As an accountant, you’re no stranger to charges and payments. But setting your own hourly business rates is a different story and could leave even the most seasoned CPA out on a limb.
Fortunately, if you’re wondering how to calculate hourly rates, you’ve come to the right place. We’ve compiled some tips to help you know what to charge and to get you started on finding a fair price for your services.
How much do you want to make in a year? It may seem like a silly question since just about everyone wishes they were making more. But try to be realistic. Consider your regular expenses (including work expenses), your financial goals, and how many hours on average you want to work every week.
Once you’ve landed on a salary estimate, you can use it to calculate hourly pay by dividing it by weeks in a year, then by hours you want to work each week. The sum could be a good starting point for an hourly rate.
There are a few ways to approach this method. For example, you can reach out to other accountants in your network who work hourly, and ask them how much they charge.
You can also look up statistics for accounting and bookkeeping services hourly rates if you’re looking for more data than your network can provide. Look up the average CPA hourly rate, then think about where you live and conduct your business. You can calculate hourly rates based on the average — just be sure to adjust for the cost of living where you live and do business.
Whether you’re offering bookkeeping services or preparing tax returns, chances are that there are a handful of other professionals doing the same type of work in your area. Calculating hourly wages based on your competition’s is a great strategy.
Determine your closest competitors and look at their hourly rates. Your freelance accountant hourly rate should be in the same ballpark since you’re charging for equivalent work. Also, offering discounts for select services could help make your accounting business stand out from the pack.
If you’re asking yourself “How much should I charge per hour?” start by looking at your skill set. Finding the right hourly rate will depend on the type of work you do and your level of related education. Do you have a degree in your field? What certifications do you have?
Rates for bookkeepers, for example, will likely differ from a CPA or accounting consultant hourly rate. Why? Because even though each profession assists with finance management, they typically perform different tasks and require different training and certification.
So make sure your hourly rate reflects not just the work you’re performing, but also the effort you put into building your career.
Whether you’re managing a firm or operating as a one-person show, the accounting field is full of potential risks — and those risks can add up to big trouble. Make sure you’re covered.
Simply Business® helps small business owners find the insurance coverage they need. For an accountant, a professional liability policy could save you from paying out of pocket for omissions or negligence claims. We also recommend considering general liability and workers’ comp to help you cover your bases.
Tell us a little about your business using our online quote tool and we’ll have a quote ready for you in just minutes. We make it easy to compare insurance options and prices from our panel of leading national carriers, without completing endless quote forms. Because choice counts.
It doesn’t matter if you’re just entering the field or you have 20 years of experience under your belt — knowing how to calculate an hourly wage rate isn’t always easy. Trying to offer competitive rates without devaluing your work can be a tightrope walk.
Don’t undervalue your work. You’ve put a lot of time and effort into learning the tools of the trade and getting your required certifications. Let your work speak for itself.
After several years of working in insurance while also freelance writing, I've finally found where the two interests intersect. I'm a writer with Simply Business with an insurance processing background and a love of research.
Kristin writes on a number of topics such as small business trends, license reciprocity, and BOP insurance.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
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