Accounting & Bookkeeping & Small Business Forum

[cfc87485]

I charge an hourly rate for my accounting/bookkeeping service. Potential clients always seem to shy away or ask why it costs so much for my service. So far the people who have called, don't want to pay over $100 a month for bookkeeping/accounting work. Even when I meet them in person price is always an issue. Does anyone have any suggestions on how to handle the bargaining client?? Am I wasting my time trying to gain these types of clients? Should I stand my ground and say this is my rate? I'm frustrated, what should I do?

[Jennifer T]

You may need to compute a flat rate for these types of clients. So instead of charging by the hour, you will calculate how much work there is and quote a monthly rate, ie, $200 a month.

I don't like to use the flat rate system (and in my area charging by the hour isn't a problem), but many people on these boards use flat monthly rates, and are quite successful with it.

The UA course teaches how to do this. Have you taken it?

[David]

There are three main reasons hourly is tough:

1 - People do not like to pay $75/hour. When you bill hourly you compete with the classifieds and every unemployed accountant out there. Clients balk at $75/hour because they open the newspaper and see that they can pay $15/hour.

2 - Billing hourly is an administrative nightmare. You will spend a third of your time tracking your time.

3 - If you bill hourly, the prospective client will ask "How many hours will it take?" Remember that the only point of reference to how long the work will take that a business owner has is the amount of time that THEY spend doing their accounting. It is hard to convince anyone that if they spend 1 hour a day (20 a month) that you will only spend 5 hours a month.

The Professional Bookkeeper "PB" course offered by UAC has a section on pricing. If you are a student, contact me and we can discuss the process you go through while negotiating the price. There is a scripted process on how to address rejection and how to arrive at the best rate. Feel free to email me or another UAC coach for further information.

[cfc87443]

Thank you. I will try the flat rate pricing and no I haven't taken the course. By the way, what if the clients activity increases while on a flat rate?

[David]

In the letter of engagement that you will send them when they become a client, you will make some sort of statement like: "We will regularly review the work being done and if the work required increases or decreases significantly we will adjust the billing rate"

Also, You may want to go to http://www.accountbiz.com/ to attend a free two hour seminar or you can go to http://www.accounting-and-bookkeeping-tips.com/ to recieve a free DVD of the same seminar. You will learn more about pricing, marketing and Universal Accounting Center's training.

Good Luck