Episode #022 Cost of Hiring a Bookkeeper in Australia
Understand the cost of hiring a bookkeeper is important for your business
Amy uncovers the true cost of hiring a bookkeeper for Australian businesses, and addresses misconceptions about bookkeeping charge-out-rates. Online competition and conflicting information makes it hard for both business owners and bookkeepers when it comes to price.
The real message of this story is: “Knowledge is key, and small business owners need to be informed in order for our industry to continue to thrive and grow!”
Host: Amy Hooke
Guest speaker: None
Topic: Cost of Hiring a Bookkeeper in Australia
Good morning everybody. Thank you so much for coming back again to join me for another episode. I have a very exciting topic to talk about today, which I'm going to give your warning straight up that this podcast is possibly or probably going to push some people's buttons. The reason that I've decided to make this episode, is because of something that I saw regarding bookkeeping charge out rates. That's what we're going to talk about today.
We're going to talk about the cost of bookkeeping services, and I really want to emphasize to talk about something that I'm very passionate about, which is actually the cost of rescue jobs on Australian business owners, the financial and the emotional cost of that. Also, I want to talk about what I see as an impact that's happening on the charge out rates of bookkeepers, and the discrepancies that there are between charge out rates and quality of work, and how I believe that when business owners are trying to hire a bookkeeper, it is very hard for them to get the right information that they need to make the best decisions for their business.
Of course, business owners don't really fully understand what's involved in the different levels available in a bookkeeping service. It's very easy for a business owner to be comparing apples and oranges when they're looking at charge out rates and trying to make the best decision for their business. Now, the reason that this whole thing has started was that I was looking online, I was actually doing some research. On Saturday mornings, I do research online about our industry to write blog posts in order to improve my SEO, because SEO is one of my main ways of generating business for my bookkeeping company, and also for my other company, the Savvy Bookkeeper.
Every morning on a Saturday, I like to have a little bit of a look around and get some inspiration for something to write about. What I do is I look at the keywords that I'm targeting, and I've got a whole list of keywords that I'd like to get a higher rank for. I go through that list, and I look for topics that would be of interest to the business owner that can help me rank on Google. I was looking around, I've been putting pages and information on my website about the cost of a bookkeeping service and what businesses can expect to pay and how we do our billing, and I thought I'd like to give my rankings a little bit more of a boost by writing something else about bookkeeper charge out rates.
I started to do a little bit of research, and I found a website which had an interesting blog posts, and an infographic, which I then went and posted in the Bookkeepers' Support Group, which is a group on Facebook where bookkeepers can go and get help with their bookkeeping questions.
When I posted it in the group, I did actually keep the name of the company that had posted these blog posts anonymously, because obviously, in the context of that group, we don't want to be going in there and bad mouthing businesses or people that charge different rates and things like that. But because of the fact that … Okay, so firstly, this is my podcast. I own the podcast. I run the podcast. I created the podcast, and basically, I can say whatever I want on the podcast.
Whereas, in the group, I wanted to keep the name of that company confidential, because obviously, it's a different context. I'm going to let you know straight up. The name of the company that I'm referring to is ServiceSeeking. Serviceseeking.com.au, they are an Australian company, an online business directory where people can go to hire various services, whether for their business or for homeowners. Renters, small business owners and agents and builders can go and get jobs done.
I guess in a way it's sort of probably similar to Airtasker in a way, although I think it's just more of a quoting service as opposed to a place where you hire them. What you do is, you can go in and list. it's a place where businesses list their services. You can list your services, and you can put in an advertisement about the type of service that you offer, and then people come in and request services. It's very heavily used. They say their most requested services are electricians, builders and plumbers. This is really heavily a trading site. It is really targeted towards tradies, as you can see, there's branding. There's a lot of information even on the homepage about tradies.
Of course, as bookkeepers … Firstly, we already know that tradies are notorious as bookkeeping clients to be price sensitive. Not all tradies are, obviously you've got people in the construction industry. I guess once a person reaches a certain level, maybe they're not as concerned anymore. Whereas, maybe we do a sole trader type tradie businesses. They tend to be very price sensitive. I think the reason that they're so price sensitive is because it's a culture. It's a culture in that industry where there is a certain view taken of how things are done. For example, if you're a tradie and you want a service Then you would go out and you get three quotes, and you'll find the quote that you felt that was the best.
I think for a lot of people, that's going to be whichever is the cheapest. Tradies are in that space where they're used to, for example, a plumber gets called by a house owner, or renter who's got a blocked toilet or something like that, and they asked for a quote from three tradies enough costs. Those people are going to be price conscious as well, and they're probably going to go for the cheaper services. There'd be a lot of pressure on tradies to feel that they need to offer the cheapest service. It is an industry where price competition is a big deal. That's one thing to consider. Obviously, when tradies look at their bookkeeper, they would be very likely to do that in the same way.
You can Google and look around all sorts of different tradie websites that talk about bookkeeping, and you will see on these websites that it is a very price conscious market. The article that I stumbled across, the title is “The cost of hiring a bookkeeper”, and I actually stumbled across it, because I typed into Google “cost of bookkeeper”. I think they call it a snippet. You scroll past your four ads, and then you get this window. Before the blog post gets posted, you get this little info window that pops up and it says in there, “Cost of hiring a bookkeeper. On average, hiring a bookkeeper will cost you around $40 an hour. However, bookkeeping rates may still vary depending on the type of work involved. Basic bookkeeping starts at approximately $33 an hour, but depending on the complexity of the job prices can go as high as $50 per hour.” Obviously, that sparked my interest, because I thought, “Okay, in our industry, there's a few professional bodies, and they do annual surveys, and they've determined that the average rate of a bookkeeper is $65 an hour. I'm like, “okay, how come our industry survey shows $65 an hour? Whereas, this company saying average $40 an hour, and I know bookkeepers that charge $80 or $90 an hour. Whereas, this one's saying that the high end bookkeeping's $50 per hour and basic bookkeeping, you're looking at $33. Personally, when I started charging, setting up bookkeeping business, I started charging $100 an hour, because a bookkeeper that I used to work alongside said that I should. I didn't really put any thought into it.
And then when I told people that was my charge out rate, they didn't ask questions. They were like, “Okay, that's cool.” And they were happy to pay that. That was funny, and then I decided, as I Started to engage bigger clients. I thought, “Well, if someone's hiring me for a whole day a week, I'm not going to charge them $100 an hour.” I charged those people between $75 and $80. But when I'd do a rescue job, I'd charge $100 an hour, because when you do a rescue job, it hurts your brain. I enjoy rescue jobs because you get to really do a lot of problem solving and that kind of thing. A lot of bookkeepers will say to me, “I really loved doing a rescue job. You get your teeth into it”.
The thing is, you're drawing on that full depth of your knowledge and all of your brainpower to work out these problems that have been caused by whoever was previously doing the bookkeeper. It might've been the business owner, or another bookkeeper, an offshore bookkeeper, their accountant, or their wife. It doesn't matter really who was doing it. The thing is, when the rescue job comes in, for a bookkeeper, that's great, because you get a nice big whack of income, and you can charge more for a rescue job. In a way, usually the clients are so desperate at that point to get their stuff up to date and maybe the ATO's talking court or something like that.
They really want to get out of that situation. Often people when they come along in that state, they'll say, for example, one of the biggest rescue jobs I had, a guy being quoted quoted $15,000 by his accountant to get him up to date. He was desperate and I was like, “Oh, my gosh, I don't charge that much.” And I said, “Look, I can't give you an exact figure, but it won't cost you that much. I charge an hourly rate in 10 hour blocks upfront.” And that's the way that we did it. And it ended up costing him $12,000, and he was so grateful and obviously worth the lesson, because he knew that he never wanted to go through that painful experience again of having to try and catch up.
Obviously, that was great for me. It's nice to get paid $12,000 in six weeks. That's cool, but at the same time, to me, I was really moved by the humility of this client; he knew that he'd done the wrong thing, and I knew I could help him. Even just talking about it now really stirs up those emotions of how I feel about small business owners. Now, not every small business owner that I've worked with has been grateful. I've had plenty of people that I've got out of rescue jobs, and they have not been grateful at all. They've questioned the bill. They've been angry with me, they've been frustrated, some of them even said they didn't want to work with me anymore, and gone off and not paid their bill, because of Being confronted by their own mistake or the mistake of whoever had been doing their bookkeeping before.
I have had clients be, not just rude or not paying their bill, but I have had clients being abusive. I've had clients threaten me. I had one client say to me, “I'm going to take everything that you have.” And I thought, “What?” Okay. I don't even own a TV. If you want to come around and take anything, come over now, whatever.” I just thought like, “What a weirdo?” But at the same time, he was so upset. And you know what? His bill was Only $800, he came to me for a Xero set up and it turned up he'd been paying, his wages incorrectly, and so, I had to calculate the discrepancy. Then when I told him that he'd made an error and he was going to have to amend it with the ATO and with the employees, he didn't want to look at it.
He didn't want to deal with the fact that he'd made a mistake and that had to make a change. I didn't know what to do, but I just presented him. I said, “Well look, it's my job to just present them with the information, and it's up to you what you do with that information.” Now, obviously, it's up to me whether I then decide to work with him after he decides not to go ahead, which is the decision that I had made. But in the meantime, he decided to do a run or not pay his bill and it was $800, and I never got that money back. I was looking for a debt collector and he just to the debt collector, “I don't have any money, and I'm moving overseas.” And he just disappeared for a little while, and I'll just thought, “I'll just leave it. It's only &800. Who really cares? It's not worth the emotional stress for me.”
I just have to learn my lesson and I need to actually learn and understand that point before I onboard them, and I need to make sure that I have a solid engagement letter, which I did not have at the time. I really had nothing to go off except for our email exchanges, which was really disappointing. AT the same time, and I know … well, I don't know why I do this, but at the same time I saw this client who was incredibly rude and mean to me and threatening towards me. But at the same time, I don't know. I still have a level of compassion for people who are in that situation, because I know what it's like to be a business owner, and I know what it's like to hire a bookkeeper.
After this post went off in the bookkeeper's support group this morning, I really was thinking about it, and I was chatting to our client relationship manager on Slack, and just having a little back and forth with her, because when I posted in the group, so many people misunderstood what I was writing about. What I might do, I might just read the posts out to you, and then the amendment that I made to the post afterwards. This is what I said. Okay. I said, “I've heard the past few years that the industry average charge outright for a bookkeeper is $65 an hour.” And then in brackets I said, that's according for a couple of reputable organizations, in our industry. But according to this business-to-business directory company, who I won't name, they have surveyed their clients and bookkeepers in 2018 and 2019 and these other reported rates. I'm confused. Are the stats by this company correct or are the industry stats correct? Or is it just that these directories tend to attract price, tend to be biased.
“We used to charge 80 to a hundred dollars an hour for our services, but when we were on the hourly billing, but now everyone is on a monthly package. Obviously you don't have to share your rights, but are these rights legit? And if not, I might actually contact them as I think that's pretty unrealistic expectation for the business owners.” Then I added an update because someone came along and said “There's no context to this post.” And I said, “Well actually, there was context. I said that it was a business directory.” I said update to the post, this is a website where bookkeepers advertise their services and businesses, business owners can search. These are contractors, not employees.
This is a very well known business directory company. The article, which was updated on the on January, 2009 states, “Where do these prices come from? All prices stated in this article are based on financial year 2018 pricing data compiled by their business name.” The figures resulted from a comprehensive analysis of quote submitted by bookkeepers from the site between tooth job July, 2017 and July, 2018.” And then I commented at the end they spell bookkeepers wrong, so that was funny. They spell bookkeepers B-O-O-K-E-E-P-E-R-S. So there you go. We're missing a K.
Just on a funny note, when I first started my bookkeeping business, I created my invoice template plates in Xero and I'd accidentally spelled bookkeeping with three zeros. I mean, not three zeros, with three Ks. So it was like book, triple K, services and oh my gosh. Anyway, that was quite embarrassing and I'll realize that I spelled bookkeeping wrong in my own business.
Also the fact that it said, KKK in the middle, I thought that was a little bit weird as well. Anyway, that was just thing that I remember. Anyway, so I posted this on there and then a few people, now that we're in the reverse, I'm not in the group now I'm on my podcast, but just to give some to the people that like completely took what I wrote out of context. A couple of people came along and that was saying, “Without context, this article has no merit, no indication of employee versus contractor or bookkeeper versus BASS agent.” The metrics released by the professional associations have far more credibility. And I'm like, “Well, yeah. That's the whole point of what I'm saying.” There was a few other comments on there.
A few people coming along going, “As that person said, “This has no merit without context.” And I'm like, “Yeah, that's the whole point of my post.” The whole point of this was saying like, “Okay, there's a discrepancy between our industry and between what this post is. Their post may be accurately reporting the numbers that are in their database. But it could be because as I mentioned at the start, we've got this price sensitive industry. You've got tradies who advertise on serviceseeeking.com.au, and then they come along, and they go, “Well, I used that service to get my business through, so I might as well just hire a bookkeeper through there. They're not really going to get exposed to anything else. That was question that I was really asking … because all on the flip side, you've got people who join, for example, like the ICB, the Institute of Certified Bookkeepers. They are one of the organizations that does a very comprehensive survey that's extremely helpful for bookkeepers.
So they're saying that they've surveyed around 800 people. I think the ICB probably has, I don't know if they have 5,000 members. Anyway, they have a lot of members, but obviously not all the members participate in the survey, and I'm also not sure if the people who fill out the survey are non-members as well, or if it's only members. I don't know, but maybe it's the case that, for example, if you're going to pay $500 a year for an ICB membership, there's actually a good chance that you're already doing okay. Maybe the ICB attracts more bookkeepers at the higher end of the scale. And then, we've got this whole population of what people's … maybe they don't know. Maybe they don't feel the need to be a part of an organization.
That's the question that I'm asking there, I guess. I'm not saying that the ICB is wrong. I'm not saying that ServiceSeeking is wrong. What I'm saying is there is a discrepancy, and why is that discrepancy, and how is that discrepancy helpful for business owners who are trying to seek services? How is that helpful for bookkeepers who are trying to price their services? Because the information that's out there is actually very conflicting. Obviously, this topic got quite heated, so I'm just scrolling down the post now. Let's say we've already got 68 comments on the post, and probably most of them are, as I went through, I think I got to one lady, who I could see had actually read my post.
There was one lady and she said, “It does concern me when I see figures like this as, it is a constant battle to prove to clients that you are bringing value to their business. I have seen these advertised previously and posted here about one in my area. It concerns me that there is a constant undercutting which makes it hard to compete. And yes, I hear a lot of don't compete, but in this industry you can't afford not to look at what's in your area and what others are charging/offering for the cost. I was still charging the rate that I'm charging, but I have to prepare the argument of why my service is better. Sometimes I just get tired of trying to justify.” I was actually really grateful, because I said this lady, “I think you're the only person on this thread who actually got my point, and thank you for actually reading what I said and responding from a perspective that considers the real struggle that is involved in making sure that business owners are educated about services, quality and value.”
Then someone else came along and said, “Yes, I agree, too. Business owners can see these, and then they call our rates overpriced.” Then someone else replies to that same thread. “I understood exactly where you're coming from. With these business owners, we'll see this and question why do we charge more? And then we have to explain why. But I've been fortunate that none of my clients have ever a questioned my rate as I have made them compliance, save them money in retrospect and always advocated professionally. That is the value that low rate bookkeepers couldn't afford in themselves to provide. And I'm more than happy to pay a professional right if they provide the required professional service. I've never questioned my mechanic on his rights. I never questioned my hairdresser. If they provide exceptional services, then they're worth every cent.” That was cool. There were are a couple of people there who got where I was coming from.
Then I had the people who didn't understand where I was coming from. One person said, “I'm not convinced that we should be stressed about all the advertise competition. If a business owner wants to pay that rate, they get whatever service they get. Well, that's their choice.” I think we all need to concentrate on our own growth, and confident. Who cares what they do? We're all offering different options to our clients, anyway.”
In the answer to who cares what they do, I care what they do, because the choices that these owners make, it affects small business owners across our country, and it also affects our nation as a whole. Small businesses account for a huge amount of employment, and a huge amount of our gross domestic product. Small businesses are vital to our country. When small business owners aren't having a good quality bookkeeping service, it can actually really affect their business, and it can affect the financial stability of their business, it can affect their ability to make the right decisions for their business and to know the financial position of where they're at.
One of the comments was, “Yes, the other person says he's still has no merit.” And I said, “Well, no merit for who?” And this person said, “You are saying that these are contractor rates. What evidence is there of this?” And so I said, “Who was surveyed, how many were surveyed, what were the survey questions? And what was the rationale behind the statistical evaluation? Anyone can publish a pretty infographic and make it show what they want to show #fake news.” And then I said to this person, That's my whole point. The reason I posted this in the group was to clarify if this is anywhere near accurate for any bookkeepers, because I'm going to contact the company and ask them to be more specific about these stats, because this is completely unfair to business owners setting unrealistic expectations.
Then someone else said, “In my opinion, these rights are not realistic. And if business owners are expecting these rates, they will be solely disappointed.” That is my whole point. And then one of the same ladies said, “Oh, well I wouldn't even bother measuring my rates against them.” And I said, “Well, you completely missed my point.” And she said, “Not at all. This is an attempt to hold this article up as having credibility or concern in the industry. It has none. I said, “Well, business owners reading it don't know that. and it sets very unrealistic expectations to businesses. Do you think it's fair? “
Then one of the other ladies who had been commenting said, “You could apply this analogy to any industry in the world, buyer beware. They need to ask the right questions.” I guess what's coming across in these messages is, well, they're small businesses. That's their problem. Further down this thread, they said, “Well, there's plenty of information where business owners can get information about bookkeeping, right? I think that's true. Well, I think that's it actually completely answered.
They went on to say, “I don't think the point's been missed at all. The heaps of places businesses can get guidance about bookkeeping rights doesn't mean they're correct or that businesses take credence in them. If a business wants cheap rates, that's their prerogative. If they find them and get quality, then good luck to them. Taking advice from a website that is an advertising platform on bookkeeping rights? It's like using Gumtree to compare the price of a plumber. No credibility in any business worth their salt would review data with skepticism.”
I'll just be honest, when I read this, I completely disagree with this. I don't agree in the attitude that says, “Well, there's information out there. If they pick the information, they get the wrong one, then that's their fault. They're the idiots that have not done their due diligence.” The reason I think this is wrong is because, it doesn't take into account the amount of pressure that small businesses are under.
We all know if you're a small business owner, you will know the pressures of running a small business. And I think part of the problem is, I've asked so many bookkeepers, I don't know. I'm going to make an assumption here, but I'm going to assume, the three main ladies on the post who really going against what I was saying or misinterpreting what I was saying, and like, not really having a go, but really coming in with a bit of a high and mighty sort of attitude.
I don't know for sure if those women do their own bookkeeping, but I can guarantee you there are a lot of bookkeepers in our industry. I've worked with close to 500 bookkeepers in training, either training or mentoring or some kind of service in the last nine months like since I started Savvy. That's in a very short amount of time. Obviously, before that I was still doing what I was doing but not in such a high volume. I've worked with over 500 bookkeepers, and mostly around the pricing. I've had so many conversations with bookkeepers about pricing that it's not fun. I've also had many conversations with bookkeepers about doing their own bookkeeping. I've only in my whole time, and I ask a lot of bookkeepers is, and obviously, anyone can pick a part. My stats, I can't verify exactly how many bookkeepers I've asked.
But I have worked with a lot of bookkeepers, and I can tell you that I've only ever met one other bookkeeper who doesn't do their own bookkeeping except for me. Someone asked me the other day on a Webinar, “Do you do your own bookkeeping?” I'm like, “Heck No. I don't do my bookkeeping. That's ridiculous. I'm a business owner. I don't do my own bookkeeping.” That's the whole point. Bookkeeping is about accountability. It's not about whether you have the skill to do bookkeeping or not. And that's why I said, “Oh, well. It's easy for me to just quickly get it done, but we know the real reason bookkeepers do their own bookkeeping aside from the ones that don't have a lot of income. But bookkeepers do have bigger businesses. There's only one reason why they don't have a bookkeeper doing their bookkeeping and it's not control.
Bookkeepers, and I'm not saying this to judge, I'm saying this because this is what the reason that bookkeepers have told me that they do their own bookkeeping. I would never want someone to take over my bookkeeping. This is the reality of our industry. We have a lot of bookkeepers and I fully, since this and while I have a bookkeeper, I don't do my bookkeeping then that's fine. You are in the minority. What I'm speaking to is the majority of bookkeepers, the ones who can afford staff, who still do their own bookkeeping, who don't let their staff do their bookkeeping, because they don't trust them, and they don't want to let go of control. And it's hard. It's not easy. I didn't just like wake up one day and go, “Oh, I'll just let a bookkeeper to do my bookkeeping.: It was a process that I evolved into over quite a long period of time. This is what the process looked like.
I thought to myself, I'm always telling business owners that they shouldn't DIY. I'm always telling them the reason that they should have a bookkeeper, they've got better things to do, like run their business. Then I thought to myself, “Well, am I practicing what I preach?” And The response or the robot to this little papers will say to me, “Yeah, but the difference is that they don't know how to do bookkeeping, and I'm really good at it.” To say that you're actually missing the point of what bookkeeping is full. If you think bookkeeping is just about entering numbers correctly, then fine, you're right.
But if you understand the real purpose of bookkeeping, it's twofold. Bookkeeping is about transparency. Bookkeeping is about having another set of eyes on the books, because when we're left to our own devices, we have a natural tendency to drift towards, “Oh, I'll just put in this little expense claim here, or just put this here.” I'm not saying bookkeepers know bookkeeping so they know how to game the system or anything like that. I'm not implying a bookkeeper's use their own skills to do dishonest things in their own books or whatever. The things that we do as bookkeepers, it might not even be dishonest. I knew all of the things that I could legitimately get away with claiming. I claim a portion of my rent, all these different things, a portion of my car, and all that sort of stuff.
Then I started thinking to myself, “I'm just looking for ways where I can get deductions out of expenses that I need to pay for it anyway. And what I started to do is go, “You know what? I'm going to forfeit that as a deduction, because I want to see the true position of my business rather than this skewed version that's really leaning towards getting as many deductions as possible. I started doing that, and that was great. That was a really big step forward in my business, because I was able to see my true position. That's a start. The other thing for me was like, the reason I didn't want people looking in my books is because, it feels personal and it feels like, “Oh, I don't want other people to know how much I earn or even more of a concern for me was how much I spend and how much I keep.” For those of you who have heard my story, I made $100,000 in my second year of bookkeeping.
My first year I was only just dabbling and I was pregnant and all that sort of thing. The second year I got up to the half, well, $11,000 a month with my highest month towards the end, just before I decided to close it down. I was in shock, because I thought, “Wow, I'm doing so well.” And then when I looked at my profit and loss for the year, I had not only spent all of my income, I had spent more than all of my income. I had contributed $30,000 of my husband's own salary into my business and I'd made a $30,000 loss. Hurray.
That is the reason why. Now, look, I'm not as conservative as a lot of bookkeepers. A lot of the bookkeepers that I work with, they're very lean on their costs and always get shocked, because I looked at myself in that kind of first real year and I was like, “Oh my goodness. I've not only spent all my money, but the reason I spent so much money is because I was researching lots of different software programs. I was trying to build this like really cool system. And I was trying to, I don't know. Just like in a bit carried away and it was fun, and whatever.
But it was really stupid. I remember having to sit down with my husband and tell him that we hadn't made any money, and then also, we'd not only not made any money, but I'd be contributing his salary towards our loss that I'd made. But I don't really feel like it was a loss because, thankfully everything that I spent the money on, it wasn't just wasting it on staff. I was spending it on, I guess a lot of, I was doing a lot of training, a lot of business related courses, and that was really kind of blowing at my face, and also testing out some different softwares. Thankfully, the fruit from that has come through. I'm now starting to more than recover those days of losses.
It was really a growth phase and investing in my career, but at the same time, it was scary. It was a process of being able to let a bookkeeper into my business, and especially because a lot of people in the industry know me. I was also very nervous. I didn't want the whole bookkeeping industry knowing my business. The next step for me was like, “Okay, I need a bookkeeper. I need someone to do this so I can focus on actually running in growing my business.” I thought, “All right. I'm going to hire a bookkeeper.” And then I thought, “Okay, well, how much am I going to pay for a bookkeeper?” I thought, “Well, I charge $80 an hour.” And then I thought, “Would I be willing to pay $80 an hour for a bookkeeper?” And I thought, “Not really. I don't want pay $80 an hour for a bookkeeper. I want to pay less.”
All right. Well, I have to practice what I preach so I'm going to do it. I did it, and it was just a really bad experience. She didn't prioritize getting my stuff done at all. Sometimes I'd just get this tiny bill at the end of the month and then she hadn't done any work. I think a bookkeeper that's charging that much, they're obviously doing well, and they probably … I guess, I felt that the level of service wasn't there for me as a very small business owner. When you're in that initial very small business light and that cash flow is tight, you need to really be on top of your bookkeeping. Everything has to be updated at least on a weekly basis.
I just couldn't get that and I was paying $80 an hour and it wasn't up to date ever. I was like, “This is crazy, okay?” I ended up hiring a $70 an hour bookkeeper, and I still that didn't work out. Then I had a $45 an hour bookkeeper, and that didn't work out either. It was fun. That was better than the other two. At least the bookkeeping work would get done. But I found this person didn't resolve issues. She'd leave things to me at the end of the month. I was still spending a lot of time in the data file. Then I ended up getting a bookkeeper for a lot, let's just say a lower rate than that. I'm not going to open another can of worms there, but I'd be get a bookkeeper who was a lower rate than that, and she's fantastic. Her work's very high quality, and she comes to me with a list of queries, and she always makes sure I have all of my tax invoices, and yeah.
Like, she would chase me up about the tax invoices, and if they're missing, she doesn't let me claim a thing. And I think she offers a really high standard and she charges those low rates. There, you can see in my own real life example, I'm not bothered by a bookkeeper who charges $30 an hour, for example. That's not the issue here. The issue is, firstly, there's no correlation between price and quality and value. as you're seeing on the posts in Facebook, people are saying, “Oh, well, are they a BASS agent? Are they… My bookkeeper's, not a BASS agent. She's better than the last, oh, actually the first two, the $70 and the $80 one were BASS agents and they were terrible.
The second to the $45 and the much lower, which I'm not going to say, because people probably will send me hate mail. No, of course, bookkeepers wouldn't send me hate mail. You'll probably send me all this mail saying how much I love me and how grateful you are that I'm showing insight into our industry. But anyway, I'm really scared, so I'm not going to say. I have said on other occasions, so, if you really want to find that, you can listen to my other podcast and find out how much I pay my bookkeeper.
But anyway, the point is that, the cheapest bookkeeper that I've hired has been the best. And so, I believe there isn't information out there for people to access. The way that I know this is because I left the bookkeeping industry. I closed down my business, and I started a different kind of business.
I started a website design business and I was doing websites for bookkeeping. I hadn't actually left the industry, but I'd left being in that bubble of doing bookkeeping and working with the clients. Being able to go outside the bubble, I know for a fact that business owners don't have easy access to information that's reliable and trustworthy about how much they should be paying for a bookkeeper. I know there isn't information out there about how to know if the person … Of course, you can find blog posts by companies saying, “This is how to pick the best bookkeeper, and by the way, that's us, so hire us.”
Everybody's biased. The information that is out there is biased. Now, I think obviously, as people stayed at the ICB information is known as a credible source, but I don't know what kind of bookkeepers are ICB members. I don't know if they've just happened to capture a segment of the market. I don't really know the whole picture. But I do know that as a business owner myself, I had a lot of trouble finding a bookkeeper. Now, I ended up going within the industry and finding people that I trusted, initially.
I felt that they didn't do a good job for me. I don't think they're not the bookkeepers, I just think they didn't have the capacity to serve me at the level that I needed. Then I went outside my bookkeeper network bubble and found somebody. I found somebody through LinkedIn, who I hadn't previously known and someone who's not a part of our bookkeeping industry bubble. They're not in our Facebook group and stuff like that.
That was good, but for me, it's not about whether I trust another bookkeeper to come in and look at my accounts. I've had bookkeepers come and look at my accounts and honestly I don't really care. As I said, it's a journey to get to that. At the start, I would not have wanted someone else to do my own bookkeeping, but the reality is, until … Okay, if you're a bookkeeping business owner and you've tried to hire bookkeepers, you know what it's like to try and find the right team member. That's one thing.
I'm not saying that you as a business owner have never hired a bookkeeper before, but what I'm saying is, when you go to hire a bookkeeper, an internal bookkeeper to do your bookkeeping, you're going to have a totally different experience. This is not a hiring a staff member who's going to work on your clients and generate income. This is hiring an internal staff member who's going to be doing non billable work, working on your accounts as your employee and having insight about your financial numbers, and they're going to know everything that's going on. That is a totally different process.
If you're willing to give this a go, like, I think this, for me, this provided the biggest insight that I've ever gotten from anywhere. Now, I've paid a lot of money for education, like, a lot of money. You don't even want to know how much money I've invested in my intellectual property that lives inside my brain. It's a lot. For me, when it came time to hire a bookkeeper, for me, the thing that really deeply convicted me was, I need to practice what I preach. I need to be transparent. I need to have somebody else come in and oversee my books. And it's not because I think that bookkeepers … it's not that I think you're going to do the wrong thing or that you're going to lie in your accounts. It's about being willing to let that second set of eyes come in and look at your books, and give you that layer of accountability. It's not easy.
I had to go out there, and even after paying so much on my own education, the most valuable knowledge and education that I've ever received in my career to date has been to go through the process of being a small business owner who's trying to hire an internal part-time contract bookkeeper. I went on Google, and I looked for bookkeepers on Google, and I couldn't find anyone who I felt I could connect with. Firstly, and this is one of the reasons why I got into website design for bookkeepers is because when you go on bookkeepers websites, it's so hard to be able to find people that you can connect with and people that you find the same that share the same values with.
The bookkeepers websites, they're just like, a lot of them are still so outdated and they're very full of bookkeeping jargon and it makes you think as a business owner, well, I don't know if I can trust this person or I don't know if they're able to offer me a service beyond just doing data entry. Are they going to be able to help and guide me in my business? Are they going to be able to help me get on time accounts and reports and stay on top of my cashflow and make decisions and track KPIs. They give me, not saying that they have to track the KPIs but saying are they able to provide me with the data so that I can figure these things out to grow my business.
I couldn't find anything online, and it was really through a bookkeeper approached me on LinkedIn. That's how I got my bookkeeper and my current bookkeeper. She's great, But had I continued the journey of trying to find my own bookkeeper, I found out a very frustrating process, because there is an information out there, and to leave the industry and to look at it from the outside perspective, to look at it from the perspective of the business owners. Anyone can say, “Oh that business owner like, what an idiot? He hired a cheap bookkeeper. If you pay peanuts, you get monkeys, and they get what they deserve. Now that they have their books in a mess, it's like, “I told you so you fool.”
That's the attitude that I think sometimes people will bring to small business owners, and I just think that is wrong. Now, there's a lot of bookkeepers out there who are just like, “Well, business owners are idiots.” They don't care about their bookkeeping. They don't care about their bookkeeper. They don't do anything that I want them to do. The software that I want. They won't follow my processes.” There is a big tone out there and look, there are some business owners out there who are ITA. I did a podcast about that, if you want to listen to that. There are PITA clients. I think just listen to that podcast, because the thing is, I I got to be one of those PITA clients for my bookkeeper, and that's fun.
Firstly, you don't know how much of a pain in the butt you're going to be for a bookkeeper. But that's one thing. Sometimes I think people that think that they know everything about bookkeeping, I don't know, but they might not be as good as they think they are. I've been through this process so many times with my team. I've been transitioning my whole team from contractors to employees, and I now have my staff, and my most recent recruit was our new digital marketing manager. To go from having contractors to employees is like, “It's like fresh breeze in the park.” Like, oh my gosh, it's just so nice. Like employees, no offense, like contractors, but I hate contractors. I feel contractors are really, they're not good for business, because contractors, they're busy with so many other clients.
I just find with contractors, the level of services in there, and also … I'm not saying all contractors do this, but it's in the contractor's best interest to not do an amazing job. They just do their bit and they make their recommendation based on their own small area of experience. But they don't ever take the time to understand the bigger picture of the business. Whereas, an employee, they can come in and they can immerse themselves in your business and in your industry, and they can learn everything that they need to, to know. The downside is, I mean, the reason people have a scan of doing this is because then you've made a commitment. Upon practice, it's easier not to commit and get out of it whenever you want.
But the thing is, with employees, you've got to commit to a minimum amount of work to give them. My employees are part time. All my employees are part time. There are either permanent two days a week or permanent three days a week. Because, I know I'm going a little bit off topic here, but at the end of the day you've really got to back yourself. I think if you're serious about growing a business, then even if you don't have the working, a lot of bookkeepers go, “oh, I can't find good employees.” But they're saying to the bookkeepers in the ads, “It could potentially be two weeks, two days per week, but it's going to start off and there's no guarantee of hours, and it might be just starting off at two hours and then increasing.
Who's going to want to go for that? I know some people like that, but employees wants security and they want a place where they can put their roots down and actually grow. I don't know. I just love having employees. I just want them. They're just nice. They become part of the culture. I don't care that they're doing what's considered unbillable work, because what I do is I make sure that they're always working on value add work. If they're not billable, because I think bookkeepers are in this bubble where every cent has to be billable. If it's not billable then, and that's why we like contractors because they only charge us for the billable hours. But what you're missing out on is all of the other value add work that employees can do when they're not working on client stuff.
We have all of our team working on various projects to improve the value of our business. We get them to work on maybe developing a new service, offering our new lead magnet, or a new web page or you know, a new marketing campaign. We get our staff to work on lots of different things that can add value to our business. We think that the only thing that add value to our business is only have billable hours. There's a broader perspective to think about when you're growing a business. It's not just about the billable hours, it's about the value that's getting added to your business as well as the billable hours. Anyway, that's just my thoughts about all of that. I guess my whole entire point is really around, there's so many different rates out there.
Everyone's charging different rates, and the reality is that isn't helpful, reliable, trustworthy information out there that business owners can go to like, non-biased information. As I said at the start, I'm in the middle of researching my SEO, and I am certainly going to rile lovely blog posts on my website, and I'm going to call it … oh what am I going to call it here? I've got it open in front of me. What is the cost for quality? What peeping on Australian businesses? And I'm going to talk about rescue jobs. I'm going to talk about what happens to clients in a rescue job, and I'm going to talk about the relationship between the business owner and the bookkeeper. I'm going to talk about, and I think I've already done a blog post where I talked about how higher prices of bookkeeping don't necessarily equal high quality, because in my experience, that has not been the case.
Anyway, I'm going to write a blog post about that. I might even share it with you. It's going to be on my bookkeeping website, off the hook with KP. If you want to go in there and have a little bit of a page. Now, the reason I'm showing you this just because like, firstly, for those people on the Facebook post that thinks that my motivation for looking at other bookkeepers rights is about feeling competitive, that's completely the opposite to the truth. I let bookkeepers come and look at my website. I say, “So my bookkeeping business, I restarted my bookkeeping business about four months ago after having closed it down in 2017, and I share. I started as an experiment and now it's gained momentum. We've got about 450 bookkeepers in what I've now named the bookkeeping project.
The bookkeeping project is a slack channel and about to … basically, what I'm doing is I'm building a library of resources. As I'm starting my bookkeeping business from scratch again, but not really from scratch. I've learned from all of my last mistakes. What I'm doing is in the bookkeeping project. I'm all my templates. I do regular webinars, like showing people what I'm doing. I give them actually, I called it backyard experience. I'm letting them come into my backyard and watch how I'm doing my gardening. Basically, if anyone thinks, if it comes across like, “Oh, Amy feels competitive about bookkeepers. We charge $30 an hour.” It's like, “No, I don't care about competitors at all, because I just let bookkeepers come in and look at what I'm doing.
I let them copy my templates. I let them copy my marketing strategy. I don't know. I even gave away some of my secret keywords that I'd be really well off on Google and like we'll keep his copy meet. Like, I don't care. I really can't. When I started the bookkeeping project, I said the only two things I care about, is that the bookkeepers in the project have a good experience, and the bookkeeper and the clients who are now the new clients of the bookkeeping, my bookkeeping business, those clients, I care that they have a good experience and that's it.
I don't care if the business work well. I don't care if it's not successful. I don't care if it's really successful. It doesn't matter. It doesn't matter to me. I don't care if it's like some competitor comes in and blames me. I'm not really dependent on that. I rely on a much higher source for my sense of stability in my income than having to worry about our bookkeeping who charges $30 an hour. That's not my issue. My issue is I care about small businesses and I want to support bookkeepers who care about small businesses to be able to help those bookkeepers to identify and find and engage those type of business owners.
The people that I really enjoy working with and people who they can … not even that they enjoy working with the people that they can make a difference for. I guess, to answer that, I always talk about, “I want to work for people who I feel satisfied working with, and who appreciate me, and all that kind of thing.” But at the end of the day, if I do a good job for someone and they don't appreciate it, I don't care. I used to care. But I've started to get to the point where I'm like, “I don't care.” And the reason that I don't care is because I'm just here to do a good job. My role as a bookkeeper is two fold. My role as a bookkeeper is to bring transparency to businesses so that they can be accountable, and to provide reliable and up-to-date and timely information to business owners for decision making. And that's it. That's my role.
I feel that that role makes a huge difference to Australian business owners and in turn, our economy and to families all over Australia. That's what I'm about. That's what I'm here for. Even though I actually like working with Cape, because more than a lot working with small business owners, because I found a really challenging to be honest. I'm not out there going, “Hey, everyone. Help me and what am I doing my business, because I'm just so amazing at what I do. I used to feel that way, but I don't anymore. I think I suck at bookkeeping business. I don't know. I didn't feel that I did very well in the business, and I really struggled with clients who are aggressive and rude and ungrateful.
I think I've moved past that, and so I work with a lot of bookkeepers, and I very, very rarely work with a bookkeeper who's like rude and ungrateful. Most of the bookkeepers I work with are very appreciative and very thankful and very respectful of my time. It's very few that are more like the business owners that I used to work with, like, “Just give me what I want. I gave you my money. Give me what I want.” kind of thing.
I love to collaborate with people. I love to work with people who value that to the relationship. For me, that's where it's at. I think now going back into the bookkeeping business and getting these new clients into myself, you know what? If I do a great job for someone and they don't appreciate it, I don't really care. The reality is, I've done my part and that's really all you can do.
Anyway, thank you so much for listening. I'd love to hear any of your thoughts and comments. Feel free to send me a message, or some hate mail, or box of chocolates. I don't know, whatever you like. Anyway, thank you again for joining me and I look forward to seeing you next week. Goodbye.
We hope you enjoyed this podcast about the cost of hiring a Bookkeeper!
Looking to connect?
• If you are a Bookkeeper who otherwise needs help with Savvy's other services, such as; Sales, Marketing, Website, Google Ads, Facebook Ads, Business Logo and more, please get in contact.