PROFESSIONAL CONTENT FROM YOUR TRUSTED ADVISOR!

PROFESSIONAL CONTENT FROM YOUR TRUSTED ADVISOR!


BUSINESS BOOKKEEPING CONTENT!

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BUSINESS BOOKKEEPING CONTENT!

THE TRUE COST OF DOING BUSINESS

Vincent Bookkeeping is proud to announce our new Blog site! Business Specific topics on Bookkeeping and accounting, from hiring an Independent Contractor vs an Employee, to hiring a CPA vs an E.A... If there is a topic you would like to see or if you have questions please use the contact me button.


This blog is all about the true cost of doing business, from startup costs, to keeping the doors open, to making important sound business decisions out of the gate and what it can cost you down the line if you don't!


Vincent Bookkeeping is also in the process of starting a Video Training series for QuickBooks users. Some of this content will be provided by paid membership only.

If videos are posted on this blog site, some maybe paid content only.


Visit http://youronlinevideotutor.com/ for more information.


Vincent Bookkeeping business analysis.

Vincent Bookkeeping business analysis.

CATCHING FALLING KNIVES

I WAS ASKED THE FOLLOWING QUESTION:

 

When speaking to a lot of small business owners, I hear them say, "I'll hire you to set up my bookkeeping when I get a few more customers."  When should a small business owner hire a bookkeeper?
 

HERE IS MY RESPONSE:
 

A small business should start off with the right information. A business plan, legal counsel on business structure, Tax advise or strategy plus accounting software & procedures.
 

VINCENT BOOKKEEPING charges between $45.00 to $65.00 an hour for basic and full charge bookkeeping services.
 

However, when somebody comes to me after a year or two and they want to hire me as their bookkeeper to catch-up or clean-up work I charge $130.00 to $150.00 an hour.
 

When I take on a new clean-up or catch-up client, I can't take on any other new clients, sometimes for MONTHS depending upon how big the clean-up is. This also disrupts my current workflow especially if there is a looming tax deadline.
 

Clean-up is a niche market with business owners who are difficult to work with, that are difficult to service, they lack stability and are more costly in the long run.
 

As of late I recognize that not everyone who starts a business is going to be successful. Those who are successful they plan and those who are not, don't. Those who don't plan fail or have major struggles in their businesses.
 

New clean-up clients are only coming to me because the IRS is auditing them or they owe back taxes and they're losing their ability to continue to make money because their contractors license or corporation is frozen or their money is being levied from their bank accounts. 
 

Only when the problem becomes so painful do they decide to do something about it and then they expect their bookkeeper to catch their falling knife at rock bottom rates. 
 

Wendy Vincent
Founder of Vincent Bookkeeping
(408) 459-5802
www.VincentBookkeeping.com

WHAT SHOULD I PAY MY BOOKKEEPER?

Ever wondering what you should pay your bookkeeper?



 

I get some variation of this question often such as "Is my bookkeeper gouging me?" "Am I paying my receptionist too much to do the bookkeeping?" "Why do freelance bookkeepers charge so much?" I answer, well that depends!


My name is Wendy Vincent, I am the owner of Vincent Bookkeeping. I have been doing bookkeeping for my family since 1984, way before computers! I was Certified as a Bookkeeper in 2003. I opened Vincent Bookkeeping in 2010. I have been trained as a Full Charge Bookkeeper and I continue my education through AIPB. Let me answer the above question this way, but first....

I should start off with the definition of a few key words here.


  • Record keeper is not a bookkeeper, often times a file clerk is mistaken for a bookkeeper.
  • Receptionist is not a bookkeeper, a receptionist answers phones and directs your customers to the right contact person. A lot of businesses have the receptionist do a lot of other jobs and this can sometimes create a big mess.
  • Bookkeeper is a term used loosely these days. Anyone can call themselves a Bookkeeper, so you have to make sure someone that you hire is a "certified Bookkeeper", has had Bookkeeping education and continues to receive ongoing education from one of the following sources: AIPB American Institute of Public Bookkeepers, NBA National Bookkeepers Association, or NACPB National Association of Certified Public Bookkeepers.
  • ProAdvisor or Intuit Professional Advisor does not mean someone is a bookkeeper. Intuit certifies that a person has been trained (Open Book online test) style to know about the features of Intuit software so that they can better sell intuit software to Intuits new and existing customers. (This is like the difference between a security guard and a police officer)
  •  Data Entry Clerk is not a bookkeeper. If you hire someone to enter your data from your bank statement to your accounting file that does not mean that they know how to categorize your transactions to get you the best write off for your taxes, nor does it mean that they understand the tax code or why you should take these deductions in the first place.
  • Employee - Someone you hire to do a job, you control their time and job description, and set their salary.
  • Freelance - Someone you contract with to do a project or a specific set of tasks, you do not control their time, they determine the work they will and will not be willing to do under the contract and they set their hourly rate based upon their cost of living, business expense and education.
  • Bookkeeper - Job Description: Maintains and records a complete and systematic set of business transactions. Balances ledgers, reconciles accounts, and prepares reports to show receipts, expenditures, accounts receivable, and payable. Follows bookkeeping procedures established by the organization. Typically reports to a supervisor or a manager. Gaining or has attained full proficiency in a specific area of discipline such as Accounts Receivable clerk, or Accounts Payable clerk. Works under moderate supervision. Typically requires 1-3 years of related experience.
  • Full Charge Bookkeeper - Job Description: Maintains and records a complete and systematic set of business transactions. Balances ledgers, reconciles accounts, and prepares reports to show receipts, expenditures, accounts receivable, and accounts payable. Follows bookkeeping procedures established by the organization within the  "GAAP" or Generally accepted Accounting principals. May require an  associate's degree or its equivalent. Typically reports to a supervisor  or the owner. Has gained proficiency in multiple competencies relevant  to the job. Works independently within established procedures associated  with the specific job function. Typically requires 3-5 years of related  experience. 


Now that we have those items cleared up we should head right into it to the numbers. Let's first start with employee vs freelance.


When you want to hire someone to do your bookkeeping the easiest way to determine how much you should pay should be based upon the job description and rates, this is best obtained from Salary.com This website will allow you to research based upon your area, job description and the education level you are seeking.


My last hourly rate as a employee back in 2010 was $22.00 per hour for daily Accounts Receivable and Accounts Payable. Naturally I was paid more when I handled more difficult tasks such as Payroll, Sales tax or Training other employees at which point I was paid $35.00 per hour. This did not include bonuses, health insurance, life insurance, 401K etc. Here is the easiest way to figure out this hourly rate.

 

The information in the photo to the right is based upon - FULL CHARGE BOOKKEEPER (aka Sr. Bookkeeper) in Santa Clara, Ca. 95050


If you take the base salary of $54,300.00 divide that amount by 52 weeks per year and divide it again by 40 hours per week you will come up with a standard hourly rate, $26.11 per hour in this case. This does not include what is would cost to pay employee taxes from the employer, a desk for the employee, computer, workman's comp posters, employee manuals, new hire packets to be made and possible uniforms if that is something you require.


If you are looking at hiring a freelance bookkeeper the rates go up per hour considerably for several reasons. One being the Freelance Bookkeeper has to cover all of the above for themselves, two the Freelance Bookkeeper will have overhead just like you do. This may include the cost for renting an office, computers, professional memberships, continuing education, errors and omissions insurance, liability insurance and if the freelancer comes to you they will also have auto insurance, gas and maintenance costs.

 

Michelle L. Long CPA did the 2018 Intuit Average Billing Rate survey. According to the results the average amount billed for a freelance Bookkeeper is between $64.00 & $88.00 per hour. Full Charge Bookkeepers who were certified were billing at $67.00 to $119.00 per hour. If you are attempting to hire a bookkeeper to come into your office location or remotely they are more apt to use the rate for your area, not their own.


An example: if a freelance bookkeeper lives in AZ. and they do your bookkeeping remotely and you live in the Silicon Valley, your rate of service for an experienced, educated, full charge bookkeeper could be around $82.00 per hour, even though she may charge someone $67.00 per hour if they live down the street from her. This is because part of the pricing is based upon the cost of living in the companies area.

 

If you have a big mess because you hired a data entry clerk or receptionists to do your bookkeeping or if you have had errors because your bookkeeping was not set up correctly in the beginning than you could be paying a lot more per hour to get your bookkeeping cleaned-up so that the bookkeeper can accurately do your ongoing bookkeeping.


I have seen rates in the Silicon Valley as high as $195.00 per hour for this level of service. It can be like hiring an Internal Auditor or Internal Forensic Accountant. Most basic bookkeepers and even some CPA's do not handle this level of clean-up the right way. If your Bookkeeper or CPA moves everything at the end of the year to your "Retained Earnings" then they have not done clean-up work. They have cleared the previous years books so they can doing bookkeeping moving forward. It doesn't solve the problem.


Sadly, last week I was on an online training session with a CPA and they were guiding Bookkeepers who had no experience to do this!! A lot of full charge bookkeepers, Enrolled Agents, and CPA's were quite upset about this, as this is not the industry standard.


 Be aware that you as the owner are the one who is responsible for your accounting even if an outside accountant does entries like this. It could still cost you more in the long run if you ever need it cleaned-up the right away.


Vincent Bookkeeping is currently available for new clients. I do everything from basic freelance bookkeeping to forensic level internal clean-up. Call today for a free 30 minute consultation. To learn more about Vincent Bookkeeping visit our website. VincentBookkeeping.com

Bookkeeping Salary

Bookkeeping Salary