Are you ripping yourself off?

One of questions I get asked most often is ‘How do I come up with a fixed price?’  When a bookkeeper, like yourself, stops selling their time and start selling their expertise this is the biggest hurdle they will face.  How do you remain competitive and avoid working for nothing.

One of the easiest ways to devise a fixed price, while still retaining the link to time, is to work out how long it takes you, on average, to deal with a client’s transaction.  You should include in this calculation the time taken to:

Organise the transaction Input it into your system File it Ask the client any questions relating to it

Obviously you won’t be asking the client questions about every transaction, so a nice average time in here is fine.  Once you know how long the average transaction takes you’ll be able to work out your fixed price and compare it easily to an hourly rate equivalent.

Remember to add into your fees extras like reconciling a bank account or credit card.

Due to the seasonal nature of most businesses some months will take you longer than others.  The work will generally balance itself out over the course of the year.  You should, however, be on the lookout for ‘scope creep’ where the client tries to pass more and more paperwork each month and gradually move away from the agreed number of transactions.  Don’t be afraid to revisit the price you gave them.  I would suggest that over 10% increase in each of 3 consecutive months is evidence of scope creep.

Get your prices right and you could move from charging £15 per hour to an hourly rate equivalent of £30-£40.  This is the true power of fixed fees!