How does a bookkeeper charge for their bookkeeping services?

How Does a Bookkeeper Charge
For Their Bookkeeping Service?

by L. Kenway BComm CPB

You may be wondering if you have never used a bookkeeper before, how are bookkeeping service fees structured? Fill your teacup and we'll chat.

Bookkeeping fees are dependent upon the volume of transactions, whether you have employees, how complex your industry is, whether you need job costing, ... there are many factors that can influence the price but ...

... generally there are a few ways bookkeepers set their fee. Hourly Rate or Flat Fee are common with many requesting all or a portion of the fees paid upfront through a deposit or retainer.

Setting Bookkeeper Rates
By The Hour, Page, Flat Fee, Prepaid, Fixed Priced Agreements?

Bookkeeping service fee charged by the hour

Some bookkeepers charge out their bookkeeping service at a basic hourly fee with a set minimum charge. The average rate for general bookkeeping services in Canada right now is $56/hour (2011 Intuit survey) ... up from $35/hour (2009 Intuit survey). The most commonly used rate was $50/hour.

Note - expect to pay more for "advisor" services with regards to your computer software. Rural areas tend to charge less than urban areas.


If you are just starting out in public bookkeeping, set your rate/pricing in line with your experience. As your experience grows, increase your rates/pricing.

This means you would definitely not charge the average rate when you start out.

If you are hiring a bookkeeper, make sure you inquire about their formal training, their practical experience (was it obtained in private industry or through public practice ...small business or large corporations) and ask for references ... then follow through.

Don't be afraid to give them a bookkeeping test to see if they will be able to perform the work you require competently. Sometimes I want to cry for business owners who are in financial ruin because they trusted their bookkeeper to know the rules and find out too late during an audit just how much they didn't know.

As this is the average rate, some bookkeepers may charge less per hour and others may charge more. Here is a very loose guide:

  • If a bookkeeper charges below the average bookkeeping rate ... say $30/hour or less ... they are probably new to bookkeeping ... their inexperience is reflected in their rates. This doesn't automatically mean they don't have formal bookkeeping training or bookkeeping experience, just that they may be new to public bookkeeping. As a small business owner, you need to know that work experience as an accounts payable or accounts receivable clerk within a medium to large sized organization does not provide an adequate basis by itself for becoming a freelance bookkeeper.
  • If a bookkeeper charges well below the average bookkeeping rate ... say less than $20/hour ... I'd recommend you make arrangements for them to take a bookkeeping test to gauge their skills ... because your business could be at risk if poor bookkeeping practices are followed. The bad news will likely show up during a CRA audit.
  • If the bookkeeper works for and is supervised by a certified accountant (CA, CGA), expect to pay well above the average bookkeeping rate ... you are paying for quality of work due to the supervised environment ... a second pair of eyes that is well versed in GAAP.
  • If the bookkeeper is working freelance ... but is certified, expect to pay $10 to $15 above the average bookkeeping rate ... although the increase in the average rate (see above) may be due to more bookkeepers becoming certified with the CBA or IPBC.
  • If the bookkeeper is experienced ... but not certified, expect their bookkeeping rate to be plus or minus $5 of the average bookkeeping rate.

Don't quote me on this .... this is just an educated guess ... I have no figures to back this up ... the price ranges for bookkeeping service just stick in my mind from things I've read or heard over the past ten years. Of course the longer this page is on the internet, the more skewed the above guesses are as new bookkeepers read it and don't necessarily price their services and knowledge appropriately.

Rates vary in different areas within a province and across Canada. In communities experiencing a recession, rates may be below the averages while large cities seem to command a higher rate.

From the various websites I've visited while doing research for this page, it seems $75 is the lowest minimum charge I found bookkeepers (online anyway) are accepting. This is for a very basic business with minimal transactions ... and it may be the best $75 you spend each month if you are just starting out.

IPBC (Institute of Professional Bookkeepers of Canada) now has a report titled Status of the Canadian Bookkeeping Industry 2009 Benchmark Study available for sale at> Continuing education> 2009 Benchmark Study. The study "focused on bookkeepers and their salaries, education and training levels, accreditation." It provides useful information pertaining to bookkeeping services.

Bookkeeping service fee charged as a flat fee

The second method that bookkeepers charge is by an agreed upon, in advance, fixed monthly charge. This charge is usually based on a combination of so much per number of transactions plus a fixed amount to cover preparation of financial statements and a monthly (or quarterly) meeting with you to discuss your financial results.

It usually works out to a minimum charge in the $125 to $175 range for bookkeepers who use a fixed fee structure, again for a very basic business with minimal transactions ...

... But the advice they can provide, if you let them, by having an ongoing relationship with them, usually repays your fee in actual money savings and use of your time (that is only if you feel your time is actually valuable and worthy of placing a dollar value on.)

Flat fees are the way to go for "backwork" ... backwork is bookkeeping for prior years that is past due.

I've also noticed some bookkeepers charge "by the page" ... that is they will charge a flat fee up to a certain amount of pages (bank statement, credit card statement, etc.) and then an additional fee for every page over the maximum number included in the flat fee. There will usually also be other "a la carte" items you can request.

Expect to pay a one-time setup fee and a deposit in advance

Often times, a bookkeeper will charge a one-time administration fee to set up the books. This fee covers setting up your chart of accounts (after discussions with you) and inputting your opening balances on the balance sheet and if applicable, payroll. Intuit's 2011 survey results say this is charged as a flat fee averaging at $286. The figure most commonly used was $250.

The bookkeeping industry has slowly been moving toward some form of payment before service ... due to many small business owners not paying their bills after the work has been completed.

It is now normal practice to request a deposit up front and in advance of processing. This fee can vary but is usually between 25% to 50% of the estimated bill. The worse you are at paying your outstanding bill, the higher the deposit requirement.

Many bookkeepers only work on a 100% estimated payment up front as they do not extend credit of any kind ... or they may request a retainer which is applied to your final bill.

If you would like to pay your bookkeeper by credit card and they don't offer that service yet, ask them if they would consider using PayPal. It is a great way for a small business to accept credit cards without all the merchant fees. All they need to do is sign up and send you an e-mail. Instructions on how to pay are provided.

Another great payment option is eTransfers.

The Best Practice is a Fixed Priced Agreement

Ask your bookkeeper for a fixed price agreement. This requires your bookkeeper to look at your business, your problems and give you a customized annual quote specific to your business and its challenges. It will require your bookkeeper interview you prior to presenting the agreement. The quote should include consulting time so you have somewhere to go to ask your questions without the "meter" running.

Why is this good for you?

  1. There is some risk to the bookkeeper to deliver.
  2. You get to establish a relationship with your bookkeeper because the clock isn't running.
  3. You get price stability and can budget appropriately. 

Normally when the bookkeeper presents the fixed pricing agreement, you will have your choice of three service levels to help you find a service package that you can afford or service at a level YOU want. Think of it this way ... if you were shopping for a car, you have a wide range of makes, models, colors. It is not a one size sedan / one vehicle price fits all. 

For bookkeepers interested in offering fixed price agreements to your customers, please read the book "Pricing on Purpose: Creating and Capturing Value" by Ron Baker.

A big problem bookkeepers have when working with startup businesses is:

  1. You are disorganized.
  2. You usually don't understand your reporting requirements yet;
  3. You spend your government monies collected in trust to cover business cash shortfalls or to support your personal lifestyle.
  4. You don't put aside money to pay your income tax at year-end. 
  5. You tend to have a lot of data entry because you fail to separate business and personal expenses; and
  6. You are on a learning curve and make a lot of errors that need correcting.

Establishing a relationship with your bookkeeper where you can speak with them on a regular basis helps keep you out of paperwork hell and on the path to success and profitability.

If you are a small business owner wondering how much to budget for bookkeeping services, I'd say $3,500 - $6,000 including taxes annually for a set of audit proof books. That would include a one time setup fee, monthly (this would mean you actually have to submit ALL your paperwork on time) bookkeeping for 40 transactions or less per month, monthly conversations and management reports , year-end, internal financial statements, and T1 tax preparation for sole proprietors. Payroll, inventory, multi-currency transactions will likely cost more. If you are incorporated, it will likely you cost more due to more paperwork requirements and additional knowledge requirements to prepare a set of books. This is just a ballpark figure. Your bookkeeper needs to determine YOUR needs before they quote you.

If your bookkeeper is only doing data entry for you ... find a new bookkeeper. There is way more to freelance bookkeeping than data entry! flow

Reducing Your Bookkeeping Service Billing

If a bookkeeper didn't offer a fixed price agreement ... a bookkeeper will probably want to do your books at an hourly rate for three months before they set a fixed price for you. The reason ...

... clients' presentation and completeness of information.

You can help keep your bookkeeping fees reasonable by asking your bookkeeper how they would like the information presented.

The more organized you are, the less it costs you. Why?

The bookkeeper does not have to spend time organizing your receipts or following up on missing information or ... figuring out which account you paid "that" expense from. Picture a lot of head scratching, and hearing the word "hmmmm"! ;-)

If your bookkeeper does not offer fixed price agreements, ask your bookkeeper for a fixed flat fee per month that is reviewed / renewed annually ... after they have worked on your books for three to six months.


The Shoebox Filing System

Most bookkeepers don't mind sorting "shoebox" type filing ... especially for the "I don't like or do paperwork" client ... but if this is you ... you must be prepared to pay for this service.

It takes time and time is money ... which is why you probably opted not to sort and organize it yourself. So no complaining when you get the bill ... and prompt payment of the bill is always appreciated.

There are many small business owners out there who think bookkeeping is only about data entry. I'm here to tell you ... you are wrong. Just ask any small business owner who hired someone cheap to do data entry after they have been audited.

It requires knowledge to know where to enter your data ... to the know the exceptions to the rules ... which means sorting your source documents is not as easy as you think it is ... if you want it done properly. Hire a data entry clerk if you want, just don't mistake that person as a bookkeeper.

If you want to save money and hand in your receipts sorted in an organized fashion, consider adapting this portable document filing system. It's a real money and time saver.

I Think I've Been Ripped Off!

I've heard small business owners think they are being ripped off when a bookkeeper enters the invoices/bills through Accounts Payable during backwork. "I'm paying for 2 transactions when one could have been entered in 1 transaction!"

Well here's the thing; if you were sloppy with your paperwork and didn't make it easy for the bookkeeper to determine source of payment, it actually costs you less to have the bookkeeper let the software do the sorting/matching of bill and payment of the bill. It is much more efficient than trying to match paperwork manually.

Also, if you had a flat fee or a fixed pricing agreement, how the bookkeeper enters the data wouldn't be an issue ... but here is why a bookkeeper may enter the invoice/bills through Account Payable.

As many customers don't indicate payment sources, I enter all the unmatched purchase receipts and bills through the Accounts Payable module. Then I pay it from "my best guess" source. When I reconcile the bank or credit card statement, I can quickly fix the source of payment if my best guess was wrong. It saves voiding and reentering the transaction if the period is still open or doing a correcting entry to correct the entry if the period is closed. Using Accounts Payable as a type of clearing account can be one way of implementing a good internal control procedure.

This method saves me time when providing backwork bookkeeping services. (I use a slightly different method for dealing with missing source documents in the current year.)

This method also provides a good vendor history for the client and ensures no expenses are double booked. It achieves this because when a client pays a bill with a cheque, but never submitted the actual bill with their source documents, the cheque now gets coded to Accounts Payable and not the expense account. Recording the cheque now places the vendor account into a "credit" balance. It alerts me that the original source document needs to be tracked down if the bookkeeping is going to be audit proof. When I receive the supplier invoice, I code it to the expense account. Next, I apply the outstanding "credit" to the supplier invoice to clear it and show it paid.

This method makes it easy to review the Accounts Payable and see what documentation is missing because the Vendor's balance will show a "credit".

If, by the end of the year, a client has not provided the appropriate source document, the amounts are "expensed" to owner's draw as they are not tax deductible without the source document ... so you can see how important organized paperwork is when you have a small business. A lost invoice or receipt means increased taxes because you lost a tax deduction ... which means less money in your pocket.

And while I think of it ... when you collect money from a customer, deposit it as soon as possible ... the whole amount received. Don't keep some of the cash for yourself. If you need money, take a draw from your business account. It's much easier for the bookkeeper to match deposits and it will make any future tax audits go more smoothly.

If you expect a bookkeeper to process your quarterly books and GST return with less than two weeks lead time, expect to pay more.

Remember you are not their only client and they need to be able to schedule all their work to meet government compliance deadlines. Giving them lead times allows them to perform high quality work.

As you can see, it's not that easy to give you a figure as to what you could expect to pay for bookkeeping services. Because fees are based on volume of transactions, complexity of your industry, and different services you can opt in or out of, you need to get some quotes or ask your friends who they use.

Once you start asking around for a quote, be sure to ask if year-end preparation is included in their fee quote or if it is an additional charge.

Don't do this step until you know your business structure

Before you speak with prospective bookkeepers about bookkeeping services, you may want to read What Are Your Responsibilities When You Hire a Bookkeeper? flow

Reducing Your Bookkeeping Service Billing

When you pay a bill, get in the habit of writing down on the bill: (yes muck it up! ... because if you get audited three years down the road you will not remember the specifics of that bill.)

  • what date you paid it
  • from what account or credit card you paid it
  • if you wrote a cheque to pay the bill, the cheque number
  • the amount you paid if different from the balance
  • and anything else relevant .. especially if there is a "story"

If you can staple the paid receipt to the bill, that's good too!

Do the same thing for customer payments received. Write the following on the invoice:

  • what date you deposited it
  • what account it was deposited to
  • the amount you deposited if different from the balance
  • the customer's cheque number
  • the customer's address on the cheque if it is different than your billing address
  • and anything else relevant .. especially if there is a "story"

If you can staple the bank deposit receipt to the customer invoice, that's good too!

One habit I don't recommend is using a highlighter on thermal receipts. Over time, it blacks out the field and you really, really, really can't read it ... which is frustrating when entering backwork.

This habit may seem silly when you are just starting out and you don't have many transactions ... but once your volume grows, it is just inefficient to be hunting around while doing data entry, trying to figure out where money came from or went to. Remember always keep an audit trail.    ;-)

Why would a bookkeeper fire a client?

Get excellent bookkeeping service by being an excellent client.

If you find a good bookkeeper, treat him or her well ... because like a great hair dresser, they can be hard to find. A great bookkeeper can save you money.

And remember this possibility, just as you can "fire" your bookkeeper, they can also "fire" you.

Why would that happen? ...

... Hmmm. Let me count the reasons ... Slow payment for bookkeeping services rendered, continually submitting work late or just in time, or giving it to them in bits and pieces, or there is always something missing ... come immediately to mind.

You are probably wondering what's the big deal with stuff like that. The big deal is that it costs the bookkeeper in time and efficiency ... making the account much more expensive to operate.

  • Stopping and starting on a file takes more time than just working on the file once.
  • Taking time for collections means the bookkeeper is not providing bookkeeping services to another client.

If it is ongoing and your bookkeeper keeps you as a client, these inefficiencies will probably be built into your pricing ... interpret that as meaning you are paying more for bookkeeping services than the client who is well organized and always on time.

You may at some point wonder, "Does a bookkeeper have the right to hold a client's books until payment is received?". I talk about this issue in Small Business Bookkeeping Questions and Answers.


Third Party Civil Penalties

One thing you should be aware of ... bookkeepers and accountants are subject to third party civil penalties.

CRA brought in these penalties in 2000 to deter false statements or omissions. The financial penalty can be significant to the professional preparer and advisor ...

... So if you ask your bookkeeper to be willfully blind to obvious errors when preparing your information, they would be justified in withdrawing their bookkeeping services and resigning from the engagement.

In the U.S. tax preparers must register with the IRS and get a PTIN. The IRS was making it manadatory to pass competency tests and attend continuing education as a preventive measure against dishonest tax return preparers ... however a recent (2013) court case had this shut down as not part of their authorized mandate.

P.S. Bookkeepers - If a client comes to you reporting very little income, it is acceptable to ask how they support themselves ... as a way to protect yourself. They could be supported by financial gifts from relatives or ...

If you aren't satisfied with the answer, I would turn the client away.

Bookkeepers are not non-profit businesses. They provide bookkeeping services because they must work for a living to support themselves and their families just as you do ... consider that if you are thinking of moving the payment of their bill to the bottom of your list.

I'll close with this thought for the slow payers ... Do you enjoy phoning your clients / customers because they haven't paid your account? I'm guessing no. Then why do you think your bookkeeper enjoys this task?

... Just in case you missed what I said earlier ... slow bill payment of bookkeeping services rendered increases the cost of bookkeeping ... because unbillable hours for collections now has to be factored into the bookkeeping service rate.

One final thought. I've seen a lot of bookkeeping websites that do not have an "About Us" page ... or if they do, they never give their name or credentials. If they aren't willing to tell you who they are and what their background is, why would you want to do business with them? That would be like handing out a business card without your name on it ... ridiculous!

Ask yourself this, if they are hiding behind anonymity on their website, do you really think they will stand behind their bookkeeping work?

It's been great chatting with about bookkeeping today.

It's been great chatting with you .
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