rates of pay

Bookkeeping Rates of Pay: What You Need to Know

Have you ever considered how rates of pay can impact your relationship with your bookkeeper?

Traditionally, bookkeepers (not to mention many, many other contract professions) have charged an hourly rate of pay. This is why most conversations about project costs and estimates begin with the question, “What’s your hourly rate?”

However, an hourly fee structure is no guarantee that you’re getting the best value or the best service. At Legacy Advantage, we advocate a flat fee over an hourly rate. Considering rates of pay when choosing a bookkeeper can save you time, money, and provides relational opportunities. Here’s why:

Hourly Rates of Pay Encourage the Bookkeeper to Take their Time

The math here is pretty simple. The more hours your bookkeeper works, the more he/she gets paid. Unfortunately, this can make bookkeepers resistant to adopting new technologies or innovations that would speed their work because reducing hours means reducing income. Why innovate when slow and tedious means more income?

Flat Rates of Pay Encourage Bookkeepers to Work Faster

To set a flat fee that accounts for all of the work involved, the bookkeeper must conduct a lengthy discovery process with you, the client, in order to clarify the scope of the engagement. This will actually encourage the bookkeeper to innovate, because the more efficiently he/she can complete the file, the more he/she earns per hour. You still win, because a clearly defined scope and an efficiently managed process result in less admin work for your staff.

Considering rates of pay can save you time, money, and provides relational opportunities. Click To Tweet

The Client Assumes All of the Risk When Paying Hourly

If there are errors in the work that’s been done, the bookkeeper will charge you for the additional time it takes to fix those errors. If you have a question about the process, the time it takes to answer your question will also be billed to you. This turns the relationship between you and your bookkeeper into a purely transactional one that will discourage you from being more actively engaged with the work your bookkeeper is doing.

The Bookkeeper Assumes All of the Risk When Paying a Flat Fee

Under a flat fee structure, the bookkeeper will take as much time as necessary to fix errors in the work. That time is on them, and the more time spent correcting errors, the less they end up getting paid per hour. This incentivizes your bookkeeper to get it right the first time. You, as the client, are also free to ask questions without incurring additional fees, which results in a much better relationship between you and your bookkeeper.

 

Interested in hiring Legacy Advantage to help with your business bookkeeper? Get a quote today!

 

About Bob Wang

Bob is the owner and founder of Legacy Advantage. He holds a CPA and has experience at a private client services brand, Big 4. Bob's passionate about empowering organizations through quality bookkeeping services.
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