Ok, so I’m an accountant (FCA for those who are interested – you’re not? – didn’t think so). I am also a bookkeeper, or should I say I do bookkeeping for a number of clients.
When I price accounts and tax work for a client I always base it on how long I think it will take, use a cost per hour – £60 at the moment, put in a little extra for support through the year and a contingency and there I have it - a fixed price, paid in monthly instalments nice and easy. This works pretty well for accountancy not so well for bookkeeping.
The trouble is £60 an hour for bookkeeping work seems to me to be a bit excessive. Yes big local firms may charge their staff out at that rate but I don’t think I can really justify that as an hourly rate.
Ok, so I wouldn’t go to a client’s office to do bookkeeping (I use subcontractors for this and charge them out at £175 a day). I do bookkeeping from the comfort of my own office – some on VT and now Clear Books, but mostly on Xero.
The hourly return on bookkeeping is lower than the £60 I use for pricing accounts work – more like £40, so should I be worried about this?
I’ve come to the conclusion – NO.
I sometimes think I should charge more for bookkeeping, but then if I do the bookkeeping for a client then when it comes time to do the year end accounts a 15 hour job (where I didn’t do the bookkeeping) may only take me 8 hours .
That huge time saving more than makes up for the lower return on the bookkeeping work.
So thinking about it rationally, if I do the bookkeeping, I can produce the year end accounts quicker that if I didn’t. Giving me more time to take on more clients, do more work, earn higher fees and recover much more than the ‘lost’ income from doing the bookkeeping.
Does that make sense?!
I think so.
So yes, I’ll carry on with the bookkeeping.
I think those small practitioners who turn it away may be missing a trick.
About Kent accountant
Chartered Accountant based in Kent.
After leaving practice very soon after qualifying, swearing never to return, in 2011 I did exactly that.
Now a sole practitioner and loving it, business growing rapidly and looking forward to the future as my own boss.