How Much Should I Pay for a Bookkeeper? Redux

Almost two and a half years ago, I wrote a post called How Much Should You Pay For Bookkeeping? and it is consistently the most viewed post on this blog.  If I was a blogging genius, I couldn't have named it any better as traffic comes here from that very search term.  I am not a blogging genius - I am just a gal who likes to write and sometimes I indulge that need through this professional outlet.

Anyway, I thought I would come back to this subject today.  That post is longer than I thought and not everyone has that kind of time.  Unfortunately, even two and a half years later - the answer is no easier.  More goes into setting a billing rate than just trying to make as much money as possible.

For those who don't like to contemplate things like I do, here's the short answer:  You get what you pay for.  And sometimes, you pay too much for what you get.

For the rest of us, I am reminded of an illustrative conversation I just had with a client regarding maximum allowable rates on grant agreements.

The grantor will let them source out a deliverable as long the source does not exceed $X per hour.  And they will not allow you to pay a premium from another source over that amount.  My rate is over that amount.

So, like all good accounting consultants, I batted around a few ideas with the client on how to bill to this grant if I was going to help with this deliverable.

In the end, we decided not to do it.  And here is why:

1 - It isn't fair to my other clients.  I bill everyone the same.  It is always nice to get a deal, but it is never nice to be the one paying more - so it is better to be consistent.

2 - My billing rate is a stretch for most when they hire me.  And before too long, they know they are getting more than they even knew to expect.  This isn't hubris - often an organization is going from a bookkeeper to a full service accounting system and the change is valuable.

This client I was working with is still going to have me help with the deliverable, we just will put that part of the grant money towards the salary of the employee I will be working with.  She gets the value.

3 - My actual rate of pay works out to $10 less than $X.  Trust me, I do the math.

The reason I set my rate where I do is because I do aspects of bookkeeping (that you can get for $35 an hour) all the way up through CFO-ing (that would cost you $150 per hour, or more), so I am in a blended area between that.

I am also a CPA and I have extensive experience in one industry, both of which gives me a premium in the marketplace.  One thing I know to be true - if you bill too low, you are treated accordingly.  So, you have to pay attention to the marketplace.  (And if you don't think that is true - tell me, is there a price that you think is too little to pay for a hotel in New York City?  I mean really, if you get a hotel there for under $100, you know there are going to be bed bugs.)

And finally, I think I have a better working relationship with my clients because I don't bill for travel time, or for random phone calls (I want you to tell me that stuff is going to hell in a hand basket before it is too late), or even for a lot of quick e-mail exchanges.  And if I am only visiting a Board once a year, I don't charge for that either.

I don't even charge for random calls and e-mails from the auditor.  My clock really starts when I open Excel and start putting something together or when we spend an hour reviewing a tangible item.  Or when I walk in the door to work for you and only for you.

I could charge a lower rate and I could track all that stuff and I could spend two days putting together a monthly invoice and my client could spend two hours reviewing it and begrudgingly pay it and I would probably make more money, but life is too short for me to run my business that way.

I know how much I work.  And I do track a lot of that stuff that I mentioned above, even though I don't bill it and I know that my actual working rate comes out to $25 less per hour than I bill for my major clients.  And knowing all that, I know that my rate can't change for one strange grant request.

And my client, who is smart, knows that too.  (I try to only work with smart people.)

So when you are trying to figure out how much you are willing to pay for a bookkeeper, maybe some of the points I mention above should be in your consideration.  Billing rates are not really apples to apples and you should not take a number at straight face value.

Speaking of face value, since it is your finances - please meet them before hiring them to make sure you are not paying too much for what you are getting.