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Bookkeeping Rates by the Number of Bank Accounts  

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 Manjit
(@Manjit)
Joined: 8 months ago
Posts: 5
08/02/2020 12:26 pm  

Hi everyone,

I have noticed from other bookkeepers' web sites that lots of bookkeepers charge by the number of bank accounts, CC accounts and charge accounts. Needless to say, the rate varies for each bookkeeper.  have 2 questions.

1st question......how do you determine the number of transactions per statement if the prospect is not willing to show the statement at the time of proposal? Do any of you charge by the tier rate system for transactions? For example, if the statement has 10-100 transactions per month, then the rate will be X amount of dollars and so on? Is anyone willing to share their rates if you charge them bank account?

2nd question....do any of you charge by the number of transactions regardless of the number of bank and CC accounts the prospect has? Again, is anyone willing to share per transaction rate?

If it matters, I live in Potomac Falls, VA. It is part Washington DC metro area.

Any help will be appreciated.

Thanks in advance.

Manjit Sahai

 

 


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(@casey-4)
Joined: 12 months ago
Posts: 126
09/02/2020 10:49 pm  

I wouldn't charge by the number accounts.  you might have 10 accounts, with only 3 transactions each, or one account with 500 transactions....  You can charge hourly for 3 months, to get an average, then continue or work out a monthly Value added pricing table. 


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 Manjit
(@Manjit)
Joined: 8 months ago
Posts: 5
09/02/2020 10:58 pm  

Thanks a lot, Casey. I really appreciate it.


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(@njoki)
Joined: 12 months ago
Posts: 6
12/02/2020 4:15 pm  
Posted by: @Manjit

Hi everyone,

I have noticed from other bookkeepers' web sites that lots of bookkeepers charge by the number of bank accounts, CC accounts and charge accounts. Needless to say, the rate varies for each bookkeeper.  have 2 questions.

1st question......how do you determine the number of transactions per statement if the prospect is not willing to show the statement at the time of proposal? Do any of you charge by the tier rate system for transactions? For example, if the statement has 10-100 transactions per month, then the rate will be X amount of dollars and so on? Is anyone willing to share their rates if you charge them bank account?

2nd question....do any of you charge by the number of transactions regardless of the number of bank and CC accounts the prospect has? Again, is anyone willing to share per transaction rate?

If it matters, I live in Potomac Falls, VA. It is part Washington DC metro area.

Any help will be appreciated.

Thanks in advance.

Manjit Sahai

 

 

I am in the same predicament as well. I have a client who would not let me see his bank activity until we sign a contract. What Casey explained above is absolutely true. So what I decided to include in my contract is that the fee is based on "simple" bank rec activity and rates are subject to change based on the complexity of the work. That way, there is room to negotiate and amount changes. However, I also like Casey's approach of charging hourly for the first three months just to kinda get a feel for it, then you will know what to charge.


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(@casey-4)
Joined: 12 months ago
Posts: 126
12/02/2020 4:58 pm  

simply explain to your potential client, that you can NOT give a rate without seeing the BS accounts!  If they don't want to show you, you don't need them.  If you called a roofer to give you an estimate, and didn't give them any info, like square footage, or peaks and valleys of your roof, would you expect them to be able to give you an estimate?  Nope, they would have to come out and look at your roof, to give you an accurate estimate.  

Clients often don't understand some of the complexities of accounting.   they may think with only a few transactions in each statement, that it shouldn't take much.  What they don't see, is that if there is a ton of them, and lots of transfers between them, and co-mingling of funds that shouldn't be, that it can take extra time.  Sometimes clients just plain lie!

Don't estimate your roofing job, without the info!  There are plenty of clients who are willing to help you, help them!


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(@njoki)
Joined: 12 months ago
Posts: 6
12/02/2020 5:02 pm  

@casey-4

Thank you for giving that roofer example, never even crossed my mind. I am definitely going to change how I operate now.


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(@casey-4)
Joined: 12 months ago
Posts: 126
12/02/2020 7:08 pm  

Happy the roof example helped!

Keep in mind too, that often clients don't understand that liability accounts, loans, credit cards, line of credit, etc, are ALL BS accounts that have to re reconciled.  What if a client had one checking account, and 10 credit cards, 2 lines of credits, and a vehicle loan.....  You now have 13 accounts to reconcile, and they tell you they only have 1 bank account!  They often don't understand what needs to be done, and that is why they are contacting you for help!


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(@njoki)
Joined: 12 months ago
Posts: 6
12/02/2020 7:48 pm  

@casey-4 Yes,  I have a questionnaire where I ask how many bank accts they have, CC etc.

 


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 Manjit
(@Manjit)
Joined: 8 months ago
Posts: 5
03/03/2020 9:58 pm  

Njoki,

Do you mind sharing that questionnaire document with me?

Thanks in advance.


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(@jennafer)
Joined: 12 months ago
Posts: 25
26/06/2020 1:33 pm  

This topic is very informative. Thank you! 

I'm trying to find a simple client contract that I can use and modify. Does any one care to share or suggest a site I can find a good example? I'd really like a one-two page contract that encompasses all bookkeeping.

Also, if anyone is interested, I'm curious to know how people price their services on a fee base. I like Casey's suggestion of working hourly for a few months to get an idea and wondering is there any other formulas people use. 

I'm happy to share my basic contract if anyone is interested.

Thanks!!! 


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(@jennafer)
Joined: 12 months ago
Posts: 25
26/06/2020 1:52 pm  

I forgot another question, how do you handle collections? I have a client that wants me to get more involved with collections that I am comfortable. My client's customer disputes his work and/or hours billed and my client wants me to respond without even seeing a contract or understanding scope of the work being contracted.  I do not think it is my call to discount hours for my client's customer. 


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 Dennis Fazio
(@Dennis Fazio)
Joined: 3 months ago
Posts: 3
26/06/2020 2:35 pm  

Responding to several items in the thread:

Charging by the customer's financial configuration (number of accounts, etc.) would seem counterproductive, as there could then be a conflict of interest for you if you wanted to recommend a rearrangement/consolidation/partitioning of accounts for better work flow or visibility of financial condition. 

Starting with hourly billing is often recommended to get a scope of the effort needed. One huge variable that can affect your time needed is how easy/difficult the client is to work with. You won't know that without some history.

For a contract, there are several templates out there. I put mine together by consolidating the common parts of a few templates and using what I'd learned when I was working as a technology director and we hired contractors. Goal is to make it complete (get the important things in there), yet not too lengthy; brief is preferred. I use the terminology "Service Agreement" rather than "Contract". Though there really isn't any legal difference, it's a different less formal approach that makes it more like when you sign the paper to get your car fixed. Only one signature is needed, which makes it quicker and easier to execute. and sets the psychology that you are their service provider, not an ersatz employee.

A good structure for an agreement is to put anything having to do with services and pricing in an appendix with the main body just boilerplate general contract stuff which can include the term of engagement, early termination terms, and billing arrangements. Then you rarely need to touch the contract body much for different customers; just the appendix.  Get a logo and put that up in the header for a professional look.

You really need to understand a lot about the client's business, operations, and details of their financial infrastructure before you can take on the job. Even if starting with hourly billing where the risk is on the client, it could end up burning a lot of your time that you may not have available just then. So, you need to know what their business does and how, a bit about their industry environment and relationships, details on number of financial accounts, balances, do they have any automation set up to move money around or do online billing/payments, number of active customers and vendors, usual past and expected future transaction count, extent of reporting to the board and management needed, etc. etc. 

Finally, I would strongly avoid getting involved with a client's customers or vendors other than what is needed to do your accounting/bookkeeping work. It's up to the client to collect and pay their bills and settle service/sales/purchase disputes; you just do the mechanical execution part of that. You can fire off reminders from the software for overdue payments when requested or instructed, but whether or not the customer pays and when is the client's job. You're just the invisible conduit in the path.


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(@casey-4)
Joined: 12 months ago
Posts: 126
26/06/2020 2:37 pm  

Jennafer, Check your state's guide lines/rules for collections!  Many jurisdiction don't allow it, unless you are a collection agency, or an employee of the company.  As a contractor, i won't do it.  I will send reminder invoices and statements, but that is all i will do.  The client needs to do the negotiations, not you.


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(@jennafer)
Joined: 12 months ago
Posts: 25
26/06/2020 6:23 pm  

@casey-4, as always, you are so helpful. Did you see my original question/request? 

I'm trying to find a simple client contract that I can use and modify. Does any one care to share or suggest a site I can find a good example? I'd really like a one-two page contract that encompasses all bookkeeping.

Also, if anyone is interested, I'm curious to know how people price their services on a fee base. I like Casey's suggestion of working hourly for a few months to get an idea and wondering is there any other formulas people use. 

 

Thank you!!!! Happy Friday!


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(@casey-4)
Joined: 12 months ago
Posts: 126
27/06/2020 1:44 pm  

Hey Jennafer, I rarely use contracts and almost all my work is done hourly...with a few exceptions.  That said, that is why i didn't answer your questions above.  Just don't have good answers for you!


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