How to Price Bookkeeping Services for Small, Medium, and Large Clients
What is the difference between small, medium, and large client accounts for bookkeepers? Let’s break down the different sizes to their revenue, employee numbers and other key metrics. Then we will compare this to the fixed-rate monthly pricing I charge for bookkeeping services along with the bookkeeping tasks I do for each one. My goal is to help you understand what these breakdowns look like for each client.
In general, I charge my smallest clients $250 a month, the mid-sized clients pay $500 a month, and my larger clients are billed at $1,000 a month. But, what exactly do each of these clients look like?
Note: I’m basing each of my examples on clients I work with, but to ensure I do not give out my clients’ exact personal information, I did tweak each of them slightly. This should still give you a good idea of what these clients look like.
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What is a Small Client?
To illustrate what a small client looks like, I’ll be using a preschool I do bookkeeping for that generates about $150k in revenue a year. This preschool employs six teachers and hosts about 100 students.
Working a maximum of five hours per month on this particular client’s books, and charging $250 a month, I’m making right around $50 an hour, which is in the ballpark of where I want to be.
Even though I’m giving you the hours it takes me with each of these clients, I don’t necessarily keep track of them. These are just estimates I’ve noticed over time. I work a maximum of five hours per month for this client, which means sometimes I get my job done in less time.
Occasionally, there’s a problem where I need to dig to find the solution, or my client has a special request I need to take care of, and in those cases, it will take me the full five hours. I like to calculate my rate based on my max time, but then I’m rewarded if I work quickly and efficiently.
Receipt management
With my small clients, I do all the regular bookkeeping tasks, such as hooking their banks up to QuickBooks Online, categorizing all their transactions, and reconciling at the end of the month. However, for this client, I also do receipt management, which is probably the most time-consuming task I do for this preschool.
A few years ago, they were giving me all their paper receipts, and I organized them, but I really disliked that system. I’ve been working as hard as possible to get them up and running on a digital system by emailing pictures of those receipts to QuickBooks and matching it from there.
RELATED: Paperless Bookkeeping: Help Your Clients Get Rid of Paper
Write checks
Another extra task that I do for this client is to write checks for this preschool, so I am a signer on the bank account. It’s unusual for the bookkeeper to be able to write and sign checks, but because it is such a small business, we have our duties divided a little bit differently than it may normally look.
The main types of checks I write are reimbursement checks if the teacher buys supplies with her own money, or certain vendors will send invoices, and I will write a check for those. I’m trying to help my client get away from that by training them to use their debit card to pay for vendors rather than having them invoice for a paper check.
Categorize income
The last task I do for the preschool is to categorize income, which doesn’t take all that long. Essentially, we get a lump sum of money, and we want to categorize it to see how much each class is making. This will show them which of the six classes is most profitable.
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Overall stats of a small client
Number of employees: 6
Gross revenue: $150k a year
How much time bookkeeping takes a month: 5 hours
Extra tasks for the client: Receipt management, write checks, categorize income
Fixed-rate I charge: $250 a month
RELATED DOWNLOAD: Client Calculator
What is a Medium Client?
To illustrate what a medium client looks like, I’ll be using a law firm I do bookkeeping for that generates about $800k in revenue a year. This firm has seven employees, which includes their attorneys and their general staff.
I work a maximum of 10 hours per month on this particular client’s books, and charge $500 a month, which still comes out to be roughly $50 an hour.
On top of the regular bookkeeping tasks of hooking their bank accounts up to QuickBooks Online, categorizing all their transactions, and reconciling at the end of the month, there are a few more tasks I help them out with.
Bill pay
One of the extra tasks I do for this law firm is their bill pay. You can use different programs to get electronic copies of their bills, or they can be emailed to you if there isn’t anything confidential on the bill. There’s also a program called Hubdoc that you could use.
I tried using bill.com with this particular client, but I actually didn’t really find it as helpful as I would have hoped. I often just use the bill pay directly through the bank with this client, as it’s relatively easy to do, and many banks will do that service for free.
Categorize income
Similar to the preschool, I categorize the firm’s income each month. I help them break down their income per lawyer who makes that income. This helps them track how much money each lawyer is making the company.
Payroll assistance
I do not offer full-service payroll as a bookkeeper, and I don’t do payroll in QuickBooks, but my clients have a payroll service they use.
For this client, I do some tallying of their hourly employee amounts and then note how much is deducted for their health insurance and retirement savings. All I need to do is fill out the spreadsheet, and then I send it off to the payroll department.
This task probably takes me a couple hours per month to complete. If you are doing anything with payroll, this will vary widely between each client.
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Overall stats of a medium client
Number of employees: 7
Gross revenue: $800k a year
How much time bookkeeping takes a month: 10 hours
Extra tasks for the client: Bill pay, categorize income, payroll assistance
Fixed-rate I charge: $500 a month
What is a Large Client?
To illustrate what a large client looks like, I’ll be using a physical therapist office I do bookkeeping for that generates about $1.2 million in revenue a year. This office employs 10 speech pathologists and general staff and circulates child clients who come in for their services.
I work a maximum of 20 hours per month on this particular client’s books and charge $1,000 a month.
Each month I perform the regular bookkeeping tasks of hooking their bank accounts up to QuickBooks Online, categorizing all their transactions, and reconciling for this office. Outside of that, I also do medical billing,
Medical Billing
The thing that takes the most time with this client is the invoicing. They have a system outside of QuickBooks that is HIPPA compliant, which are the rules in the United States that you need to follow if you keep any medical information about your patients.
They enter all their patient’s information into the HIPPA Compliant system, and this is sent to the patient’s insurance first. Usually, once it goes through the insurance, there is a left-over balance that I have to charge the patient.
I’m in charge of sending invoices out to their patients, so I look in the system how much we are supposed to be charging them. For example, the appointment may have cost $300, the insurance covered $200 of the charge, which leaves $100 as the patient’s responsibility.
I also collect payments through their payment processing system. Payments come in electronically, and when they come in, I apply it to the patient’s balance. I’m never in their physical office, so if someone pays in cash, the office has a system to make a cash deposit to their bank and then record it within the system so I know that it was taken care of.
Create 1099s
At the end of the year, during tax time, you need to send anyone who works for you as a contractor a special form called the 1099. Regular employees receive a W-2 in January showing their wages from the previous year. Contractors perform special services for companies and aren’t hired on as employees. I, for example, am a contractor as a bookkeeper.
I prepare the 1099 forms for this office. It’s nothing exciting, but it’s also not too difficult. This is just a special task I do once a year.
Overall stats of a large client
Number of employees: 10
Gross revenue: $1.2 million a year
How much time bookkeeping takes a month: 20 hours
Extra tasks for the client: Receipt management, write checks, categorize income
Fixed-rate I charge: $1,000 a month
What Should I Charge a New Client?
When you’re onboarding a client, you may not necessarily know how much time it will take you each month to do their books, as you need to know if they are a small, medium, or large company and what additional tasks they may need you to perform each month.
RELATED: New Client Questionaire Download
The Bookkeeper Launch program has a really detailed spreadsheet that goes into each task you may do for the client, how long it may take you, and how to determine what set amount you will charge for those tasks.
One way you can determine how much to charge is to tie each task to a dollar amount. When you’re first starting out, it’s hard to get a grasp on that, though, which is why I like to put it based on terms of approximate hours worked. Most likely, you already have an hourly rate in your mind that you’d like to be working at, and you likely did not get into bookkeeping to be making $10 an hour.
If you’re having trouble determining how much to charge a client, it’s perfectly fine to start out working with them at an hourly rate and moving to a fixed rate later on. At the beginning of your working relationship, there could be quite a bit of cleanup you have to do for the client’s books, and that can be time consuming. You’re also learning their business and don’t know exactly what tasks you will be doing. There can be multiple variants that play in the pricing factor.
After a few months of working at an hourly rate, you can send your client a proposal or contract, spelling out the tasks you will be doing and what the fixed monthly pricing will be moving forward.
Are there any specific ways you determine if your client fits into the small, medium, or large category? How do you structure your pricing based on the size of your client’s business?
Resources for finding bookkeeping clients:
(Free!) Bookkeeper Marketing Masterclass
Marketing Course: Bookkeeper Marketing Coach
