One of the most time consuming tasks freelance bookkeepers perform is cleaning up accounts for a new client. Quite often their books are a mess. Because you’ve never done work for them before, it can be overwhelming trying to estimate how much to charge. Typically you’re going to base it upon a number of hours not on a flat-rate fee.
Before you can give anyone an estimate on a cleanup project, you need to see certain documents and/or their accounting file. Here are some key things freelance bookkeepers need to be looking at:
- When was the last time they reconciled their bank account?
- What things are they asking you to clean up? Are they asking you to clean up accounts receivable or accounts payable?
- How complex is the cleanup?
- When was the last time they filed a tax return? (Especially look at Schedule C of that tax return.)
- Be sure you understand what they want you to do. Do they want you to bring the file current because they need to get their tax return done?
- Is their chart of account mapped out to give the client the right information? Are the lists and codes set up properly?
- Is the sales tax area properly set up? (You can look at the trial balance and see if it makes sense.)
As you go through their account, write bulleted notes of what needs to be fixed. Once you’ve completed your evaluation of the file, look at how much time it going to take – estimating it in 30-minute increments.
When you’re estimating your fees, it’s best to leave clean up projects open-ended by saying, “I expect this to take eight hours, but at the end of the week, I’ll give you an update. However, if something comes up that is going to make this estimate change, either up or down, I’ll contact you immediately. If we exceed these hours by 10% plus or minus, I’ll make an adjustment to the bill.”
Make sure this is clearly stated in your agreement with them. Give them a written report that tells what you heard them say they needed and what you see needs to be fixed so that the account is easy to work on in a go-forward basis.
Nobody likes surprises, and the most dangerous thing you can do is go ahead and do work that is going to change the estimate dramatically. Then you’re running the risk of not getting paid. Freelance bookkeepers must be in active communication during the cleanup phase.
Would you like to talk with me personally about how to focus on your specific challenges and find real-life solutions you can easily implement? Check out my 30-minute Laser Coaching Session. I understand what it’s like to be a freelance bookkeeper and want to help you get results.
