They will claim to provide all your accounting and bookkeeping needs for a low fee and have all the necessary skills and abilities listed below but not limited to:
Is it possible that ‘too good to be true’ applies? Their cheap (inexpensive) postcard or Craigslist offer may have you wondering how a part-time bookkeeper or accountant can get it all done? Especially, if at tax time your advisor told you it is very important that you hire a bookkeeper? (While pointing out the weaknesses in your current system.)
Bookkeeping fees are dependent upon the volume of transactions, whether you have employees, how complex your industry is, whether you need job costing. There are many factors that can influence bookkeeping fees.
Experience can be reflected in number of years, but if they are not up-to-date with industry trends, laws, and technology their long-term experience may also be an indication they are out of step with new barriers and opportunities. Length of time on the job is not reflective of expertise.
Hourly vs Fixed Fee
What appears less expensive as an Hourly Rate can easily become a big surprise and expensive. Fixed Price Value Billing is beginning to gain in popularity as it limits the surprises but a bookkeeper hungry for business may offer a low price that is not sustainable. Many bookkeepers request all or a portion of the fees paid upfront through a deposit or retainer. An upfront fee can send a signal of ‘expensive’ though it is not initially an additional expense.
It’s not you, it’s me
The reason bookkeepers can be expensive may have less to do with them and more to do with the client’s business. When an experienced bookkeeper does an assessment, and finds the following conditions in a business, they understand a higher commitment level is needed and that will be reflected in the fees. If these apply to your business, expect to pay a higher fee:
If a large amount of time is needed to check the accuracy of your records, this can be an expensive service.
On the surface, one business appears to have the same need as another for bookkeeping but there are many hidden issues. An experienced bookkeeper does not judge but will instead help to solve these (and other) issues.
A bookkeeper who does not specialize, who ‘does all bookkeeping for anyone’ may appear to be less expensive but they may miss industry related issues. Bookkeeping for contractors is not the same as bookkeeping for a retail store. Missed opportunities or surprises become an unexpected expense.
While difficult to believe, there are accountants who claimed bookkeepers are too expensive, who then try to convince a prospective client how they can offer the service for less and then inflate their other accounting costs to cover the bookkeeping fees shortfall. These accountants might sell the concept that a bookkeeper just codes bank statements which can be done cheaper by using the bank feeds available along with auto-coding rules. When the client attempts to compare to others, the real value of a bookkeeper and the services become unclear and lost.
A bookkeeper provides the skills and expertise to take care of the day-to-day efficiency of the business, making sure everything is running as it should and preventing problems that can keep the business owners from operating at peak performance.
Are bookkeepers charging too much for the service they offer? Based on the hand-written card or ad on Craigslist, it might appear to be so. But when you consider the risks and rewards of hiring a bookkeeper and how you hope to not just function but to improve your business, be wary of cheap.
Is your bookkeeper too expensive?
Is your bookkeeper too expensive? Have you been hesitant to hire a bookkeeper because of rumors and myths? Start a conversation with Eric Moore, Accounting Solutions Partner’s Practice Lead, to learn how a part-time, vetted, experienced bookkeeper can be an asset… and not too expensive.
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