Practice Development Articles
Setting Your Rates
What Price Should You Charge for Bookkeeping Services?
By: Sandi Smith
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Editor's Note. Practitioners interested
in setting rates will also want to read the latest pricing survey results from January 2005, in
What You Charge for Your Services.
When most people think about what to charge for their services, they think about themselves. This is only natural. Perhaps they think about what fees they've received in the past, how much experience they have, or what type of credentials they have. I believe this is the wrong approach.
Start with the Client
Pricing starts with the client, not the service provider. If you can put yourself in the shoes of your clients, and think like they think, you'll be able to determine your market rate.
Clients will agree to pay for a service if they find value in it. In a free market, the person who can deliver the
best value as perceived by the client will usually receive the highest price. Credentials, education, and experience
factor into the decision, but only if they increase the value of the service.
Increase Your Perceived Value
The key to accelerating your career or profit margins for 2005 is to figure out how to increase your value in the minds of your clients. When you increase your value, you can increase your fees. How can you do this? Here are some specific ways to increase your value to your clients.
- Always communicate the value you bring to the client. Otherwise, the client might not be aware of all the value he or she is receiving. For example, if you make a backup at the end of every QuickBooks® session, let clients know you do that and how that's of value to them. If you doubled your speed of entering transactions, let clients know you're twice as fast as when you started, thereby producing results faster and cheaper.
- Diagnose and act on potential problems before they become bigger. If your client has a six year old computer and a QuickBooks package from five years ago, let the client know there are ramifications of not upgrading. Help the client with selecting a new machine and installing the new version of the software.
- Suggest additional services you know the client will benefit from. If you do a client's payroll taxes, ask if he or she would like help with the sales tax return. Let such clients know you also offer QuickBooks training classes or other services. They might not be aware of them otherwise.
- Inform your client when you see functions that can be streamlined. For example, when clients create their invoices in a Word document and then type the invoice again in QuickBooks, let them know they can save time by completing all their invoicing in QuickBooks. Or perhaps your client's payroll is weekly and can be converted to monthly to save transaction time.
- Analyze your client's business and suggest improvements. For example, if you notice that receivables are slow, consider suggesting an early pay discount to speed up collections.
- Take care of your client when it comes to compliance issues. If you see clients who have missed a report date, offer to take over that task as a reminder service for them.
How many extra services such as the ones above are you performing for your clients? Because of the trade laws, I can't
tell you how much I charge or discuss how much you should charge in dollars and cents. (Editor's Note:
But Intuit has surveyed practitioners informally, and can share the results from their 2005 Rates Survey.)
But I can tell you that the more value you bring to the client, the higher your fee should be.
Sandi Smith, CPA, is a long-time contributor to Intuit® ProConnectionTM and advises business owners and organization leaders how to get more business from their web sites. Her web site is www.sandismith.com.
Last Updated: 02/14/2005
