakes!
I often get asked advice from people who are starting up their businesses, so I thought I would share with you the first 3 things I would have done differently if I were to start it all again…
1 - Hire The Right People
I went from 0 clients to 200 in 3 years and had a team of 13 people. I was growing crazily fast.
But I wasn’t growing profitably.
One of the biggest mistakes I made was hiring the wrong people.
I didn’t have a huge amount of money, so I tried to cut every possible corner I could, hiring college students and school leavers, rather than qualified accountants, to avoid the fees of recruitment agencies.
The problem with employing people who aren’t the best is the work is not as good, and you have to micro-manage them. I spent so much of my time in my early years...
I’m sure this will have happened to you at some point: a client agrees to do something, give you information in a certain format by a certain time, and they just don’t deliver.
You then have to work longer and harder to fix the problem, so should you charge the client for it?
Here are 7 things you ought to consider before you do…
1 - How Clear Were You?
At the outset, how clear were you in your price agreement about the criteria the client had to meet? Is it crystal clear what the client has promised to do? Is it in writing?
If you weren’t clear enough, or you don’t have the conditions in writing, it becomes much more difficult to put the price up. You will get pushback, or you may even lose the client.
Make sure you are always very clear on what the client needs to do, the scope of the work and who is responsible - and get it in writing.
2 - Consequences
Were you also clear on what the consequences would be if the...
Before we can look at how to make the move to advisory, we need to first ask two other questions…
‘What is advisory service, and why do we need it?’
In our modern world, with the rise of cloud technology and artificial intelligence, we are seeing compliance work become more and more automated.
Compliance work can be done at the touch of a button, so we need to start changing our services away from simply adding up numbers and towards interpreting numbers. We need to move to advisory services.
However, everyone has different definitions of what advisory services include. For example, it could involve tax planning, technology and app advice, business advice, management reporting or consulting work.
In this blog, I’m going to refer to advisory as business advisory, meaning adding value through management reports and meeting periodically to give business advice.
I’ve come up with 7 steps that you will need to take to make the...
I want to share with you 7 practical tips for how you might price bookkeeping services…
If you prefer you can watch the video here.
Tip 1 - Don’t Move Straight to Value Pricing
This is a big mistake I see often.
If you try to move from hourly billing to value pricing in one quick jump you are going to fail without a doubt.
Value pricing is a difficult concept to grasp in the first place. Trying to apply it to a complex compliance service like bookkeeping is going to make it even harder.
The move to value pricing is going to be a journey, not a quick fix, so be patient.
Tip 2 - Remember It Is Valuable
You need to recognise that bookkeeping is valuable.
The perception is often that it is a low value service, it’s just data entry. But bookkeeping can be so much more complex than that.
I know that my bookkeeper is quite expensive, but I don’t mind paying that price because I know I am getting great service. It gives me peace of mind knowing that the...