Bookkeeping is a management service that includes keeping general services records, day-to-day records, and outline of schedule all accounting to detailed records. Hence, the name bookkeeper – a person that performs bookkeeping. Bookkeeping allows you to focus on your business while the mandatory tasks are being taken care of – for example, finances; you would not have to bother sending invoices immediately to your customers; the bookkeeper handles!
Bookkeeping helps you in the organization and adequately management of your daily accounting tasks on one screen. Some of the actions that involved bookkeeping are payment of bills, check writing, invoices, inventories management, reports creation, income recording, payroll processing, and credit card processing. In short, it is the duty of a freelancer bookkeeper to provide all the necessary tools to complete the tasks.
Duties of a freelancer bookkeeper:
- Finance management: freelancer manages all the finances of their clients using the act of bookkeeping. The evidence that qualifies proper bookkeeping is an accurate track record of revenue and expenditure, dates of sales and stocking, profits and losses, among others. A freelancer bookkeeper may also send invoices to customers immediately and provides significant insights into their business management. Bookkeeping brings the business owner and freelancer accounter! Your business deserves a smart and quick accounting system; that’s what the bookkeeper is offering you!
- Outsourced Accounting: even though he is in charge of the accounting part of your business, you can have access to the systematic analysis and reports provided. He ensures that he professionally does your accounting. While outsourcing your accounting, Make sure you get an updated Balance Sheet & Income Statements monthly. Remember, you can have access to these reports at your convenience!
- Effective Management: the team at Bookkeeper are effective managers who can handle all your tasks and ensure your bills are paid, checks issued, invoices sent out, and payroll at the appropriate time. You also get valuable information concerning your business—bookkeeper process improvement and all other financial activities that require immediate action. With a bookkeeper, you always have the final say!
A bookkeeper’s responsibility is to maintain the on-goings in a clients’ general ledgers. In addition, a bookkeeper provides the following:
- Daily compilation of data
- Categorization of expenses in the public ledger
- Accurate reviews of public ledger
- Reconciliation of bank statements against the general ledger
- Generation of financial statements
The primary user of a bookkeeper is the Accountant. The Bookkeeper provides an updated and maintained general ledger, which will enable the account to provide accurate advisory services like:
- Analyzing the company’s financial data
- Preparing income tax returns
- Providing tax planning advice
Even if you have multiple businesses, a bookkeeper was specially developed to handle all accounting and bookkeeping services for more than one business. Bookkeepers can maintain the books for each business and provide over-roll insight into your business financial performance at your desired intervals.
Bookkeepers contain no complex accounting terms you can’t understand; easily maintain all your accounting books as you do not need any past accounting or bookkeeping knowledge.
Bookkeeper is perfect for manufacturers, small, medium, and micro-businesses—no dependency on any software and seamless data syncing among all your devices.
How to bill for bookkeeping?
Bookkeepers’ rates largely depend on the size of the business and the services offered. But usually, Bookkeeper has two main ways of billing, that is:
The Hourly rate: Here, charges are made per hour at a certain amount. This rate may differ every hour depending on the task at hand. Hourly rate means payments are made for only the hour’s Bookkeeper is used. The agreed amount is paid before every hour and immediate disconnection of the service once the hour elapses.
Monthly/fixed rates: There is an agreement, and payments are made at the end of every month regardless of the task performed within the month; the price remains the same. This way, a certain amount is paid monthly, and the Bookkeeper provides specific services. These rates are typically fixed and cannot be changed but only upgraded to an annual rate.
Annual rates: This is similar to the Monthly rates, just that instead of paying for a single month, the user pays for 12 months at a time. It will enable unlimited access to bookkeepers for 12 months with other benefits. This method usually comes with discounts or unique gifts.
The best billing method is determined by the level of service required. The hourly rate will work best if you are a small business whose finances can easily be managed on paper. That way, you can get access to the Bookkeeper and use it on a short-term basis. Moreso, if your business is either medium or large and your finances challenging to handle, you need the monthly rates to use a bookkeeper for long hours and pay at the end of the month. Lastly, the annual rates provide months of interrupted services with 10% discounts.
How to invoice for bookkeeping?
In every business, not minding the size or industry, the invoice is vital. An invoice is an official document used to request for payment of services provided. Just like any professional service, bookkeeping needs invoicing.
To create an invoice, you can use one of the two main methods.
- Using invoicing software: An Invoice software is also known as accounting software that generates invoices that contain unique brands of your service and is usually connected to your bank account to facilitate payments (although this attracts extra charges from the bank). As a regular sender of invoices, this method can be automated and save you time, energy and resources.
- Design your own as a shareable PDF: Or you can decide to create your bookkeeping service invoices with a Word document, spreadsheet, or any online downloadable template. If you are new to bookkeeping invoice creation, there are tons of free templates online which can easily be downloaded and saved for future usage. These templates can also be readily converted to professional pdf and sent out as read-only formats.
The formats for invoice varies as a result of the business type and services that are provided. But certain items must be on every invoice. They include:
- Full company name and contact details
- Full client name and contact details
- Date and number of invoice
- Date of services rendered
- Duration of the service (hourly, monthly, or annually)
- Extra charges (for tax and other fees) and discounts as applicable
- The total amount and due date
- Payment methods (Available)
- Terms or additional vital information
- Ensure that all details are written clearly. Also, keep a signed copy for future reference.
How much to bill for bookkeeping?
An hourly fee is the most typical and traditional form of billing for bookkeeping. The Bookkeeper will keep note of the time they spend on your firm in 0.1-hour increments, sum it up, and apply their hourly charge-out rate, and there’s your bill! It implies that whenever your Bookkeeper answers the phone, responds to your email, or works on your file in any way, you are on the clock.
There are a variety of hourly rates available at current market rates. Accounting work completed by a CPA ranges from $150/hr to $450/hr. Bookkeepers charge between $25 and $90 per hour. It means that the cost of the services will vary based on how long your Bookkeeper or Accountant took to perform them. Based on current market rates, the total cost of services is anticipated to fall within the following ranges:
- $100 to $400 per month for a bookkeeping startup business
- $400 to $600 per month for a small business
- $600 to $2,000 per month for a medium-sized business
- $2,000+ per month for a large business
Even though the majority of freelance bookkeepers still charge their clients by the hour. The flat-rate system is gaining in popularity.
If you’re a new freelancer, you’ll have to stick to the status quo and charge your clients by the hour. It will assist you; keep things simple when you determine what services you want to provide your clientele. Several things influence the amount you can charge your clients.
A Variety of Factors influences freelance Bookkeeper Rates. Whether you offer consumers an hourly rate or a flat price, six essential elements will influence how much you charge for your services: your geographic area, degree of education, certifications held, years of experience, types of services provided, and duration of the client relationship.
According to a poll conducted by Zip Recruiter, the national average rate for a freelance bookkeeper is $23 per hour. However, rates vary by state. You might think that states like Nevada, Montana, North Dakota, Wyoming, and Idaho would have a lower average than California. However, the average hourly rate nationally for a freelance bookkeeper in these five states is $19.47, compared to $19.93 in California, a difference of only 46 cents per hour.
Example Hourly Rates for a Freelance Bookkeeper
- $21.25 hourly rate in California
- $17.72 per hour in Texas
- $16.77 per hour in Illinois
- $15.60 per hour in Florida
The five states in the table above are the most populous in the country. The remaining 45 states and the District of Columbia have a collective hourly rate of $18.47, ranging from $16.62 to $21.14 per hour.
Your Educational Background
While bookkeepers who work for a company may be able to secure a job with just a high school diploma, it’s unlikely that you’ll be able to get clients as a freelance bookkeeper without a degree, bookkeeper certification, or work experience.
Your best bet is looking for an entry-level position as a bookkeeper to get the necessary expertise.
Your Certifications as a Bookkeeper
The American Institute Professional Bookkeepers (AIPB), the National Association of Certified Public Bookkeepers (CPB), and the QuickBooks ProAdvisor certification are the three types of certificates we suggest for bookkeepers. Thousands of bookkeepers have finished one or more of these programs (including self-study), boosting their earning potential and putting their resumes ahead of the competition.
The quantity of experience you have, the types of services you provide, and the length of the client connection is all essential aspects.
Billing in bookkeeping becomes more evident as you progress.