There are a couple of common pricing models that bookkeepers use including fixed, hourly and transactional. All the models have positives but some of the models are more beneficial for the bookkeeper than the client.
Hourly pricing has been around forever and dominates many industries. I won’t take a deep dive into it as it’s such a common pricing methodology. For solo bookkeepers, this is definitely the go to. If there’s one commonality amongst bookkeepers it is there shared love of hourly billing. Especially when bookkeepers are starting out, it is hard to have a conception of how long tasks will take. Billing hourly poses less of a risk as the total price is usually a ballpark as opposed to a fixed price.
The biggest issue is that billing by the hour creates an adversarial relationship and tends to breakdown communication. When you know you’re being billed by the hour, your less likely to reach out with simple questions. And obviously, the more hours the job takes, the more money the bookkeeper makes.
Fixed pricing is the new cool kid on the block. There are a handful of online bookkeeping companies in Canada now and they all offer fixed pricing for the most most part. Although, it is generally not transparent. It is important to delineate between fixed pricing that’s transparent and fixed pricing that’s opaque as they are two completely different animals.
Fixed pricing with transparency is good because you know you’re not overpaying relative to other customers of the company or overpaying relative to the scope of your bookkeeping. On the other hand, the value provided by fixed pricing is relative to how much of the plan you utilize. Therefore, for some customers a fixed plan offers great value while to other customers the value is marginal.
Fixed pricing that is opaque is not an innovation but the same model that accountants have been using forever. The only real difference is the guarantee that the price is fixed. Traditionally, accounting prices are quoted but the total can fluctuate marginally.
Many firms offer a new spin in that they will pitch you three different plans. In reality though, all the plans will be profitable to the bookkeeping provider. The presence of options creates the illusion that there is a deal to be had. When pricing is opaque, your really have no idea if you’re getting a great deal relative to other companies or if you’re really overpaying.
Transactional pricing is common in industries with more commoditized offerings. The thing about bookkeeping though, is that it is transactional in nature. Bookkeepers literally record transactions. Whether the item is a invoice or a payroll payment or a receipt, it is a transaction.
Transactional pricing is ideal for clients because it offers them a myriad of options. They’re not slotted into a plan but get fixed pricing based on the needs of the company. The reason why you never see fixed pricing is because it’s a lot harder to pull of for a bookkeeper. If you don’t have enough experience then it’s really hard to value your base transactions.
What we do
We offer transparent transactional pricing because we believe it’s an awesome fit for clients. It’s not as simple a being slotted into a plan but it allows us to offer something that will be an ideal fit for your business. Using transactional pricing, allows us to offer the equivalent of 512 different fixed price plans. All our pricing is transparent, no tricks, no gimmicks. As always, we love comments and questions. If you have any please reach out on linkedin or via email.