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How much should I pay a good bookkeeper(9 Posts)
Not sure if this is the right topic but maybe someone would be able to give me some ideas.
So far I’ve dealt with bookkeeping by relying on my accountants firm and doing a fair bit myself. They don’t charge by the hour, we have an agreement which covers certain work to be completed at certain stages so it’s more like an annual tailored package which works great.
I am considering finding a freelance bookkeeper to do everything I currently do (basic stuff like recording all spending, issue invoices, check and record supplier invoices, that sort of stuff using a cloud based accounting package - I guess they are all popular and pretty similar so a competent bookkeeper should be familiar with it) and maybe some if the things the accountants do so that everything is kept up to date and accurate and the accountants just have to check VAT returns and do annual accounts and the other more intricate work.
I have some good recommendations from friends I trust (as people and with good business heads on their shoulders). The hourly rates appear to be somewhere between £15 and £18/h.
I have no idea what the market rates are and want a reliable, professional service but, obviously, don’t want to pay over the odds. At the back of my mind, I know I would consider a rate increase for anyone doing a sterling job for me if we end up having a very good work relationship and I can rely on them to get on with the job to a very high standard.
I’d rather consider finding someone through direct personal recommendation as opposed to using a recruitment agency or some approved list of providers. Hence this benchmark.
Any thoughts on pricing anyone please?
I guess they are all popular and pretty similar so a competent bookkeeper should be familiar with it
Never make assumptions. What online software are you talking about? A LOT of book-keepers have very little experience of the relatively recent cloud innovations like Xero, Quickbooks, etc. Lots of book-keepers use dinosaur software like desktop Sage or even spreadsheets.
I have one client using Xero who's gone through no fewer than 5 "reputable/experienced" book-keepers who just hadn't a clue. Those 5 weren't from shop window or facebook adverts, they were so-called professional book-keepers, some were members of the AAT and ICB, with their own websites, etc. When you scratch the surface, they talked the talk about online/cloud software but didn't actually use it that much, if at all. The client in question was tech-savvy and used Xero because of the integration with other online systems, such as his bank, online retail platforms, credit card processing, etc. None of the 5 book-keepers could handle any of that - they wanted the client to "teach" them how it all worked. The client in question has now decided to just carry on doing it himself.
The thing with book-keepers is that Cloud/Online subscriptions are expensive, cloud/online data entry usually takes longer. So, book-keepers are more likely (historically) to take your paperwork and process it on their own system. Most have "multi-company" desktop software where they don't pay any more for more companies. Some of the desktop software is incredibly quick/easy to use. In my practice, we use VT for book-keeping. It's a single annual fee regardless of number of firms. It's quick and easy for data entry, incredibly quick/easy to correct, etc. That's why book-keepers tend not to use online/cloud systems which are usually slower and more costly and why they often have little experience/ability with the cloud/online systems that a business owner would use.
So as I said at the beginning, make no assumptions. Check thoroughly that they know all the ins and outs of whatever cloud/online system that you're using. Last thing you want is them making loads of errors that are going to mean your accountant takes longer at the year end to prepare the accounts/returns meaning far higher accountancy fees to sort out the mistakes!
Sorry, forget re the fees. I think £15-£18 per hour is on the cheap side as you want someone better than a basic data entry clerk if you're wanting them to prepare sales invoices, and presumably do debt control, etc. Depends on the area of course. If you're in a run down Northern town then maybe that price range would get you someone good, but if you're in London or any other expensive area, then I'd suggest more like £25 per hour.
Kazzyhoward thank you very, very much for your in-depth answer. It is very useful.
I use Xero but didn’t think to ask my friends what their setup is. They might be on other systems.
There are a couple of local offices I visit regularly with independent firms where most of them use Xero and some Quickbooks. They’re probably the ones to ask for first hand recommendations. Yes, it is an affluent area so I will be realistic and assume the person I need has a higher rate as I definitely want to trust they can take care of everything without much hand holding.
Your advice is so helpful, and such an eye opener!
I might even ask my accountants firm if they can recommend someone.
It’s one of the many New Year decisions that I need to get sorted!
I think in Xero you can find recommended practitioners. Whereabouts are you? I work for a bookkeeping practice which offers what you are looking for, though am fairly junior so don't know the pricing...!
Thank you very much Mandate, I did explore that avenue but there’s only one particular person that caught my eye and have used her services in the past with setting up various things and figuring out some workarounds, what I need is not something she’d do as it’s a bit too simplistic for her services and I remember her bill was substantial. I’d only consider someone directly reccomended by someone I know personally.
I’ve given myself until March to source someone. There’s still a bit of time.
I think in Xero you can find recommended practitioners.
They're not "recommendations" - they're just people and firms who've joined their book-keeper/accountant programs. To become "xero certified" all you have to do is complete an online course that takes a couple of hours - I did it having never used Xero before - if you get a question wrong, you just go back and choose a different answer, so it's certainly not a test of your skills/abilities!
Same with other online systems such as Quickbooks (which is a day long course you can't fail) and Freeagent - another online multiple choice "exam" you can take as often as necessary to get a pass mark.
So, basically, not really worth anything. Best to get recommendations and vet them yourself.
Thank you for your input user1497207191. I admit I was not aware of that. It’s very useful information. The lady I used (must be 5 years ago) was listed there but was also working with my accountants I had at the time so when I looked on the list of people by region and profile she did stand out. I was lucky.
I charge £20ph and I'm cheap for my area (south east but not london). I offer services for Xero, Quickbooks and Sage. I only charge that because I'm only AAT qualified and feel like I should be more qualified to charge more, although I am probably qualified enough in experience!
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