A big part of the success of a small business accounting service relationship is the ability to deliver high value to clients at a controlled cost. This pricing schedule is meant to communicate high value while establishing realistic minimum costs that we require.
Pre-engagement: the pricing requirement for all accounting services
The starting point of any proposed work is a confirmation that the estimate of the value of the project to you exceeds the estimated cost of the project to us. We will not propose, and you should not consider, projects that do not meet this basic pricing requirement.
Built-in cost control measures
Many aspects of our mostly virtual accounting practice are designed to keep costs lean and offer competitive price advantages over larger more traditional “bricks and mortar” firms. Our engagement agreement, for example contains many cost control features designed to let us deliver maximum value at the lowest cost. Pricing is important to success in the small business market. I use the same cost control strategies as recommended to my small business clients to maintain a low price, high value competitive advantage in my field. The savings are then passed on to clients in the form of lower pricing.
This high value competitive pricing strategy depends a few operational procedures:
- Written agreements help improve communication about the details of engagements and our expectations. I primarily use emailed engagement agreements and ask you to respond with “AGREED” before we begin work.
- Electronic payments made timely, usually in advance or our work or planned dates, to help reduce cost.
- Work scheduling to avoid last minute rush. Fees are higher before a tax filing deadline.
- Ongoing informal electronic communication to keep in touch while ‘on the go’ to supplement in-person and telephone sessions. I typically send weekly updates on active projects.
If you opt to avoid these cost control services then resulting fees will be higher.
No charge services
First consultations are offered without charge. The purpose if this is to get to know each other, gather information and build trust. This practice tends to result in more accurate pricing and better quality work. If I can answer a key question or solve a problem in this first consultation then I am happy to do so, and the service is still free.
Also, any other services that I may offer before an engagement agreement are provided without charge. So if I offer to do something and you haven’t agreed to pay for it, then that is a no-charge service. The charge starts when you accept an engagement agreement. Sometimes it takes us some time to see the details of how our engagement will work so some amount of no-fee work is anticipated.
Third party contracted services
I rely on the work product and services of others for many accounting engagements. My fee is typically based on a stated dollar amount (or a stated formula) for the successful completion of a contracted service based on an expectation that the demonstrated value or result of this service to you or your business. My fee includes the price of the contracted services. The value of the expected result to you must be higher than my expected cost in order for us to work on this basis. The fee is always agreed in advance in writing in an engagement agreement. I primarily use emailed engagement agreements.
When I am simply rebilling a service provided by another firm, the fee is typically 25% more than the original cost. More often, however, I integrate my work with this third party service and so the resulting price is blend of the third party cost and my fee.
Hourly rate for small business and nonprofit services outside of a fixed contracted price
Services are usually based on a contract price agreed in advance and not on an hourly rate. However it is often useful to know the hourly rate of billed labor for planning, comparison, or discussion purposes.
In a typical engagement agreement, a maximum of 25% of the total cost may be offered on an hourly basis to adjust for variables and unknown factors at the start of the work. The rest, usually 75% or more, is based on a fixed negotiated price. This is always available for negotiation.
Senior accountant / CPA / Controller for small businesses and nonprofit organizations
$160 per hour
Short project under an hour: $3 per minute
Trained and supervised bookkeeper
$45 per hour
Short projects under an hour: $1 per minute
Annual tax filing services
$220 per hour
Audits or reviews required by government, banks or investors
$200 per hour
In all service categories, higher rates apply during rush periods before tax filing deadlines, for overtime and work that must be scheduled during evenings and weekends.