Freelance Bookkeeper Spotlight on Derrick Storey

It’s been awhile since I’ve posted an interview with a fellow freelance bookkeeper for the TFB Spotlight – long overdue, in fact!

These interviews are where you’ll hear from grassroots freelance bookkeepers who are in the trenches building their businesses from the ground up. This interview is about 50 minutes in length, so it’s a great way to use your lunch hour to kick back and see what tips you can pick up from the experience of others running the same kind of business.

In this spotlight interview, get to know fellow freelance bookkeeper Derrick Storey, a veteran freelance virtual bookkeeper from New Zealand who has taken bold steps to transform his local bookkeeping service and proven that you can truly thrive no matter where your business is located when you work on a virtual basis!

Freelance Bookkeeper Derrick "DP" Storey

Connect with Derrick on LinkedIn

Visit Derrick's website

Download the audio MP3 for anytime listening: RIGHT CLICK HERE

Have a listen and let us know what you found most helpful about Derrick’s story in the comments below.

Resources Derrick Mentioned on the Call:

  • The Insider’s Guide to Your Own Virtual Bookkeeping Business – Online training and resources that show you how to start and quickly grow a freelance virtual bookkeeping business, with your first few clients in as little as 30 days
  • The Freelance Bookkeeper Premium Membership – Low-cost monthly training and community of freelance bookkeepers who want to take action and get results, one month at a time.
  • Xero – web-based bookkeeping software for “beautiful bookkeeping” services
  • Action Enforcer – desktop productivity software that is versatile and easy to use for maximizing your personal daily workflow


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Straight Talk About Bookkeeping Fees

bookkeeping fees dilemmaWhich is the “BEST” way to structure your bookkeeping fees…

  • Hourly Rate?
  • Flat Rate?
  • Standard Packages?
  • “Value-Based Billing”?

Most choose hourly.

The simple reason why most of us choose an hourly rate is because it’s just easier. We feel like we’re getting paid for the work we do, and clients follow our lead. Of course, this is often also how employees are paid, and that mindset has its own traps for both you and your clients.

Most of us have heard that we *should* offer packages or learn how to stop “trading hours for dollars” in order to be more profitable. But HOW to do that successfully has been vague and/or complicated. The lines between packaged services, flat-rate billing and so-called “Value-Based Billing” are rather blurred.

How can you know which method will work best for YOUR freelance bookkeeping business?

Here’s a quick rundown of the various ways bookkeepers have come up with setting their fees, and a quick-reference chart for matching those method and the services that work best with them, if you’re looking to try an alternative to hourly billing…

Packaged Fees

This is where you put together a specific set of services (a package) that clients choose from for a menu-type offering. Most often I’ve seen it done with three main choices (such as Bronze, Silver and Gold), each with their own base price. Some allow add-on customization. Pricing levels may also be based on number of transactions and bank / credit card accounts. This method gives the perception of buying bookkeeping services in the same way that physical products or online software services are sold. The client chooses the “size” that fits best for what they think they need, and puts in their order.

The way to come up with these packaged rates is often by categorizing typical services and volume levels based on experience or specialty. This type of fee structure is usually applied to regular month-to-month bookkeeping services.

While it’s a very popular fee model, not all freelance bookkeepers agree that packages work well for our types of services. (See QuickBooks Online advocate Stacy Kildal’s take on this issue)

Flat Rate Fees

Using flat rate fees is often a more flexible option for setting your rates with clients, and therefore, can be applied to most services a freelance bookkeeper might offer. It’s basically where you provide a flat dollar quote (or estimated range) for services, either on a monthly, quarterly, annual or project basis. There should also be a written engagement letter that spells out the specific expectations and terms involved. Most often these rates are set based on a calculation of estimated hours with some wiggle room for unforeseen elements or a percentage of scope creep or other anticipated costs.

I personally find this to be the most effective method to use for fixed price fees because it is easily customizable to the client’s specific situation. Clients who initially must be offered an hourly fee (such as shoebox clients or those needing data file cleanup with no initial access to records) can later easily (and confidently) be transitioned to this type of fee model once more information and/or experience with that client has been established.

“Value-Based Billing” Fees

This pricing method is newer than the previous two in the bookkeeping services sphere, and in concept, is popular. However, in practical usage, the jury is still out as to whether it is practical for freelance bookkeepers. The idea is to price services based on the value that results for the client’s business, not based on hours or effort expended by the bookkeeper. This pricing method has been used within the legal profession and high-end business consultants. I’m not so sure it translates well for bookkeepers.

Clients value the services we provide in varying degrees and this may be a method for upgrading the quality of the clients you serve, assuming you are specializing in a high-end industry or possibly mid-market clients. But the method for coming up with a fee is rather subjective and can be quite time-consuming, since the client needs to buy into the idea of fees being based on promised results (which can be tricky for a bookkeeper). This type of structure may be suitable for clean-up projects done for a specific purpose (such as a tax audit), goal-based consulting or possibly training services, but I honestly don’t see it working well for regular month-to-month bookkeeping.

Flat Fee Pricing Models to Services Matrix

Typical services and the type of pricing models as an alternative to hourly billing:

Packaged Services

Flat-Rate Fee

“Value-Based Billing”

Monthly Bookkeeping

Monthly Bookkeeping

Bookkeeping Cleanup / Catch-up

AP / AR Services

AP / AR Services

Virtual CFO

Payroll Services

Payroll Services

Periodic Check-Up Services

Tax Prep Services

Tax Prep Services

Business Consulting

Software Training

Software Training (Custom)


Bookkeeping Cleanup / Catch-up


Periodic Check-Up Services


Business Consulting


So which types of pricing models have you been using? Do you charge only by the hour for your services? Or are you using some type of a flat-fee pricing model? I personally use both the packaged and the flat-fee structures, and occasionally, still hourly fees as well.

There is no “right” method, since it’s your business and you get to decide how you want to charge for your services. But if you’d like to explore a deeper dive into packaging your services and setting your rates, you may want to join us this month in TFB Premium, since the next lesson is all about How to Package Your Virtual Bookkeeping Services


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4 Big Virtual Bookkeeping Roadblocks… and How to Get Past Them

virtual_bookkeeping_roadblocksWithout a doubt, the hottest thing in the freelance bookkeeping world is taking your services online and working on a virtual basis with your clients. Nearly all of us recognize immediately the advantages to working from your home office instead of traveling to meet or service your clients’ bookkeeping needs on-site.

Just a few of the delicious advantages are…

* Geographical boundaries are expanded. You can work with clients no matter where they are located, as long as they have a high-speed Internet connection, which the vast majority of clients now have.

* More efficient and profitable. You can work more efficiently and rack up more billable hours because you’re not wasting time traveling and can batch your work for streamlined workflow from one client to the next.

* More flexible schedule. You are not confined to “normal working hours” to get your client work done. That means you can be more available to your family, as well as work during the time of day when you are at your best.

But these advantages and freedoms also creates some new challenges that can be easily overlooked until you’re already in the thick of it. Working through the Internet can be tricky. Let’s explore the top 4 virtual bookkeeping challenges we face so you can get past them in your  own business and set yourself up for true online success.

#1 – Clients

Without clients you don’t have a business. Yet there will definitely be clients you wish you didn’t have. The good news is, you don’t have to work with clients you don’t like! Talk to your boss (you!) about the problem and get permission to work only with the clients you WANT to work with. If you find that you’ve gained a client or two that isn’t a good fit, decide on a cut-off date for the relationship to end. Do what you said you’d do for each of them, and then refer them to to a fellow bookkeeper who would be happy to have the as a new client(s).

In fact, this is the very reason that I recommend using a “win-win or no deal” clause in your engagement letters for ALL clients. (You ARE using engagement letters with all your clients, right?) It works as your insurance policy from ever getting stuck with a client that is, or over time becomes, a PITA client.

Other steps that protect you from getting stuck with undesirable clients in the first place include…

* Defining an “Ideal Client” profile and keeping that handy whenever a new prospective client calls
* Defining one or two specialty services (so you’re not doing work you don’t want to do)
* Create internal systems to support good client relationships

#2 – Cash flow

As a service provider you only make money when you perform the bookkeeping work you’ve been hired to do, whether month-to-month work or projects. This can make cash flow a real challenge. If your cash flow starts to dry up, you can get yourself into trouble fast.

Here are a couple strategies that can help…

  • Treat yourself as one of your clients and set up a business budget that allows for business savings. This will give you a cushion to work with if / when you hit a slow patch. You’ll also want to allow some funds to support consistent marketing so you can keep your pipeline of new client prospects full.
  • Make it easy for clients to pay you quickly and regularly. If you aren’t already accepting e-check and credit card payments online, set up a PayPal account for your business and switch monthly clients to a flat fee. That way you can use the “subscription” function for automatic payments. This is a win-win situation for both you and your clients.

#3 – Proactive Communication

When I hear from virtual bookkeepers who complain constantly about their clients, I listen for what they see the problems are. Often it boils down to the bookkeeper waiting for the client to lead the relationship, especially when it comes to getting the information needed to complete the monthly payroll or bookkeeping. What doesn’t seem to occur to them is that WE are the ones who should be taking the initiative to foster frequent and productive communication with our clients!

Here are a few simple ways to immediately shift from reactive bookkeeping clerk to proactive bookkeeping professional…

  • Pay attention to each client’s preferred mode of communication and use that primarily (you should also note it on your internal client files as well for future reference when you delegate the client work to your staff)
  • Set a specific schedule for regularly communicating with each client to assure that work gets done on time without unnecessary log jams due to lack of communication. That is part of what the clients is paying you for – to help keep them on track!
  • Pick up the phone when necessary to handle urgent matters quickly and professionally. Remember your clients are busy people and have many other demands pulling at them too.

#4 – Time Management

When you run your business from home, you get to set your own working hours. But if you’re not good at managing your time, you could end up working around the clock. In addition to client work, you have a business to run! That means administrative tasks like invoicing, paying your own bills and email are added to your daily to do list. Add to that family responsibilities and you have a schedule bursting at the seams!

Here are a couple tips for staying focused and productive…

  • First thing in the morning (before reading email) identify the most important 3-4 tasks you’ll focus on for the day (no matter what) – then get the first task done immediately!
  • Before approaching a task, estimate how long it will take you to get it done, and then use a countdown timer to help you stay focused. (This can even be fun!)

Personally I use a cool tool called “Action Enforcer” to do both of these at the same time.

There’s no question about it! The benefits of working virtually far outweigh the challenges. By taking just a few simple actions, you can almost completely remove these success roadblocks and build your own highly profitable virtual bookkeeping business.

By the way, if the idea of setting up a virtual freelance bookkeeping business is something you’d like to take a deeper dive into, then you’ll want to join hundreds of other freelance bookkeepers who have taken their business online and check out my full-blown training course.

The Insider’s Guide to Your Own Virtual Bookkeeping Business

If you’re already working virtually, but feel like you need to crack the code to success, you find The Freelance Bookkeeper Success Formula a short-cut to getting what you want from your business.


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Virtual Bookkeeping: Is Data Entry a Thing of the Past?

bookkeeper_data_entryMore and more freelance bookkeepers are using online tools and automation to provide virtual bookkeeping services. The fast advances in technology is having a big impact on how we get the bookkeeping done for our clients. In fact, the goal of some virtual bookkeeping practices is zero data entry.

Is that really possible, and what impact does that have on your business?

Since I’ve run my own business 100% virtually since 2003, I get lots of questions about making the switch to online tools to get the books done more efficiently. In fact recently, one of my students asked if there is a way to scan client’s receipts directly into QuickBooks.

While I don’t know of a tool (yet) that is quite that streamlined, at least not “out of the box,” here’s what you’ll find available to save on data entry time (some of these may be built into software you’re already using!)

There are three basic categories of tools: Scanning solutions, bank download solutions, and what I call bridging solutions. Let’s take a brief look at each of these.

Scanning Solutions

Running with this idea of scanning receipts, there are tools that can scan your receipts and using OCR (optical character recognition) technology, they extract the needed information and summarize it for your review and manipulation. Some of them do integrate directly with QuickBooks.

A couple examples of these are ScanWriter and Shoeboxed.

ScanWriter is a very powerful tool and works with all kinds of paper-based data that you want converted to transactions and imported into QuickBooks. The downsides to this solution for solo freelancers is the cost, the set up and the learning curve. If you have a client who has a large volume of transactions on a month-to-month basis (or a big catch-up bookkeeping project), this is a great solution and worth the investment of time and expense. But if you serve small clients and documents are not used consistently, this probably won’t fit your needs (or budget).

Shoeboxed has come a long way since its humble beginnings and is worth taking a look at if you have clients who are still paper-based for the majority of their transactions and are resistant to participating in the conversion to digital information. Shoeboxed even makes the scanning easy because they will do it for you! Simply send them your paper source documents and they will scan them (in a secure environment), use OCR technology to extract the information and now they will even send it to QuickBooks. Again, I recommend this service if you have regular month-to-month clients, since it is a subscription based service. The cost can easily be built into your fees.

Bank Download Solutions

QuickBooks, (and I would guess other) desktop software, makes it possible for you to pull your client’s bank transactions into the bookkeeping records to eliminate the initial data entry. Most online bookkeeping software programs do the same (many of them much more elegantly than the desktop programs, in my opinion). A few examples of online bookkeeping that works well with bank downloads are QuickBooks Online, Xero, Wave and FreshBooks.

With more and more clients doing the vast majority of their transactions without paper, this is a great way to get the initial transactions recorded. You may, of course, still need additional documentation. This is especially so when clients use bank debit cards, since the banks often provide precious little information about these type of expenses / withdrawals.

If you are not using bank downloads yet, this would be your best first step toward reducing much of your month-to-month bookkeeping data entry.

Bridging Solutions

Some transactions are not as easily linked to the bookkeeping records. Especially when you are dealing with desktop software. An immediate example that comes to mind is PayPal. Many businesses use it, but it’s not always an easy thing to get the many transactions (especially if your clients use it for online purchases and/or sales) into the desktop software. PayPal themselves provide a “simple” method to pull the data into QuickBooks, though honestly, I would NOT recommend it. It over-simplifies the income and expense reporting and would need a good deal of massaging for meaningful use of that information.

A tool that is invaluable as a bridge into QuickBooks is the Transaction Pro Importer. While there is a bit of a learning curve and set up, this tool (available for both for QuickBooks desktop and Online versions) will help you to pull in electronic data in exactly the manner you want it to appear in your QuickBooks file. This is a QuickBooks-exclusive tool and will not work for other software programs.

If you are using other software for which you’d like to find a more automated way to pull in transactions without data entry, you may need to do some searching to find tools that will serve as the gateway to your bookkeeping program and the transaction data source. With so many apps available, though, it’s worth the search!

What Technology Cannot Do (not yet anyway)

With data entry going away, does that mean that the need for bookkeepers will also disappear?

The answer is a resounding NO! While technology is removing the need for mindlessly typing in data, even with it getting “smarter” at an astounding rate, human oversight and management is still needed! There will continue to be adjustments and corrections needed. As humans, we also are the only ones who can put meaning into the financial information and understand the actions that need to be taken because of what the numbers are telling us.

That, of course, requires us to step up our game as bookkeepers and use the time we save with automation to provide higher level services to our clients. And we are in the perfect position to do so! In fact, I predict that the most successful freelance bookkeepers will be those who provide management and consulting add-on services to their clients.

That’s the direction I’m headed in with my own business, and it’s also the topic of this month’s training lesson in The Freelance Bookkeeper Premium trainings: Client Budgeting, Forecasts & Value-Added Services

What about you? Have you found ways to eliminate data entry in your business (or at least streamline it)? What have you found most helpful with the modern technology in your freelance bookkeeping practice?


Virtual Bookkeeping: Working With Clients Remotely

virtual-bookkeepingI often get the question from traditional freelance bookkeepers and those considering starting a freelance bookkeeping business regarding virtual bookkeeping…

“How do you provide bookkeeping services when you are not at the client’s location?”

In fact, just this past weekend I got an inquiry about whether it is viable to work with clients using cloud-based bookkeeping software while living abroad. And my answer to that question was, Absolutely!

Why You Want to Work Remotely With Clients

Most freelance bookkeepers need little convincing that working from their own offices instead of traveling to the client’s location (whether across the street or across the state or beyond) has lots of benefits. But here are just a few of them…

  • Convenience to work on the client’s books on your own schedule
  • Save time and expenses associated with travel
  • Maximize your billable capacity, since the time savings allows you to serve more clients

What are the Challenges?

As with any situation, working on a virtual basis does have challenges, but these are beginning to pale due to improvements in technology and client trust of online productivity methods.

For you, as with anything new, there will be at least some learning curve and adjustment of your workflow procedures. But the rewards are well worth it and staying up to date on new ways to work with clients via the Internet also positions you as a true professional and may even allow you to raise your fees.

How to Do It

There are three basic ways to work virtually with your clients that leverages cloud technology (with a fourth way, that is really a return to days of old, which I’ll mention briefly)

  1. Remotely connect to your client’s computer to perform the bookkeeping, nearly in the same way as you do now if you work on site.
  2. Work via cloud-based bookkeeping software through a web browser with your own unique and secure log in.
  3. Work using the same desktop software you’re used to, but accessing it via the web using a hosted virtual desktop.

The possible 4th alternative is to simply provide complete bookkeeping for your clients where you produce the monthly reports and consulting. They won’t have access to the books. To do this you could use either cloud-based or desktop software.

This last method is a return to the “olden days” of when the accountant (or bookkeeper) took care of everything and the client had no access to their bookkeeping records at all. In some cases, clients have decided that they’d rather not be doing the bookkeeping, but would rather leave that to the professional (you). All they need are the financial reports to keep tabs on their business.

In my own business, I’ve been working with clients 100% virtually since 2003. Several years ago, that usually meant we used the remote connection option (since most of my clients are very small businesses). More recently, my clients are working more and more with online bookkeeping programs (I support QuickBooks Online, Wave and FreshBooks). I have only one client that uses a hosted desktop, but this is also a very popular option for those who need the power of desktop software and the convenience of anytime, anywhere access.

Which virtual bookkeeping options are right for you? Much of that depends on the type of clients you serve and the functionality that will work best for both you and your clients. If you’d like to learn how to move your bookkeeping services to the cloud, or start your new virtual bookkeeping business for 2014, now is the perfect time!

To help more bookkeepers move to working virtually with their client… and even help find NEW clients who want to work via the Internet, join me in my popular Insider’s Guide to Your Own Virtual Bookkeeping Business

Are you already working virtually? What methods have worked best for you and your clients?

  • July 2014
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