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Bookkeeping Fees: Difference Between Cost and price

Written by: John Stewart

Article Overview: belief that they can hunt around and find a bookkeeper charging a better rate and therefore make the assumption that by paying a lower rate for bookkeeping services they will save mone

Bookkeeping Fees: Difference Between Cost and price

When potential clients contact our bookkeeping service, they often ask us: “what is your hourly rate for bookkeeping?”

They then try to make a comparison by phoning up other bookkeeping services around the area in the belief that they can hunt around and find a bookkeeper charging a better rate and therefore make the assumption that by paying a lower rate for bookkeeping services they will save money.

On the surface, this may be a logical thought process. Mathematically, it ‘s a simple equation: The job takes “X” hours @ “defined rate” = Total Cost of bookkeeping services. Therefore by finding the lowest “defined rate” = You’ll lower the total cost of book-keeping.

However, there are a number of variables in this equation. How do you ascertain whether both bookkeepers will do the same amount in the allocated “x” hours? How do you know that the quality of work will be the same?

There may be a number of reasons why a bookkeeper is charging a lesser rate:

1) The bookkeeper needs the work

2) The book-keeper lacks experience / confidence

3) The bookkeeper does not know the true value of their service

4) The bookkeeper has lower overheads

The bookkeeping rate refers to the amount of money that consumers have to give up to acquire that bookkeeping service. Whereas the Cost refers to the amount paid to produce that service. The cost represents the sum of the value of the overheads - offices, labour, travel, experiences and expertise.

So when the client asks the hourly rate, do they really want to know how much the bookkeeping will cost? And if they focus on the COST, are they looking at bookkeeping fees being an expense or an investment into their business?

A bookkeeping expense could be the result of trying to save money on bookkeeping fees by engaging the cheapest bookkeeper, where as investing in a bookkeeping service that has expertise, experience, and higher fees may produce better results for your business and ultimately save you time and money overall.

When enquiring about bookkeeping in your local area, remember the difference between hourly rate, cost and price.

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  Bookkeeping: When Small Problems Become Big Headaches
  Outsource Accounting

Article Tags: bookeeping, bookkeeper, bookkeeper, bookkeeping services, fees, rates



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