Accounting & Bookkeeping & Small Business Forum

dp1903 · Posted: Thu Jul 24, 2008 5:56 pm Post subject: Average transactions per hour?

Hi. I was wondering about how many transactions I should project per hour to be an average amount in order to calculate what my per hour earnings would be? I've estimated 45 to 60 an hour, but don't know what someone in business for themselves actually achieves.

Also, I've seen a range of suggested rates per transaction and it suggests adding $100 for financial statements. I'd love to be able to justify that amount, but on a monthly basis it sounds a little high. Using QuickBooks all I'd have to do would be to print the statements using QB or slightly modify them on a spreadsheet before printing. I was wondering what others charged for monthly financial statements and if there is anything I haven't thought about in regards to preparing them? Thanks.

This will help me more realistically be able to know what to expect earnings and profit wise. I guestimate that after all taxes and expenses my actual take home earnings would be somewhere in the 35% to 45% range of my gross revenue.

stasia2003 · Joined: 25 Feb 2008 Posts: 199 Location: FL

dp1903 wrote: Hi. I was wondering about how many transactions I should project per hour to be an average amount in order to calculate what my per hour earnings would be? I've estimated 45 to 60 an hour, but don't know what someone in business for themselves actually achieves.

Also, I've seen a range of suggested rates per transaction and it suggests adding $100 for financial statements. I'd love to be able to justify that amount, but on a monthly basis it sounds a little high. Using QuickBooks all I'd have to do would be to print the statements using QB or slightly modify them on a spreadsheet before printing. I was wondering what others charged for monthly financial statements and if there is anything I haven't thought about in regards to preparing them? Thanks.

This will help me more realistically be able to know what to expect earnings and profit wise. I guestimate that after all taxes and expenses my actual take home earnings would be somewhere in the 35% to 45% range of my gross revenue.

Well, 95% of my accounting business is virtual. I charge by the hour and most high quality customers have no problem with that. I also choose to charge hourly for my local people. Financial statements are generally rolled in with everything else if it's computerized. The UAC fee calculation is based on a manual accounting system so charging people an additional $100 for financial statements didn't quite sit well for me. If you want, you can still charge a fixed rate but include the financial statements then it may not seem so high.

If you are just starting out maybe just charge $25/hour. Then gradually start raising it once you get a taste of what the workload is like. That's what I do. One of my virtual clients is a $3 million dollar a year online business and he had ALOT of work because he had no accounting system in place. Even with me only currently charging him $15/hr(yes I know), he is very happy with my service. I will most likely raise the price after about 3 months.

Of course others here will probably have a different opinion.

dp1903 · Posted: Fri Jul 25, 2008 12:15 pm Post subject:

Thank you, Stasia, for your reply. I've been in business for myself twice before and didn't charge enough either time. I've learned my lesson in that regard. $25/hour times 40% would be $10/hour which is about what I would make an hour after all expenses, including taxes, assuming I work out of my home. That's about $14/hour if I were working for someone else. But, then take into consideration that I have to do my own books and that reduces it to perhaps $12/hour. That would be acceptable in my part of the country but $30/hour would be better. I have a CPA friend who is my age, 58, and is only making $40,000 a year. My city doesn't pay a lot for accountants in general. I'd prefer to charge by transaction so my client can calculate what it will cost him.

By the way, $15 an hour is way too cheap in my opinion. If I can't earn $25 to $30 an hour starting out, I'll work for someone else. I'm good at problem solving and have proven that to my employers. I'm not just a "bean counter" as some call us, but have proven I can help a business improve it's gross margin and bottom line through paying attention to pricing, costs, budgeting, and getting reliable numbers on a timely basis from the accounting system. It ain't just for doing taxes. If you know what you are doing, the accounting system and the information derived from it can help guide a company to profitability. Taking into consideration that we have to do our own books, that extra time to take care of our own business as well as others significantly reduces what we make an hour in real terms. Thanks again, Stasia.

If anyone is uncomfortable with stating rates openly, you can email me.

stasia2003 · Joined: 25 Feb 2008 Posts: 199 Location: FL

dp1903 wrote: Thank you, Stasia, for your reply. I've been in business for myself twice before and didn't charge enough either time. I've learned my lesson in that regard. $25/hour times 40% would be $10/hour which is about what I would make an hour after all expenses, including taxes, assuming I work out of my home. That's about $14/hour if I were working for someone else. But, then take into consideration that I have to do my own books and that reduces it to perhaps $12/hour. That would be acceptable in my part of the country but $30/hour would be better. I have a CPA friend who is my age, 58, and is only making $40,000 a year. My city doesn't pay a lot for accountants in general. I'd prefer to charge by transaction so my client can calculate what it will cost him.

By the way, $15 an hour is way too cheap in my opinion. If I can't earn $25 to $30 an hour starting out, I'll work for someone else. I'm good at problem solving and have proven that to my employers. I'm not just a "bean counter" as some call us, but have proven I can help a business improve it's gross margin and bottom line through paying attention to pricing, costs, budgeting, and getting reliable numbers on a timely basis from the accounting system. It ain't just for doing taxes. If you know what you are doing, the accounting system and the information derived from it can help guide a company to profitability. Taking into consideration that we have to do our own books, that extra time to take care of our own business as well as others significantly reduces what we make an hour in real terms. Thanks again, Stasia.

If anyone is uncomfortable with stating rates openly, you can email me.

I do pay attention to my hourly rate but I'm more concerned about just getting the bills paid. I know about federal taxes but I'm more concerned with keeping my car and my apartment so Uncle Sam can wait.

If you charge by the transaction, it generally won't be a consistent rate each month. It may stay in the ballpark but it won't stay the same unless you do a fixed rate.

dp1903 · Posted: Fri Jul 25, 2008 1:34 pm Post subject:

Quote: I do pay attention to my hourly rate but I'm more concerned about just getting the bills paid. I know about federal taxes but I'm more concerned with keeping my car and my apartment so Uncle Sam can wait.

If you charge by the transaction, it generally won't be a consistent rate each month. It may stay in the ballpark but it won't stay the same unless you do a fixed rate.

Just trying to help. I'm not concerned about charging the same total dollar amount monthly. Just want to get paid for the work I do whether it's by the transaction or by the hour. Either way, I would not expect the amount to be the same each month. That would be unreasonable since each month's work in terms of transactions, and therefore, time would vary. If someone doesn't like that, they can find someone else. I'm in this to make a living, not do someone else a favor. In the past, it leaned more to doing someone else a favor. Lesson learned. Good luck to you!

dp1903 · Posted: Fri Jul 25, 2008 1:42 pm Post subject:

By the way, uncle sam takes out a minimum of 28% of your net income for the year, 15% for income taxes (after personal deduction and exemptions) and 15.3% for self-employment taxes. If you don't include that in what you make an hour then you are likely selling yourself way too cheap. My guess is that $15 an hour would be equivalent to $8.50 to $9.50 an hour working for someone else. But, then you have to do your own bookkeeping reducing that to perhaps $7 to $8 an hour. Something to think about.