What should my Bookkeeper Charge?

As a bookkeeping company owner in the UK, determining how much to charge can be a daunting task. As a customer, it can be a minefield with a huge variety of fees, pricing structures, and plans available. In this post, we'll delve into the intricacies of bookkeeping rates in the UK, exploring different pricing models and suggested charges for specific services.

Understanding Bookkeeping Rates

Hourly Rates:

Hourly rates are a common pricing model for bookkeeping services, offering flexibility and transparency for both clients and service providers. The average hourly rate for bookkeepers in the UK typically ranges from £20 to £50 per hour, depending on factors such as experience, location, and the complexity of the work involved. Experienced bookkeepers with specialised skills may command higher rates, while those just starting out may charge at the lower end of the spectrum.

An hourly rate offers huge advantages in terms of transparency and value for money but means a differing bill every month.

Fixed Fees:

Alternatively, some bookkeeping companies opt for fixed fees based on the scope of work agreed upon with the client. Fixed fees provide predictability for clients and allow bookkeepers to budget their time and resources more effectively. When determining fixed fees, bookkeepers should consider factors such as the volume of transactions, frequency of services, and the level of expertise required.

Fixed fees offer certainty and consistency allowing a business owner to better plan their expenditure, however, there is often little clarity on value for money.

Value-Based Pricing:

Value-based pricing takes into account the perceived value of the services provided to the client rather than just the time spent on the work. This pricing model allows bookkeepers to charge based on the benefits and outcomes delivered to the client, rather than solely on hours worked. Value-based pricing can be particularly advantageous for bookkeepers who offer specialised services or strategic financial advice that significantly impacts their clients' businesses. This is often used for jobs such as Payroll and Tax Returns

Value-based pricing is great for special projects and one-off jobs,

Suggested Charges for Specific Services

All fees are assumed to be plus VAT

Basic Bookkeeping:

For routine bookkeeping tasks such as data entry, bank reconciliation, and invoice management, hourly rates typically range from £20 to £35 per hour. Fixed fees for basic bookkeeping services may range from £100 to £500 per month, depending on the volume of transactions and the level of support required.

VAT Returns:

Preparing and submitting VAT returns is a critical aspect of bookkeeping for many businesses. Hourly rates for VAT return services typically range from £30 to £50 per hour, with fixed fees ranging from £150 to £500 per quarter, depending on the complexity of the returns and the number of transactions involved.

Payroll Processing:

Managing payroll can be time-consuming and complex, making it a valuable service for many businesses. Hourly rates for payroll processing services typically range from £25 to £40 per hour, with fixed fees ranging from £50 to £500 per month, depending on the number of employees and the level of support required.

Management Accounts:

Preparing management accounts and financial reports can provide valuable insights for business owners. Hourly rates for management accounts services typically range from £30 to £50 per hour, with fixed fees ranging from £200 to £1000 per month, depending on the frequency of reporting and the level of analysis required.

Conclusion

Whether you are a Bookkeeper or Business Owner, it is important to do your research to make sure you are offering great value or getting the services your business requires at a fair price. By understanding the different pricing options available, comparing rates, and delivering exceptional value to clients, bookkeeping companies and their customers can have a transparent and longstanding working relationship.

Before committing to a working relationship, remember to meet with your bookkeeper/client face-to-face or virtually and make sure that at whatever the price, you can have a great working relationship.

For further reading on the topic, you may find the following resources helpful:

• The Institute of Certified Bookkeepers (ICB)

• Association of Accounting Technicians (AAT)

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• Chartered Institute of Management Accountants (CIMA)