EP515: Jonathan Stark - Why Hourly Billing Is Holding Your Bookkeeping Firm Back

Michael Palmer: That was the hardest thing, is to not try and solve their problem in the sales interview. Just listen to the business case and then come up with clever ways to achieve that business case really as easily as you possibly can. So you're looking for smaller projects, not bigger projects. It's, it's a complete mind shift. You're listening to The Successful Bookkeeper with your host, Michael Palmer. Listen each week as inspiring guests share their secrets of success to help you increase your confidence, work smarter, and build a business you love. This episode of The Successful Bookkeeper is brought to you by purebookkeeping.com, the proven system to grow your bookkeeping business. Welcome back to The Successful Bookkeeper Podcast. I'm your host, Michael Palmer, and today's show is going to be, I believe, an amazing one. Our guest is the author of Hourly Billing Is Nuts. I should have said this episode is going to be nuts. Jonathan Stark, welcome to the show. Thanks. Thanks for having me. Great to be here. It's great to have you. And the minute I said hourly billing is nuts, I'm sure all of our listeners' ears perked up. And before we get into all of that, tell us a little bit about you. How did you end up doing what you're doing today?

Jonathan Stark (Jan 27th 2026): Sure. I'm from the software space, and in the software space, you may or may not know, there is a sort of prevalence of hourly billing for software development. And I was doing that at a firm in 2003, 2004, 2005, around then. And I got promoted to vice president, and that meant that I started doing one-on-ones with the other developers, and I would, you know, it was like if they wanted a raise, they'd have to ask me. I knew what their salaries were all of a sudden. And it occurred to me that our really best developers were paying the most money and they were really fast in getting things done quickly. And we weren't really making that much money on them. And then we had younger developers who were much more junior, not as fast. We're billing them out at the same rate. The clients were perfectly happy and we're making way more money on the junior developers. And I was like, that's weird, because if I was going to hire someone, I would— my instinct would be to hire the best developer I could get. Get. But the numbers, the financial incentive is such that I want to get people who are not that great, really slow, and can keep their clients happy through whatever good bedside manner or