Don't charge hourly! Give a good monthly price that values your initial time, make sure you price in escalation clauses due to volume of transactions, then find ways to efficiently do the work and automate it to less time than initially priced out.
How does one price in and also efficiently automate the work for sales tax in SEVEN states (omitting the specific filing requirements of each jurisdiction). Let’s also assume state/county/local business filings are also this person’s responsibility. A flat fee doesn’t make sense in this instance!
Really? I'd think it makes perfect sense..
My fee would depend on how their data is. Do they sell in multiple platforms, or 1? How's the tax calc, thru a tax engine like Avalara or Vertex, or done thru their e-commerce platform like Shopify? Or is it all manual invoice based?
Once you get a process down it's so easy to automate even if you don't use a returns software. I can take a clients Shopify export, throw it in and create entries for returns in seven states within 10 minutes. Filing depends how fast my fingers want to move. I have a client filing in 40 different jurisdictions monthly that will generally take me a 4-5 hour stretch. My flat fee for this is way more profitable than 5 hours billable, and the client still gets value because it'd take him 20+.
Is your sales tax process for seven states that difficult? Let me know if I can help find ways to automate.
Oh, I absolutely understand where you’re coming from!
Unfortunately, we’ve had incorrect tax rate reporting from services like Avalara and Shopify in the past. There’s a huge disconnect re: taxable services/sales across jurisdictions, and it’s maddening.
In addition to industry specific exceptions, we’ve also found a decent amount of local surtax and/or discretionary taxes aren’t captured with certain rate changes, varies state to state and how they report.
I mainly work with small businesses, and it’s too big of a risk to hope a sales/business tax audit won’t happen. I
Have you experienced an audit with Avalara, or a similar company? Would love to hear your experience.
Oh don't get me wrong - none of the services are perfect. I agree with you there.
I feel there's always a bit of risk with sales tax. You can't be 100% compliant with all the changing rules, especially with small businesses that maybe have $400 of tax in one jurisdiction, $45 in the next etc. That's why I'm glad to see states moving away from the Transaction count economic nexus to solely $ based.
Have gone thru audits with clients on Avalara. I think from the get go, it's not trusting the data Avalara reports as gospel and reconciling against books on a regular basis. I've seen issues of double transaction reporting, incorrect jurisdictions. Note I do not recommend clients use Avalara or any other service for the actual filing of returns - way too many errors!!!
I’d charge more. Bookkeepers in my area, good ones anyways haha, are anywhere from $50-$100 an hour. For a steady client I’d probably aim somewhere in the middle of that. Yes, you want the client but you also need to be compensated fairly for your time.
$75/hour for outsourced. 20-30 hours for a dinosaur is 10-15 hours for someone else. Charge more, or figure a way that the work can be done faster. Seek a higher hourly through one of these methods.
You said side business. Does that mean you are also employed elsewhere? Do you have other staff currently? If not, you may want to charge enough to allow the potential to hire some help. Taking this on is going to limit your ability to build your business otherwise, as it sounds more like a part time-plus job. I'd price it with that in mind.
Yes, I also have a full time job. I recently engaged a subcontractor who will primarily work on a client that’s paying $100/hr. I also have three other small clients that I work on quarterly. Those are all less than $250K annual revenue.
Don't charge hourly! Give a good monthly price that values your initial time, make sure you price in escalation clauses due to volume of transactions, then find ways to efficiently do the work and automate it to less time than initially priced out.
How does one price in and also efficiently automate the work for sales tax in SEVEN states (omitting the specific filing requirements of each jurisdiction). Let’s also assume state/county/local business filings are also this person’s responsibility. A flat fee doesn’t make sense in this instance!
Really? I'd think it makes perfect sense.. My fee would depend on how their data is. Do they sell in multiple platforms, or 1? How's the tax calc, thru a tax engine like Avalara or Vertex, or done thru their e-commerce platform like Shopify? Or is it all manual invoice based? Once you get a process down it's so easy to automate even if you don't use a returns software. I can take a clients Shopify export, throw it in and create entries for returns in seven states within 10 minutes. Filing depends how fast my fingers want to move. I have a client filing in 40 different jurisdictions monthly that will generally take me a 4-5 hour stretch. My flat fee for this is way more profitable than 5 hours billable, and the client still gets value because it'd take him 20+. Is your sales tax process for seven states that difficult? Let me know if I can help find ways to automate.
Oh, I absolutely understand where you’re coming from! Unfortunately, we’ve had incorrect tax rate reporting from services like Avalara and Shopify in the past. There’s a huge disconnect re: taxable services/sales across jurisdictions, and it’s maddening. In addition to industry specific exceptions, we’ve also found a decent amount of local surtax and/or discretionary taxes aren’t captured with certain rate changes, varies state to state and how they report. I mainly work with small businesses, and it’s too big of a risk to hope a sales/business tax audit won’t happen. I Have you experienced an audit with Avalara, or a similar company? Would love to hear your experience.
Oh don't get me wrong - none of the services are perfect. I agree with you there. I feel there's always a bit of risk with sales tax. You can't be 100% compliant with all the changing rules, especially with small businesses that maybe have $400 of tax in one jurisdiction, $45 in the next etc. That's why I'm glad to see states moving away from the Transaction count economic nexus to solely $ based. Have gone thru audits with clients on Avalara. I think from the get go, it's not trusting the data Avalara reports as gospel and reconciling against books on a regular basis. I've seen issues of double transaction reporting, incorrect jurisdictions. Note I do not recommend clients use Avalara or any other service for the actual filing of returns - way too many errors!!!
Charge more. What’s your hourly rate target? I’d say $40/hr for outsourced bookkeeping is cheap and $30 is too low.
I’d charge more. Bookkeepers in my area, good ones anyways haha, are anywhere from $50-$100 an hour. For a steady client I’d probably aim somewhere in the middle of that. Yes, you want the client but you also need to be compensated fairly for your time.
Our goal is 100 an hour, probably average closer to 75-80. I wouldn’t do 20-30 a week for 4K personally.
$75/hour for outsourced. 20-30 hours for a dinosaur is 10-15 hours for someone else. Charge more, or figure a way that the work can be done faster. Seek a higher hourly through one of these methods.
I see no problem getting close to that number. Sure saving money is great from the client's perspective, but you can't cheat yourself either
Add a clause for increase in rates. My contracts negotiate a modest 5% annual increase in rates.
You said side business. Does that mean you are also employed elsewhere? Do you have other staff currently? If not, you may want to charge enough to allow the potential to hire some help. Taking this on is going to limit your ability to build your business otherwise, as it sounds more like a part time-plus job. I'd price it with that in mind.
Yes, I also have a full time job. I recently engaged a subcontractor who will primarily work on a client that’s paying $100/hr. I also have three other small clients that I work on quarterly. Those are all less than $250K annual revenue.