Easily Earn £35+ per Hour as a Bookkeeper
Many bookkeepers are still charging less than £20 an hour, scared that they have clients who can't or won't pay their rates if they were to increase.
There's also a fear that increasing prices may alienate potential new clients and have them in search of more reasonable prices.
While this can be true for a small number of clients (normally those you wouldn't want in your practice) the majority are looking for better value rather than cheaper prices.
Here are 10 ways you can begin to get your earnings closer to £35+ per hour without necessarily increasing your headline prices.
1. Change HOW you price.
Asking clients for £35 per hour, or more, is difficult. It's a very hard sell. When we price by the hour we lose sight of what's important to the client, and we put a glass ceiling on our earnings.
Clients don't generally pay for the process, they pay for the results. Moving to a model that charges for results is a huge step in allowing us to get closer to that £35+ per hour mark.
The system we advocate at The Bookkeepers Alliance, and the system I've personally advocated for well over a decade is menu pricing. Offering clients a range of options and allowing them to chose the service that best suits their needs.
This is the biggest single step you can take to improve your earnings.
2. Be a specialist
Surprising as it may sound, closing in on a type of client can help you to improve your pricing situation. Think about services that you use in your own life. Are you prepared to pay more for a generalist or a specialist?
Cars are a great example of this. The dealer of your particular make of car is likely to be able to command rates significantly higher than the general repairer. The reasons might be that they are able to use special equipment only available to them, but in the main it's because people trust that if they specialise in a particular car, they have a far better understanding of the mechanics of it and the potential problems it's known for.
Medicine is another are where we see specialists as more valuable than general practitioners.
This follows on nicely from specialising. Create systems and processes that allow you to speed up the data entry and reporting.
When you specialise in a particular niche it's easy to setup systems that will service all of your clients rather than building a system for each.
The same is true of reporting where you can create one report that all your clients can use without vastly customising it.
Systemising doesn't always mean increasing software costs. Systems can be old school, offline processes.
4. Charge For Everything You Do
This seems fairly common sense, but many bookkeepers will either do tasks for clients and not charge for it, or put time in that they feel they cannot charge for because of a mistaken belief that they should have been able to do it quicker.
Changing how you price as per point 1 can help eliminate both of these provided that you scope out a job properly and are aware of the boundaries of your service.
Things like registering a client for VAT or PAYE are things I see many bookkeepers doing without charging.
5. Upsell and Cross Sell
Connected to the last point, if there's an additional service you offer that a client isn't using don't assume it's because they have made a rational decision. It could simply be that they don't know about it.
Make sure that you clearly identify regularly where there are opportunities to sell more services to existing clients. Or to move existing clients to new packages that are more suitable for their needs.
6. Collect Every Penny You're Owed
Allowing clients to take longer to pay than normal, or having clients end relationships with outstanding balances can put a huge dent in your earnings.
Charge clients before you begin their work, or for larger, one off projects, by staged payments at preagreed intervals.
Every penny outstanding is a real terms cost to your business.
Consider using automated payment systems that put you in control rather than standing orders or payments on receipt of invoices.
7. Don't Discount
While this feels like common sense, it's a trap many bookkeepers fall into. Myself included.
It's easy to discount prices to secure a new client, especially in the early years. We all have preconceived ideas of what clients may be able to afford, but these are generally misguided.
If a client asks for a discount or indicates that they may not be able to afford your service then, rather than discounting, have a look at the service and identify parts that they may be able to live without until they can afford them.
8. Review Prices Regularly
Some bookkeepers can go for many years without increasing their prices and then find themselves in the unenviable position of needing to increase vast amounts in a single year or risk falling behind in real terms.
This is especially important now, when inflation is high.
Increase your prices annually, even by a few pounds. Your clients expect that prices will go up over time.
9. Accept That You Can't Win Them All
The truth is that there will be some clients who won't pay for your services. There's no way to hide this fact. Lowering your fees to allow them into your practice is almost always a mistake.
You owe it to yourself, your family, and to the wider profession, to run your practice in a way that values your skills, experience and training.
A race to the bottom to mop up those clients looking to pay crazy rates benefits no one, least of all them. There will always be someone charging less, don't let that someone be you.
Be confident that you provide a quality service and charge appropriately for it.
10. Join The Bookkeepers Alliance
Being part of a body with the sole aim of helping you to improve your bookkeeping practice will pay dividends. Involving yourself in a community of some of the most progressive and forward thinking bookkeepers in the UK is a sure way to get the confidence, training and resources you need to take your business to the next level.