Click on the link below to watch my video: The 3 biggest mistakes bookkeepers make in their bookkeeping business:
What are the 3 biggest mistakes that bookkeepers make in their bookkeeping business?
Mistake #1
Number one is in pricing. I think most people under price their services, and I think that mistake comes from fear. I certainly can understand that, because I have definitely pulled my hair out trying to figure out my own pricing. Even now when I price services for clients, I still feel a certain level of anxiety when I do it.
There’s that whole uncertainty of, “Will they or won’t they? Will they like this pricing? Will they not like the pricing?” The other side of that is, “What if I under price? What if I give too much away?”
Yes, there’s a lot of anxiety that goes on behind pricing. Again, I understand that. However, what I want you to know is that pricing is a journey that you need to go on, and it’s something that you will learn to refine over time if you make some very specific changes.
Number one, in terms of improving your pricing, is that you need to establish yourself as a specialist in whatever you do. The reason is that an ideal client will value working with a specialist or with an expert. Those are the types of clients that you’re going after, the ones that will actually pay for you to solve their biggest problem.
Number two, you need to make a shift to fixed pricing. If you’re starting out, perhaps this is a range of what something will cost, Ultimately, you want to work toward giving your client a fixed price, and you want to get at least 50% of your price paid up front.
Mistake #2
The Second biggest mistake that I see bookkeepers make is having an ’employee mentality’. What I mean by that is that we let the clients tell us what to do. I see a lot of comments in the Facebook groups from bookkeepers saying, “Well, my client wants me to do this,” or, “My client wants me to do that.” I’ve even seen, “my client wants me to do this that maybe isn’t legal or isn’t right,” or knowing, “maybe it’s not the best thing for the client.”
The reason that’s happening is because we’re stuck in employee mentality. Perhaps because we have worked for other people, and we’re used to having a boss and doing what the boss wants. What you need understand is that your client is hiring a professional. You, as the bookkeeper, are the professional. Ultimately, it is up to you then to bring the solutions, the best practices, the best way of doing things to your client.
If that client is trying to control you, or to direct you too much, then they’re not an ideal client. You need to start moving away from those kinds of clients, and finding clients who are teachable, who are trainable, and who want to do the right thing. Those are ideal clients.
I encourage you then, when you come across these clients who are trying to be very controlling, to learn to assert yourself and to say, “These are best practices. I do everything under best practices, and I want to make sure we’re a good fit. Otherwise, we probably shouldn’t be working together.”
Mistake #3
The third biggest mistake that I see bookkeepers make is that they will take on just any client. Basically, if the client is willing to pay you, then you take them on. Later you may figure out that their books are completely screwed up, or maybe they work in an industry that you don’t understand. Perhaps they ask you for something at first, but that’s not really what they wanted once you started to look at their books.
There’s a tendency to take on a client before we’ve done a certain level of due diligence, if you will, of looking at their books, understanding the client’s needs, and really digging in to find the best solution for that client. Yes, that can take time, and at some point you will likely need to start charging to do a diagnostic of your clients books. I know that some people are telling me in the Facebook groups, “Well, Veronica, you can do that because you’re an expert, and you’ve been doing this a while.” I actually did start off giving free diagnostics for clients, but I moved away from that a few years ago, because of the value that I bring to clients and how much I can tell them about what’s wrong with their books. I believe that I deserve to be paid for that level of expertise.
How can you avoid these mistakes?
I would encourage you, number one, before you just dive in and take any client, do a proper assessment, “Is this prospect an ideal client for you?” If they are in the wrong industry, they have a bad personality, they’re controlling, or they’re not willing to pay your fees, then walk away. They are not ideal clients, you’re better off serving ideal clients.
If they do meet your ideal criteria, the next step is to do a proper assessment of their books, of what they really need, so you can then make a proper determination and recommendation to that client of the services that are needed. Then you go into a service agreement, which is a specific agreement of what you will deliver. Again, hopefully it’s a fixed price agreement or you’re giving the client a range, and then you’re getting 50% paid up front.
I hope you found this insightful to help you avoid the 3 biggest mistakes that bookkeepers make in their bookkeeping business.