Starting your own business is an exciting prospect, especially when it’s a type of business that is always in need. Every company needs bookkeeping, regardless of the economic climate. To start a bookkeeping business, you must determine how much to charge for bookkeeping and related accounting services. Settling on the right amount to charge is a balancing act that needs to consider several factors, so keep reading, and we’ll walk you through the decision process.
Factors Influencing Freelance Bookkeeper Rates
The rates you can charge for bookkeeping services depend on several factors and may change over time as you become more established in your practice. The amount and type of experience you have, your educational background, and any relevant certifications help support a higher hourly rate. You might also gain specialized expertise with a particular business or industry, which allows you to charge more for your additional expertise.
Keep in mind that the type of clientele that you choose also matters. Small business owners with few employees will likely require much less work than more established companies with diverse product offerings and many employees. You can also charge clients differently for various services, which will affect how much you can make. You can set an introductory rate for basic bookkeeping, while other services such as tax preparation, financial analysis, and preparing budgets may warrant a higher rate or add-on charge.
What’s Your Background?
If you decide to become a bookkeeper, it is helpful to have some formal training or earn a certification. This education helps establish your credibility with potential and existing clients and helps you excel in your job because of the knowledge you acquire. You don’t necessarily need years of experience or a bachelor’s degree to get started, but some type of formal education is essential. Consider getting an accounting software qualification or certificates, such as Quickbooks Online or Quickbooks Proadvisor. If you want to work as a full-charge bookkeeper, you may need to have completed a bachelor’s degree in accounting or a similar subject.
You can also affiliate with established bookkeeping associations, like the National Association of Certified Public Bookkeepers (NACPB). This industry group offers the designation of Certified Public Bookkeeper (CPB). In-depth training that builds your knowledge of GAAP (generally accepted accounting principles) can land you publicly traded clients and longer or higher-paying jobs. Other organizations offer bookkeeping certifications, such as the Digital Bookkeeper Association or the American Institute of Professional Bookkeepers.
Most clients do not expect their bookkeeper to have an active Certified Public Accountant (CPA) license, but if you do, you should charge accordingly, especially if the services you provide require knowledge at the CPA level.
Choose Your Clients
The complexity of your bookkeeping work depends on the size and nature of your client company’s business. If you want to run your own business instead of working for bookkeeping firms, you will probably start with part-time work from clients like small businesses that do not require a full-time bookkeeper.
Larger companies may have subsidiaries, do business in multiple countries and require specialized reporting and other services. You would want to increase your rate accordingly for these types of clients. Conversely, smaller companies or those with a straightforward business model, such as a service-based business with one location and no inventory or other complexity, should be charged a lower rate.
Keep in mind that size alone doesn’t dictate the rate. Smaller companies can still be very complex and may require more services because they have a smaller in-house staff. However, companies with less than $500k annually might look for lower rates, while larger companies with over $1M in annual revenue can handle a higher fee structure. Consider the client’s location as another pricing factor. If the business operates in a large city, you may be able to command higher rates than you could in a suburban or rural business area.
How Bookkeepers Charge
Some clients need your services every month, while others might only need a one-time service or quarterly or annual work. The less often you see the client, the more work they might need you to do, so charge accordingly. Be mindful of this while considering how to structure your fees. Bookkeepers typically charge in the following ways, which can also differ depending on individual client needs:
- Hourly billing – Charging by the hour is the most common method
- Per bank account, number of financial transactions, or percentage of income – less common but could make sense in certain situations
- Fixed rate – often used for clients that have the same workload each month, but start with hourly until you have a good feel for the recurring workload
Regardless of how you decide to charge for the basic ongoing services, determine how you will price for add-on services not covered in the original agreement or last-minute requests that require you to work over a holiday or weekend, for example.
Benchmark Your Rates
Compare your service offerings and rates to the local bookkeeper’s salary competition. You might need to charge slightly less than competitors when you start building your clientele. As you gain more clients, add more services, and develop specific niche expertise, you can raise your rates over time.
Know the average bookkeeper salary [1] for your state to use as a starting point in deciding how to charge your clients.
| State | Salary (mean) | Hourly (mean) |
| Alaska | $48,640 | $23.39 |
| Connecticut | $47,890 | $23.02 |
| California | $47,750 | $22.96 |
| Massachusetts | $47,020 | $22.61 |
| New Jersey | $46,860 | $22.53 |
| Washington | $45,600 | $21.92 |
| New York | $45,590 | $21.92 |
| Maryland | $45,450 | $21.85 |
| Delaware | $44,760 | $21.52 |
| Minnesota | $44,210 | $21.25 |
| Rhode Island | $44,120 | $21.21 |
| Virginia | $43,140 | $20.74 |
| Colorado | $42,830 | $20.59 |
| Illinois | $42,520 | $20.44 |
| Vermont | $42,320 | $20.35 |
| New Hampshire | $42,170 | $20.27 |
| Oregon | $41,840 | $20.11 |
| Hawaii | $41,620 | $20.01 |
| Texas | $41,390 | $19.90 |
| Arizona | $40,930 | $19.68 |
| Pennsylvania | $40,660 | $19.55 |
| Tennessee | $40,380 | $19.41 |
| Georgia | $40,330 | $19.39 |
| Florida | $40,220 | $19.34 |
| Nevada | $40,100 | $19.28 |
| Ohio | $39,830 | $19.15 |
| North Carolina | $39,590 | $19.03 |
| Maine | $39,190 | $18.84 |
| Utah | $39,170 | $18.83 |
| Michigan | $39,130 | $18.81 |
| Oklahoma | $39,010 | $18.76 |
| Iowa | $38,900 | $18.70 |
| Wyoming | $38,870 | $18.69 |
| Idaho | $38,470 | $18.50 |
| Missouri | $38,340 | $18.43 |
| Indiana | $38,300 | $18.41 |
| North Dakota | $38,220 | $18.38 |
| Mississippi | $38,130 | $18.33 |
| Kentucky | $37,950 | $18.25 |
| Wisconsin | $37,910 | $18.23 |
| Nebraska | $37,850 | $18.20 |
| New Mexico | $37,600 | $18.08 |
| Alabama | $37,250 | $17.91 |
| Louisiana | $37,180 | $17.88 |
| South Carolina | $36,860 | $17.72 |
| Arkansas | $36,310 | $17.46 |
| Montana | $36,310 | $17.46 |
| Kansas | $35,880 | $17.25 |
| West Virginia | $34,550 | $16.61 |
| South Dakota | $33,970 | $16.33 |
Define the Scope of Your Services
Deciding how much to charge for your bookkeeping services is only part of the equation. You will also need to precisely define what you will provide in exchange for the price charged. Generally speaking, a bookkeeper records a company’s day-to-day financial transactions, while a full-charge bookkeeper acts in a managerial role, having oversight and responsibility for the company’s entire accounting cycle and financial records.
Depending on the size of the business client and your background and expertise, you could strictly process daily transactions and do bank reconciling. For smaller clients, you might be involved in some accounting activities, such as running payroll, invoicing, producing monthly financial statements, providing data for an audit, and problem-solving for any accounting issues that crop up. Some bookkeepers may also prepare their client’s tax returns and send them to a CPA for a final review.
Define a package or packages that clearly define what services you will provide for your clients. You could have a basic level of service that comes with a fixed fee, such as weekly journal entries and monthly bank reconciliations. Any add-on services, such as ad-hoc requests, could involve an extra charge or be charged hourly.
The dangers of not defining your work scope upfront can result in you giving your client additional work you do not get paid for. Clear communication avoids issues when you’re dealing with a fixed-fee client. It must be clear that extra work will be invoiced separately and isn’t included in the base contract.
Frequently asked Questions (FAQs)
What is the hourly rate for a QuickBooks bookkeeper?
A bookkeeper certified in Intuit Quickbooks charges roughly the same as a regular bookkeeper since the software use is extremely common, especially for smaller companies. According to Payscale.com, the average Quickbooks bookkeeper pay in the U.S. for 2022 is $45,290 annually. This salary equates to an average hourly rate of $21.77 (based on 2,080 hours per year).
What is the hourly rate for non-QuickBooks certified remote bookkeeping services?
You can expect to pay the same for a non-Quickbooks-certified bookkeeper. While shopping for a bookkeeper that works remotely, consider whether you need a dedicated contact person for your account and if it matters whether the staff working on your books resides in the U.S.
Some remote bookkeeping companies offer low rates by assigning your work to a pool of bookkeepers or using outsourced bookkeeping providers in other countries.
A remote or virtual bookkeeping service will most likely cost less than in-house bookkeeper due to the absence of overhead and travel costs to your business, among other factors.
What is Typically included in bookkeeping services?
Bookkeeping starts with the basic service of entering revenue and expense transactions into your company’s general ledger. The cost will increase as a business requires more accounting services, such as closing the books each month, adjusting journal entries, producing financial reports, preparing budgets and forecasts, and preparing tax returns. If a business needs several additional services, it might require a full-charge bookkeeper or an accountant instead of basic bookkeeping services.