Have you ever wondered what the cost of hiring a bookkeeper is?
I mean, you know what YOUR rates are, and you probably have a good idea of your local competition’s prices. But do you know what is expected in the industry, or what the industry average actually is?
More importantly, do you know what your CLIENT expects?
In a recent couple of recent podcasts, I go in depth about this very topic. In fact, I also look at online competition, common misconceptions and so much more >>> listen to The Bookkeepers’ Voice Ep.22 Cost of Hiring a Bookkeeper in Australia!
Also check out Ep 27 where I discuss The True Cost of Rescue Jobs on Bookkeepers (and Business Owners!)
If you’re a small business owner, it can be SO hard to find the right bookkeeper, and the right services.
In fact it is very hard for small businesses to find the correct information about bookkeepers, and their prices.
Many business owners don’t really understand what’s involved in the different levels available in a bookkeeping service. This means it’s very easy for them to start comparing apples and oranges!
This came to my attention when I was doing some research and stumbled upon an article on ServiceSeeking, an Australian online business directory. People can go on their website and get quotes for various services, hire tradespeople, and compare prices (I bet you can already see the trouble here!).
It’s popular, convenient and easy to use…. Which makes it a very heavily used website, as you can imagine!
Now, while almost every industry can (and does!) use this website, it’s really geared towards Tradies.
This isn’t a problem, of course, but it does create a bit of a conflict for the bookkeeping industry! See, on ServiceSeeking, people are probably going to look for the CHEAPEST service. After all, that’s usually what you do when you want to hire a plumber, or an electrician. So people are going to use the same logic for ANY services on that site.
Unfortunately, this perception can make a BIG impact on how people understand and evaluate bookkeeping services (and it’s not always for the best).
This was really brought to light when I did a bit more digging and found an article that stated the following, “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.”
$40 per hour on average!?
That surprised me because our professional industry bodies run annual surveys which show the average rate is $65. In fact, I know bookkeepers who charge up to $90 per hour. That’s a pretty BIG difference!
Obviously, this kind of misleading information can make it confusing when bookkeeper’s are quoting small businesses more for their services. It can seem like the bookkeeper is overpriced, even when they are really not.
Everyone’s charging different rates. And, to be honest, there isn’t helpful, reliable, trustworthy information out there that business owners can go to. Most of the information is biased, and that makes it really hard.
This is clearly a problem in the industry. After all, if businesses don’t have the right information, how can they make the right choices for their business? Or work effectively with their bookkeeper?
Now, I know that it can be SO easy to say, “Well, people get what they pay for, it’s their fault if they aren’t getting good service!”
But really, it’s not necessarily true, for two reasons!
Small business owners are often bombarded with a range of inaccurate information. It’s not necessarily their fault, if they don’t know what the TRUE average price is, or WHY they are being charged so much.
Cost doesn’t necessarily reflect quality of service. In my experience, just because you’re paying more for a bookkeeper, doesn’t necessarily mean that you’re getting better service. In fact, my current bookkeeper isn’t on the higher end of the spectrum when it comes to her prices, but she is absolutely fantastic, and does a really great job at helping me keep everything transparent.
You see, anyone can say, “That business owner’s an idiot for hiring a cheap bookkeeper. If you pay peanuts, you get monkeys! They get what they deserve!”
It’s a LOT harder to take a look and go, “Hang on, these business owners are being really misinformed! What can I do about it?”
So, what can we, as bookkeepers, DO about it?
To start with, we need to be really clear and really transparent with our services.
If our clients know WHY they are being charged a certain amount, they are going to feel so much more comfortable paying it.
It’s also important to be really clear on the VALUE that you are bringing to your client’s business, and why it is best to go with you, as opposed to someone else (possibly cheaper). If you specialise in payroll, let them know how that will benefit them in the short term (and long run!).
One great way to make sure you’re clear and transparent with the client, is to do a proper bookkeeping health check FIRST. Once you’ve done this, provide a quote with detailed scope outlined, giving them options on what they want you to tackle, or leave out.
I’m running a workshop on exactly how to do this VERY soon. >>> Join Job Scope & Health Check training here.
It might be perfectly clear to YOU why you need to do a certain step when it comes to lodgement, but your client probably has NO idea why it needs to be done, or what it means.
By making sure that you communicate effectively (and ditch the jargon), your client won’t be left wondering where their money is going. Remember, it doesn’t mean they’re unintelligent if they don’t understand… this is YOUR field of speciality. You are the expert, not your client.
Over to You…
Communication is key! If you can offer your clients unbiased, honest and clear information about your services, they are going to be so much happier working with you (and you’ll have less PITA clients to deal with!).
Remember, with all of the misinformation out there, it’s natural for clients to get confused about what they perceive to be higher prices.
P.S. If you want to learn more about how to do a Bookkeeping Health Check and Report, plus prepare a quote based on the health check >>> Register for Job Scope & Bookkeeping Health Check training!