Seeking Guidance on Pricing for Bookkeeping Services: New Freelance Opportunity
I’m currently working full-time as an office manager/bookkeeper for a company generating approximately $2.5 million in revenue. Recently, I launched my own freelance Bookkeeping business to expand my client base. My employer, along with two associated business owners, is opening a new mechanic shop and has asked me to manage the Bookkeeping and office operations for it. These businesses own a considerable amount of vehicles and equipment, and having an in-house mechanic will help reduce costs.
The mechanic shop will hire one W2 employee who will track his work using Google Sheets, and I will handle invoicing to the appropriate company. They mentioned that the volume of transactions should be relatively low. Additionally, I’ll be responsible for processing payroll for this employee, which will not be automated—time will be logged manually.
I informed them that I could work either as a W2 employee or through my freelance business. However, I’m having difficulty determining an appropriate pricing structure. My current employer suggested a fee of around $15K annually ($1,250 per month), but I want to ensure that I accurately account for all my time and avoid undervaluing my services.
Here are a few key considerations for me:
- I’d like to coordinate this payroll with my existing payroll process to minimize additional administrative work.
- I want to safeguard against taking on extra responsibilities without adequate compensation for them.
- The exact volume of transactions is still uncertain.
- I will need to set up QuickBooks Online (QBO) for the shop.
For those with experience in similar situations, how would you recommend approaching the pricing? Would you propose a flat monthly fee from the start, or wait to track time for the first month to gauge actual workload—keeping in mind that the initial month may involve additional time for software setup?
I’m also open to any insights regarding potential time drains I may not have considered, as well as opinions on the proposed monthly fee. Thank you in advance for your advice!
One response
It sounds like you’re in a great position to expand your Bookkeeping business, especially with the trust of your current employer and sister companies. When determining your pricing for the new mechanic shop Bookkeeping, here are several considerations and strategies that might help you:
Assess Your Value: Given your experience as an office manager/bookkeeper, it’s essential to price your services based on your expertise, value proposition, and the complexity of the work involved. If you’re saving them time and potentially money with your services, you should ensure your pricing reflects that.
Consider a Flat Fee: Offering a flat monthly fee can be beneficial for both you and the client, as it provides predictability in budgeting for them while ensuring you have a consistent income. However, since you’re unsure of the volume of transactions and additional tasks, it might be wise to initially gauge the workload. You could start with a trial period (e.g., the first month) where you track your actual hours to establish an informed monthly fee moving forward.
Factor in All Responsibilities: In addition to Bookkeeping and payroll, think about any potential needs for reporting, reconciliations, or communication that may arise with their other companies. It may be beneficial to set clear expectations upfront regarding what is included in your monthly fee and what would be considered additional work (and billed hourly or as a project fee).
Understand Time Drains: Some common time drains in similar setups include:
Software setup and troubleshooting issues with QBO.
Evaluate Other Pricing Models: Here are a few pricing strategies to consider:
Annual Contract: Offer an annual flat fee with the option to revisit the pricing after the first year based on adjustments in workload.
Market Rates: Research what other bookkeepers charge in your area or for similar services. For instance, if more experienced bookkeepers charge upwards of $1,500 to $2,000 a month for similar arrangements, you may want to adjust your pricing accordingly.
Ultimately, the pricing structure you choose may also depend on your long-term goals. If you’re looking to grow your freelance business rapidly or establish a long-term relationship with these clients, competitive pricing may entice them, potentially leading to more referrals. However, don’t sell yourself short; ensure your pricing accurately represents your skills and the quality of work you provide.