You may have skipped over the rest of our website and navigated straight to here
– to the bottom line.
We get that. We would do the same if we were in your shoes. You want to know how much all of this is going to cost and may be a bit wary if you have heard of firms charging $3,000, $4,000, $5,000, or more per month for bookkeeping and accounting services. Rest assured, our fees are far more affordable than you might expect and for most clients, the cost will be less than $2,000 per month.
Lower fees / higher quality / expanded scope
As with any business, we cannot accurately estimate a fee until we have assessed your financial profile. That caveat aside, our fees are significantly less than the prevailing rates while our scope of service is greater. How can that be? It’s easy—we utilize technology to do the heavy lifting. Our overhead is significantly lower than that of our competitors. We leverage with bandwidth versus labor. Eliminating the traditional bookkeeper position in favor of data flow managers, our staff can handle a substantially greater volume of accounting transactions than can the traditional back room bookkeeping staff. We strive to squeeze productivity into every process and bring efficiency to any task. The result is an expanded scope of service at a significantly lower cost. Costs are, after all, supposed to drop in concert with technological innovation. Unfortunately, many Business Managers are stuck in a paradigm that is decades old and that is reflected in fees that have not caught up with the Internet Age.
Our overhead is kept to a minimum. As it is our mission to make your life easier, meetings are held at your office or home. Not only is this protocol convenient for our clients, but by eliminating the need for conference rooms, we cut significant rental overhead that would otherwise be passed on to our clients. If it is important to meet your Business Manager in a mahogany-paneled suite with views of the skyline, then we are not your firm. We prefer to impress with our dexterity in utilizing technology and innovative business practices rather than to show off expensive but underutilized offices.
With a paperless approach, our business runs on a laptop. A virtual office eliminates filing cabinets, storage, furniture, office supplies, and other capital and operating costs. We don’t need archaic fax machines or bulky and expensive photocopiers. We don’t need file clerks. Secretarial and administrative staff are minimized. We are a digital workplace and our focus on technological solutions curtails overhead and reduces our fees.
We also deploy time-tested operations management principles to maximize efficiency and minimize internal costs. Although usually associated with manufacturing, these principles apply just as well to a service organization. We use Value Analysis to assign work based on the intrinsic cost of labor, ensuring a match between the price of the labor and the value of the task. Applying the Just-in-time (JIT) production strategy improves our internal rate of return by eliminating idle labor time. While the JIT method is typically associated with companies carrying physical inventory, for an accounting practice labor is our inventory. When business management is viewed as a production process, a whole new way of thinking emerges that is ultimately reflected in the pricing.
The Standard Fee Structure of Business Management Firms
Most Business Management firms charge a flat percentage of the client’s fee-able income. This fee typically ranges from 4% to 6% of revenue but is subject to a fixed minimum base rate. The formula may, for example, specify a fee equal to 5% of income with a minimum annual retainer of $30,000. The percent of income method provides a windfall to the business manager in a year when the client’s income is high. For example, let’s say a writer is paid $1 million upon delivery of a script. The Business Manager charging a 5% rate collects $50,000 in the year the script is completed, a $20,000 premium over the base fee.
We reject this model. The percentage approach is appropriate to determine the fees charged by agents or attorneys: those professionals are strategically involved in the generation of a client’s income. Business Managers, however, generally have no direct influence on a client’s earnings and we believe it is inappropriate to assess a fee based upon revenue. Furthermore, our workload is generally independent of the level of a client’s income: the time to manage your account is roughly the same whether you make half a million dollars or ten million dollars in a year. Relating the fee to income is, we believe, illogical and inequitable. And consider the end result: when all is said and done, does it make sense to pay over $4,000 a month for bookkeeping services?
The Bottom Line
Our overall fee range is $500—$2,500 per month, depending on the volume of transactions and the scope of the work. The average client with a typical range of transactions will pay between $1,500 and $2,000 per month for our full service package. Full service means that we handle all of your accounting and bookkeeping, document management, metadata management, and tax organization. If you currently have a Business Manager and are accustomed to paying $5,000 a month, your fee will likely be cut in half. Even if you currently pay only $2,500 a month for your bookkeeping, we are confident that we can provide an expanded scope of service at an even lower fee.
These fees are generally independent of your level of wealth. Your net worth is not necessarily a proxy for the amount of time it takes to handle your account. Factors that influence our rate include the number of properties owned, the number of bank and investment accounts, whether you have separate business entities, and so on. We can usually make a reasonable estimate of your fee in our initial consultation.