Provide customized accounting services

This article shows you how to provide accounting and bookkeeping services that are fit to your clients needs.

Here’s a short quiz I don’t think you’ll have difficulty completing:

  1. All things being equal, would you rather earn $45/hour or $55/hour doing accounting for a business?
  2. All things being equal, would you rather have a $250/month clients or a $400/month client?

These questions may appear to take the record for the all-time dumbest questions ever asked. But, when you are working for yourself, sometimes these are questions that beg asking – it’s a question of economics.

You might recall from your high school economics class that supply and demand drive the pricing structure of the free world. The most obvious contemporary example is the computer industry where competition has been driving the prices of computer hardware down every year. As more computer manufacturers have entered the playing field the supply has increased beyond demand, and prices have fallen, and fallen, and fallen even further.

This principle can work for or against any business — even accountants. When we specialize in providing accounting for industries where there’s high demand, but limited competition, we can find clients more readily and charge a higher fee for our services. This is putting the law of supply and demand in our favor.

Why will some businesses pay more for bookkeeping than others?

The business world is “information hungry.” Managers/Owners want the latest information on the economy, their industry, and most particularly their business — and they want it now.

Fifty years ago a business owner might have been the only “game” in town. They might have been the only hospital, car dealer, or dentist. Not anymore. With competition being what it is, business management needs to keep on top of their business more so now than ever before. If they’re not watching their business, they may not have a business to watch.

That’s certainly where the accountant comes in. Through a well-designed information system, uniquely fit to their business, the accountant can give management the information they want and need when they want it.

THE KEY IS TO FIT THE SYSTEM TO THE BUSINESS. To meet their needs we must understand their business and fit the accounting system accordingly. A contractor, for instance, driving a pickup truck with papers stashed and stuck everywhere imaginable, needs to have a different system in place, than does the local hairdresser. An automobile dealership needs to have a system that will track each car separately for both control and flooring (inventory finance) purposes.

Now, I know what you’re thinking: “Don’t all businesses use debits and credits alike?” The answer is “yes” and “no.” It’s true that debits are on the left, and credits on the right. But each business has different types of transactions and different accounts to follow. For instance, the automotive business has three accounts that are somewhat unique to that industry. Namely, Flooring Payable, Contracts in Transit, and Bank Reserve accounts.

The construction industry, particularly builders and developers, work with Jobs in Progress and Progress Billings. Manufacturing businesses must have a system in place that will track progress of raw materials and labor through to the finished product so that the owners can establish their cost per unit.

Since the universities and colleges don’t teach these small business concepts, the opportunities are great for the accountant knowledgeable about these areas. To confirm this, next time you talk with an accounting graduate ask them how “Flooring Payable,” “Contracts in Transit,” and “Bank Reserve Account” are used. Chances are very good that they won’t have a clue.

Now, before you get critical of their training or capability remember that the colleges are grooming them for the Fortune 500 — not the used car dealer. All these concepts I’ve mentioned in this article are small business issues for businesses typically employing less than 100 employees.

We recognized the value of these concepts years ago, so our course, covers all types of businesses including those that I’ve mentioned above. And the course is suitable for the beginning accountant and for the college graduate. You will even have an opportunity to do the books for these businesses and practice them for yourself before working on the real thing. You’ll find more information on our complete accounting course under Accounting Made Easy.

Well, should you specialize in a higher demand industry? That depends on your answer to these two questions. Do you want to make more money? Do you have the knowledge to work with these businesses? If your answer to both these last two questions is “yes” then you might want to consider answering “yes” to the first question, as well.

Taking Good Care of Your Clients

This article looks at a powerful strategy for increasing your customer loyalty and improving customer service in your accounting and bookkeeping business.

How can you keep your existing clients and win back ones you’ve lost? Become a client caretaker. Here are the four C’s of excellent client care:

Concern. Sincerely care about your clients’ complete satisfaction, and convey that caring in all your interactions with clients. Not only is this doing the right thing, it’s also doing the smart thing: After all, clients’ satisfaction and continued business can definitely impact your job security.

Consideration. In today’s bustling business environment, clients relish good, old-fashioned courtesy and genuine kindness. Even when you’re tired or stressed, act as though you were feeling energetic and cheerful. Your clients will appreciate your efforts.

Conscientiousness. Always do what you promised in a timely manner. This is essential to earning clients’ trust, and that trust is the key to gaining repeat business.

Cooperation. If one of your co-workers needs a hand in order to provide excellent service, roll up your sleeves and help out–even if you know your co-worker may get all the credit afterward. It doesn’t matter who gets the glory; what does matter is whether or not the clients’ needs are met completely.

What fee should you charge for your service?

This article discusses how to figure out what to charge business clients for your accounting and bookeeping services.

Make sure your prospective client recognizes the value of your services. See Why are businesses begging for my services? The most natural question next is “How much is it going to cost?”

The quickest way to discourage you is to charge too little for your services. Charging by the hour is too administratively time-consuming, and the small business clients dislike it. They prefer to know in advance how much the service will cost them, so that they can anticipate the charge and know what they are getting. You’ll need to calculate a monthly charge.

It wouldn’t be very responsible to GUESS at how much to charge each month. Either you will charge the client an unfair fee, or you won’t be charging what you are worth. A great way to assess the time-based fees involved is by the number of transactions you will need to record on average, each month. A transaction is a check, invoice, z-tape, bill, etc.

Ask your perspective client how many of each type of transaction you will need to record. The average small business has about 400 transactions each month.

Now take the number of transactions and multiply it by 50 cents per transaction and add $100 for the preparation of the Financial Statements. The average client will earn you $300 per month with 6-8 hours of work.

Then, ask them if this would seem a reasonable charge for all the benefits. If the prospective client says “yes”, congratulations on your new client.

If this person has not been pricing this service with other accountants, or does not fully understand the benefits, you might run in to objections. If it’s for the latter reason, you may have to step back and ask what benefits he thought were least valuable.

If the benefits are well understood, and he/she desires them, ask him if he might be able to get these benefits elsewhere for a lesser price.

If he plans on hiring someone, offer to help find a person. You might want to explain, however, that even paying someone a few hours each day will probably cost more than your fee. Plus, you will guarantee your work. And, they won’t incur the extra cost of computers, software, and office space.

You’re services are a bargain.

If he/she wants time to think, or is not interested, thank them graciously for their time, leave a business card, and ask for a referral.

By the way, you will get a “no”, more often than you will get a “yes.” Even the most qualified and practiced accountants will come away empty-handed more often than not. That’s alright. If you just pick up one account per week, within a short time you’ll be making a great income.

Request More Information and Tutorials here:

Accounting and Bookkeeping Tutorial

Should you use a contract for your services?

This article examines reasons why insisting on a contract may not be the best thing for your accounting and bookkeeping service.

You’ve finished your marketing presentation to your most promising potential client. They’re impressed with your confidence, energy, and offer. They’re ready to say “yes.” Do you pull out your bookkeeping service contract, or not?

In most cases, the answer is “Not.”

Most experienced freelancers have learned (the hard way) that small business owners avoid contracts – almost to the point of paranoia. They’ve heard all the horror stories where businesses signed a contract – any contract – and lived to regret it. Taking out the contract right now may kill the deal.

Not only does it put the potential client relationship in jeopardy, but you have to consider what value the contract is, anyway.

To begin with, the service contract simply formalizes your verbal agreement with the client. You can accomplish this just as well with a letter to the client, called an “Engagement Letter,” which you prepare and send when you return to your office. This one page letter, on your company letterhead, thanks the client for their time, lists the services you’re to offer, and restates your monthly fee.

Secondly, since you will pick up the set-up fee before you do any work, then request payment from the client upon delivery of financial statements, your greatest potential loss is one month’s billings. So the contract isn’t required for payment purposes, either.

Finally, since you guarantee their satisfaction, you’re taking all the risk. If they don’t like your work, they’re not going to pay for it – contract, or not.

However, on occasion a client might ask for a contract for their records, and legal peace of mind. If that be the case, here’s a contract form you can customize to fit your business and services. To download this form, click here.

 

Sealing the Deal with a Letter of Engagement

After meeting with a potential client, you should compose a letter of engagement immediately to formalize your business relationship. The letter not only seals the deal, but it articulates and solidifies expectations of both contractor and client.

Most small businesses respect a formal agreement but appreciate one that is not written like a legal document. Typically they are interested in a gentleman’s agreement and not something they will need a lawyer to look over (chances are both you and your client do not have the resources to consult regularly with lawyers). A letter of engagement will stand as a contract between you and your client, making the relationship formal and binding. And if done correctly, this document can protect your interests as you move forward in your business.

Services

A letter of engagement should specify the services you agree to provide. Start the letter by stating, “This is a list of my services as per our conversation today. If there is anything that I have missed or neglected to include, please contact me immediately as these are the services I am currently prepared to provide.” This avoids any misunderstanding as to what you agreed to do. Your client cannot come back months later and say, “I thought you were also going to…” This letter provides your client with the opportunity to ask for additional services upfront if necessary, and it protects you from doing work you had not originally planned on.

Timeline and Reporting Mechanisms

Be specific as to the services you will provide, but not the timeline in which they are to be performed. In managing your clients you will need flexibility in order to accomplish all the tasks associated with your business. For example, if you are collecting information from your client weekly, do not give an exact day or time. If you have specified a pick-up time and are late by even a day you are in breach of the contract. Simply state that you will collect the information weekly; perhaps you could say the “end of the week” or the “beginning of the following week.”

In your letter you must formalize the necessary reporting mechanisms you plan to use with your client. Provide a time when you will have the month-end prepared and ready to deliver; based on the client’s needs this can be monthly or perhaps quarterly. Again, do not be specific as to the times you will meet, as this could change. For example, you may want to state that you will meet with them by the 15th of each month with the previous month’s data. This allows for you to schedule a new appointment each month with leeway as to when the actual meeting time is.

Fees and Billing Processes

State the monthly fee charged for your services and the accepted method of payment (CC, Check, trade, etc.). You also need to state when the payment is due. If you require payment “at the time of pick-up,” you expect to be paid at the time you pick-up weekly information, before the work is done. If you require payment “at the time of delivery,” you expect to be paid before you handover the reports in your monthly meeting with the client.

You may also consider payment on a reoccurring date. Billing the client on a given date each month has many advantages; it is a bill that will be more likely to be paid by the client because it’s an expected monthly expense. This also helps your relations with your client, because they will be less likely to avoid you or postpone meetings because of a lack of funds. Make it clear whether or not the payment is for the previous month or for the work to be done in the upcoming month. Clarify that the set-up fee is in addition to your monthly billing fee.

Certified Mail

Send the letter to the potential client through certified mail. This signifies to your client the letter’s importance and provides you with notification that it has been received. Once you have a receipt, you can rest assured that your client has access to the document and will notify you if any changes are necessary.

A letter of engagement documents expectations of both contractor and client. It can be a means through which both feel comfortable in their business relationship. In this way, a prompt response following your first meeting with a potential client can seal the deal and provide you with a safety net as you move forward in your business.

Proper Business Processes Help Guard Your Success

With your business’ legal issues, it is critical to dot all your I’s and cross your T’s. Most startup business owners that you run into have a few stories of things they learned the hard way.

One of the most important ways that the Professional Bookkeeper™ program really distinguishes itself is in how it helps new businesses avoid legal hangups. Knowing the best ways to protect yourself ensures that you get paid for every hour of work that you do. You will learn how to earn $30-$60 per hour doing the kind of bookkeeping needed by every small business.

Next Page »