In the first few years of growing my bookkeeping business I was undercharging. When I started working with Peter Cook we had a meeting each year, about this time, to agree on how much I was going to increase my prices from July 1st. It was agonising. For a number of years I had to put up my prices $10 an hour. I was afraid some clients might leave and, for those who chose to stay, I was worried that they just couldn’t afford the rate and I felt sorry for them.
Pete helped me understand my value proposition. I began to realise I wasn’t “just a bookkeeper”, I was empowering clients around their finances. I was an integral part of their team, giving them reliable information which would help their business grow. That realisation gave me the courage I needed. The interesting thing was that I didn’t lose one client. All that agonising for nothing!
I’ve spoken to several bookkeepers recently who were charging less than the Australian average (currently $48 per hour ex GST). I explained that it was impossible to grow a profitable bookkeeping business at that rate because they would struggle to attract great bookkeepers. The issue of undercharging is common in the bookkeeping industry.
If you’re not charging in the top quartile (i.e. more than $65 per hour) then July 1st is the perfect time to put up your prices:
- Work out what clients you can afford to lose
- Send out an email outlining the reasons for the price increase (BAS Agent legislation, PI Insurance, increased costs) and the benefits of your services
- Have marketing strategies in place to compensate for any lost clients
And if you’re a PB licensee, then use the draft letter that’s included in the PBS/Admin Templates/03 Finance to advise your clients of the increase.
Article by Debbie Roberts
