Question 1

What is an invoice in bookkeeping?

Accepted Answer

In bookkeeping, an invoice is a formal document requesting payment for services or goods provided. For bookkeepers specifically, it details the bookkeeping services performed (like monthly bookkeeping, reconciliations, payroll processing), hours worked or flat fees, payment terms, and total amount due. Invoices serve as both a payment request and an official record for accounts receivable in both the bookkeeper's and client's accounting systems.

Question 2

Does a bookkeeper invoice?

Accepted Answer

Yes, bookkeepers absolutely invoice their clients for services provided. Professional bookkeepers invoice for services like monthly bookkeeping, bank reconciliations, payroll processing, financial reporting, and consulting. Most bookkeepers invoice monthly for retainer clients or bi-weekly/monthly for hourly work. Sending timely, detailed invoices is essential for maintaining healthy cash flow in a bookkeeping practice.

Question 3

What is 3-way invoicing?

Accepted Answer

3-way invoicing (also called 3-way matching) is an accounts payable control process where three documents are compared before payment: the purchase order (what was ordered), the invoice from the supplier (what is being billed), and the receiving report (what was actually received). All three must match in quantity, price, and terms before payment is approved. This control helps prevent overpayments, duplicate payments, and fraud. Bookkeepers often implement this process for clients with significant purchasing activity.

Question 4

How should bookkeepers price their services?

Accepted Answer

Bookkeepers typically use three pricing models: hourly rates (ranging from $30-$150+ per hour depending on experience and location), monthly retainers based on transaction volume or service level (like $300-$1,500+ per month), or project-based pricing for cleanup work. Many bookkeepers combine models, using monthly retainers for ongoing clients and hourly billing for additional services outside the standard scope.

Question 5

Should I charge sales tax on bookkeeping services?

Accepted Answer

Whether you charge sales tax, GST, or VAT on bookkeeping services depends on your location and local regulations. In many US states, professional bookkeeping services are not subject to sales tax, but some states do require it. In Canada, GST/HST generally applies. In the EU, VAT typically applies to accounting services. Always consult with a tax professional or your local tax authority to ensure you're compliant with your specific jurisdiction's requirements.

Question 6

What payment terms should bookkeepers use?

Accepted Answer

Most bookkeepers use Net 15 or Net 30 payment terms (payment due within 15 or 30 days of invoice date). For established clients with good payment history, Net 30 is common. For new clients or smaller businesses, Net 15 or even Due Upon Receipt may be more appropriate. Always include late payment fees in your terms (typically 1.5% per month) and discuss payment expectations in your engagement letter before starting work.

Question 7

How often should bookkeepers invoice clients?

Accepted Answer

For monthly retainer clients, invoice at the beginning or end of each month on a consistent date. For hourly bookkeeping work, invoice bi-weekly or monthly depending on hours worked and your cash flow needs. For project work like bookkeeping cleanup, invoice upon completion or at predetermined milestones. Consistency is key - clients appreciate predictable billing cycles and are more likely to pay on time.

Question 8

What should bookkeepers include on their invoices?

Accepted Answer

Professional bookkeeping invoices should include: your business name and contact information, client name and details, unique invoice number, invoice date and due date, detailed service descriptions (monthly bookkeeping, reconciliations, hours worked), rates and amounts, subtotal, any applicable taxes, total amount due, payment terms, accepted payment methods, and your business tax ID or registration number if required.

Question 9

Can I customize this bookkeeping invoice template?

Accepted Answer

Yes, the bookkeeping invoice template is fully customizable. Add your logo and business branding, adjust service descriptions for your specific offerings, modify hourly rates or package pricing, add or remove tax fields based on your location, include your business license numbers, customize payment terms, and adjust the layout. The Excel and Word formats are especially easy to edit while the PDF works great as a final version.

Question 10

How do I handle retainer invoicing as a bookkeeper?

Accepted Answer

For retainer clients, invoice at the beginning of each billing period with a clear description like "Monthly bookkeeping retainer - March 2024 (includes up to 150 transactions, bank reconciliation, and monthly financial statements)". If clients exceed included transactions or require additional services, add separate line items for overage charges. Many bookkeepers also show hours used vs. hours included for transparency.

Question 11

Should bookkeepers require deposits from new clients?

Accepted Answer

Many bookkeepers require a deposit or first month payment upfront from new clients, especially for larger cleanup projects or businesses with complex needs. A deposit (typically first month service fee or 25-50% of project estimate) protects your time investment, demonstrates client commitment, and filters out non-serious inquiries. Most professional clients expect and respect this practice.

Question 12

How do I invoice for bookkeeping cleanup work?

Accepted Answer

For cleanup projects, most bookkeepers estimate hours required and either provide a project-based flat fee or an hourly estimate with a cap. Invoice at completion for smaller cleanups, or at milestones for larger projects (like after cleaning each month of backlog). Be specific in descriptions: "Bookkeeping cleanup - January 2023 through June 2023 (6 months): transaction entry, categorization, and reconciliation - 42 hours @ $75/hour."

Question 13

What software integrations help with bookkeeping invoicing?

Accepted Answer

Many bookkeepers use practice management software that integrates with QuickBooks, Xero, or other accounting platforms to streamline invoicing. Popular options include QuickBooks Online for invoicing (which syncs with your own books), Receipt Bank or Dext for expense tracking, time tracking tools like Toggl or Harvest, and specialized bookkeeping practice management platforms that handle client communication, time tracking, and invoicing in one place.

Question 14

How do I handle clients who dispute bookkeeping invoices?

Accepted Answer

When a client questions an invoice, respond promptly and professionally. Provide detailed time logs or service documentation showing work completed. Reference your original engagement letter or proposal for scope clarity. Most disputes arise from misunderstandings about scope, so detailed service descriptions prevent issues. For future prevention, send monthly progress summaries and get written approval before performing work outside the original scope.

Question 15

Should bookkeepers send receipts after payment?

Accepted Answer

Yes, always send a receipt or payment confirmation after receiving payment. Mark the original invoice as "Paid" with payment date and method, or send a separate receipt document. This closes the loop professionally, provides both parties with payment proof, and helps with record-keeping. Many accounting software platforms automatically generate and send receipts upon payment.

Free Bookkeeping Invoice Template

Download Your Free Bookkeeping Invoice Template

Excel Template

PDF Template

Word Template

Complete Bookkeeping Invoice Solution

Flexible Billing Structures

Multiple File Formats

Detailed Service Descriptions

Tax Compliance Ready

Professional Accounting Format

Payment Terms & Tracking

Common Bookkeeping Services to Invoice

Monthly Bookkeeping Services

Payroll Services

Tax Services

Financial Reporting

Cleanup & Catch-Up Work

Consulting & Advisory

Specialized Services

Retainer Packages

Bookkeeping Invoicing Best Practices

Invoice on a Consistent Schedule

Use Clear Service Descriptions

Separate Different Service Types

Set Clear Payment Terms Upfront

Track Time Accurately

Include Tax Information Properly

Offer Multiple Payment Options

Send Invoices Promptly

Use Professional Invoice Numbering

Add Value-Based Context

Document Scope Changes

Send Payment Reminders Professionally

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