Haggling is good. Haggling can work. In some cultures an absence of haggling is considered rude, offensive (“you are not taking me seriously”). The challenge for accounting and bookkeeping professionals is that they don’t consider it as ‘professional.’ What could be more relevant to a bookkeeper or accountant than talking (a.k.a. haggling) about money?
So what are the golden rules for getting to a satisfactory price for your services?
There are challenges facing bookkeepers in particular: one is that there is a perception amongst many SMBs that there is a low-ball solution in the market. Many expect to pay $25-$45 an hour due to the prevalence of so-called ‘bookkeepers’ who are not adequately qualified and who go lo-ball. Then there is the burgeoning offshore marketplace which is being increasingly populated by accounting firms, ready and willing to ship their data entry work offshore. And thirdly, it is often assumed that the buyer has all the power. These need not be obstacles to the contemporary and business-minded professional.
The fact is, nearly all freelance bookkeepers charge for their services by the hour. It’s the easiest way to set fees, but it’s also a big reason why so many struggle – usually for YEARS!
Most professionals are too cheap. Most bookkeepers don’t know how to price because most don’t make enough money. Plumbers make more because they solve urgent problems and work in conditions that we would not want to work in. As a profession bookkeepers are not taught to price and naturally will tend to set price as a function of cost. It’s a big mistake.
New clients/customers will come from referrals or from your website. Invariably there will be the question: ‘What’s your rate?’ Rather than responding and entering into the ‘What’s your rate?’ dance, offer a response which equalises the dynamic.
Hourly rates are dead (except for those caught in legacy arrangements). Flat rate is peace of mind for prospective clients as they won’t be questioning your work ethic; that is, are you charging for hours you did not put in? Especially if you work from home. Flat rate gives you flexibility rather than the constrained, hourly rate basis where the client may prefer you to work from their place of business so they can monitor your time.
Business hires bookkeepers and they may not know what to expect. The business-minded bookkeeper will take any opportunity to move the conversation away from discussing hourly rate to asking open and closed questions. Why bother? Questions such as “What are the three business issues that keep you awake at night?” deflect the discussion.
Questions are trust-building; they are a mutual exchange and a great leveller that can obviate the power imbalance between buyer and seller. Importantly, little knowledge is gained, or value created when the hourly rate is discussed. You get what you expect, leaving money on the table. At the heart of it is the question, whose needs are being served here?
Ask a closed question “Is there anything else I can do for you (apart from doing the books)?” – Get ‘no’ for an answer and a stony stare. Read more