New bookkeeping partnership, does the pricing make sense?

Launching a New Bookkeeping Venture: Is Our Pricing Just Right?

We’re excited to announce the launch of our Bookkeeping firm, nestled in the heart of Canada. As two dedicated professionals venturing into this new chapter, my colleague and I are thrilled to inherit a client base from a CPA who is retiring and closing her practice where she skillfully managed both tax and Bookkeeping services.

A primary topic on our agenda has been setting a competitive yet fair pricing model. After some consideration, we’ve settled on an hourly rate of $55. The CPA before us, with her designation, charged $70 per hour, which gives us a benchmark to assess our rate’s market sensibility.

We’ve also agreed on a structure regarding our billable hours. Instead of splitting profits down the middle, we each hold responsibility for our individual hours. This way, if we wish to expand our income, the impetus is on us to attract additional clients—a method we believe is equitable and motivating.

Together, we bring a wealth of experience to the table: over five years for me and more than two years for my business partner. Our offerings encompass a comprehensive suite of services, including reconciliation, payroll management, accounts payable/receivable, and GST/PST administration.

As we embark on this journey, we’re eager to glean insights from fellow bookkeeping professionals. If you have experience in partnerships or advice on pricing strategies, we’d be grateful for your wisdom. Thank you for your support as we embark on this exciting new path!

Cheers to new beginnings and successful collaborations!

— Your Friendly Bookkeeping Team

Starting a new Bookkeeping partnership is an exciting venture, and it’s great to see you’re off to a strong start by inheriting clients from a CPA who is closing her business. Pricing your services appropriately is crucial, not only for ensuring profitability but also for positioning yourself competitively in the market.

Pricing Considerations:

Market Research: The hourly rate of $55 is lower than the previous CPA’s rate of $70, which makes sense as CPAs typically command higher fees due to their advanced qualifications. However, it’s vital to conduct a local market analysis to compare your rate with other bookkeepers in your area, especially those with similar experience and service offerings. Websites like LinkedIn or local business groups can provide insights into prevailing industry rates.
Value Proposition: Consider how your combined experience (7+ years) and the services you offer (reconciliation, payroll, AP/AR, GST/PST) compare to your competitors. If you offer unique services or exceptional expertise, you might justify a higher rate. Conversely, starting slightly lower can be strategic to attract more clients initially, with a planned price increase as you solidify your standing.
Profitability and Costs: Ensure your rate sufficiently covers your costs and provides a buffer for profit. Factor in overhead expenses like software subscriptions, office supplies, and potential marketing efforts. It’s essential that your rate not only sustains the business but also contributes to growth.

Partnership Dynamics:

Client Allocation and Earnings: Your decision to keep billable hours allocated to the partner who sources the client seems fair and incentivizes proactive client acquisition. Just ensure clear terms are established so both partners understand expectations and contributions.
Communicate Regularly: Schedule regular meetings to discuss financial goals, client feedback, and workload. This transparency will help prevent misunderstandings and ensure both partners are aligned with the business direction.
Document Processes: As your client base grows, having documented processes for client onboarding, task performance, and communication will streamline operations and enable consistent service delivery despite which partner serves the client.

Additional Advice:

Consider Value-Based Pricing: While hourly rates are straightforward, consider eventually transitioning some services to value-based pricing. This can appeal to clients looking for specific outcomes and allows you to benefit from efficiencies without being tied strictly to time spent.
Network and Continual Learning: Join local and online Bookkeeping networks and organizations like the Canadian Bookkeepers Association. Continuous learning

One response

APAdmin

4 March 2025 at 8:24 AM
Starting a new Bookkeeping partnership is an exciting venture, and it’s great to see you’re off to a strong start by inheriting clients from a CPA who is closing her business. Pricing your services appropriately is crucial, not only for ensuring profitability but also for positioning yourself competitively in the market.

Pricing Considerations:
1. Market Research: The hourly rate of $55 is lower than the previous CPA’s rate of $70, which makes sense as CPAs typically command higher fees due to their advanced qualifications. However, it’s vital to conduct a local market analysis to compare your rate with other bookkeepers in your area, especially those with similar experience and service offerings. Websites like LinkedIn or local business groups can provide insights into prevailing industry rates.
2. Value Proposition: Consider how your combined experience (7+ years) and the services you offer (reconciliation, payroll, AP/AR, GST/PST) compare to your competitors. If you offer unique services or exceptional expertise, you might justify a higher rate. Conversely, starting slightly lower can be strategic to attract more clients initially, with a planned price increase as you solidify your standing.
3. Profitability and Costs: Ensure your rate sufficiently covers your costs and provides a buffer for profit. Factor in overhead expenses like software subscriptions, office supplies, and potential marketing efforts. It’s essential that your rate not only sustains the business but also contributes to growth.
Partnership Dynamics:
1. Client Allocation and Earnings: Your decision to keep billable hours allocated to the partner who sources the client seems fair and incentivizes proactive client acquisition. Just ensure clear terms are established so both partners understand expectations and contributions.
2. Communicate Regularly: Schedule regular meetings to discuss financial goals, client feedback, and workload. This transparency will help prevent misunderstandings and ensure both partners are aligned with the business direction.
3. Document Processes: As your client base grows, having documented processes for client onboarding, task performance, and communication will streamline operations and enable consistent service delivery despite which partner serves the client.
Additional Advice:
- Consider Value-Based Pricing: While hourly rates are straightforward, consider eventually transitioning some services to value-based pricing. This can appeal to clients looking for specific outcomes and allows you to benefit from efficiencies without being tied strictly to time spent.
- Network and Continual Learning: Join local and online Bookkeeping networks and organizations like the Canadian Bookkeepers Association. Continuous learning
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