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Guidance Needed on Pricing for My First Solo Client
I’ve previously collaborated with CPAs and Bookkeeping professionals who subcontracted work to me. However, I’m unaware of what they charge their clients hourly. I’ve also secured a few clients on my own through Upwork and referrals. While these agreements were based on hourly rates, I initially agreed to lower prices to gain experience and build my client portfolio. Now, as I transition to a more serious pursuit of new clients, I aim to implement flat rate fees.
I’ve devised a pricing structure for my first prospective client, who maintains only one bank account with fewer than 100 transactions. I’ve quoted them based on the services they require. Does this pricing seem fair? For context, my client is a small S-Corp from the East Coast, USA, with only one employee for the current payroll.
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$200 per month for expense/income tracking and account reconciliation for up to 100 transactions per month. (If you occasionally exceed 100 transactions, that’s fine. If the average exceeds 100 transactions over six months, we’ll revisit pricing.)
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$25 per month for the preparation of income statements, balance sheets, and other reports upon request.
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$50 per month for payroll services for up to 3 employees. (Gusto’s monthly service fees are covered by the client.)
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$50 per year for 1099 preparation and filing for up to 25 vendors/contractors, billed annually in February.
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$25 per quarter for estimated tax filing and payment, billed in April, July, October, and January.
I would greatly appreciate any advice or insights. Thank you!
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One response
When pricing services for your first solo client, especially as you switch from hourly to flat rate fees, it’s crucial to consider a combination of market standards, your experience, and the value you provide. Here’s an analysis of your proposed pricing strategy with some considerations and potential adjustments:
1. Expense/Income Tracking and Account Reconciliation ($200/month)
Market Benchmark: For small S-Corps and similar small businesses, Bookkeeping fees typically range from $200 to $500 per month. Your price is on the lower end, which might be acceptable given the scope (<100 transactions) and simplicity of the account setup (one bank account).
Consideration: Ensure you’re not undervaluing your service. If your client’s transactions are straightforward and don’t require complex categorizations, this could be a fair starting point. However, if there’s any complex reconciliation involved, you might consider starting a bit higher with room to negotiate.
2. Financial Reports Preparation ($25/month)
Market Benchmark: Some bookkeepers include this in their monthly fee, while others charge extra, depending on the complexity and frequency of report generation.
Consideration: $25 is affordable, but consider whether these reports are requested monthly or quarterly. If they aren’t required frequently, ensure that you’re covering your time and effort adequately.
3. Payroll Processing ($50/month for 1 employee)
Market Benchmark: Payroll processing fees often start at around $50 to $200 per month, depending on the provider and employee count.
Consideration: Your pricing here seems competitive for one employee. As the business scales, make sure there’s clarity on how additional employees will affect pricing (you mentioned up to 3 employees for this price).
4. 1099 Prep and Filing ($50/year for up to 25 vendors/contractors)
Market Benchmark: This is usually an add-on service and fees can range from $50 to $100 annually for up to 10-20 forms.
Consideration: $50 for up to 25 filings is generous. Ensure that you’re clear about any additional costs if the 1099s increase in number or complexity.
5. Estimated Tax Filing & Payment ($25/quarter)