Bookkeeping is one of the most foundational practices in any business. It helps you file taxes, make sound business decisions, and so much more. Consequently, it’s easy to understand why there are nearly 700,000 bookkeepers employed in the US.
Even with today’s technology, hiring a bookkeeper is still well worth it for most businesses. So, how much does bookkeeping cost, and how can I determine what’s right for my business? We’re glad you asked!
What Do Bookkeeping Services Include?
While this largely depends on the agency or professional you choose, you can expect the essentials. Bookkeepers keep records of your finances by tracking expenses and revenue throughout the fiscal year. These services likely include:
- Processing vendor bills and other payments
- Tracking credit card transactions
- Assisting in the collection of past-due invoices
- Preparing customer invoices and updating related deposits
- Reconciling bank, creditor, and/or merchant accounts
- Posting and tracking payroll
Some bookkeepers may offer more or less, but these are the most common bookkeeping services. This helps with reporting, tax filing, wage management, and making financial decisions.
Are There Different Types of Bookkeepers?
Yes. Standard bookkeepers “keep the books”, meaning that they update and maintain your financial records. Their roles are quite limited in this respect.
However, there are also full-charge bookkeepers. These may take on the roles of accountants, offering more details and insights into your finances. Depending on your needs, this may be the right fit for your business.
How Do I Know Which Type Is Right For Me?
Remember, bookkeepers are different from accountants. Some may have accounting experience or education, which could allow them to offer business advice. However, you can’t expect this from every bookkeeper.
Therefore, if you’re deciding between a bookkeeper or an accountant, determine your needs. Do you need someone to track your financial records or to provide detailed insight and analysis of your business finances and operations? If you chose the former, a bookkeeper is right for you!
How Are Bookkeepers Paid?
Bookkeeping rates and payment structures vary. It largely depends on the type of bookkeeper(s) you employ. Some may prefer to be on your payroll, while others will prefer direct payment through check or electronic transfer.
Moreover, their experience and employment status will play a major role in how much they’re paid. Let’s talk about that.
How Much Does Bookkeeping Cost?
The cost of bookkeeping services varies widely depending on experience, location, and other factors. However, the biggest determining factor is whether you outsource or hire a full-time bookkeeper. Let’s break down the different structures and find the lowest bookkeeping cost per month!
In-House Bookkeeper Rates
Hiring a full-time bookkeeper is quite common. Whether you’re hiring an administrative assistant with bookkeeping experience or a full-time bookkeeper, you should expect to pay between $18 and $25 per hour or $37,440 to $52,000 per year.
On top of that, you will also need to pay for benefits for a full-time bookkeeper. If you have a part-time bookkeeper, then this depends on your company’s policy, but you still may need to cover paid time off, sick time, and more depending on local laws.
Still, a full-time bookkeeper may require health, dental, and vision insurance, a retirement plan, and more. Then, there’s liability insurance, office space, and other overhead expenses. This could add up to thousands more each year in additional expenses.
Freelance Bookkeeper Rates
Freelancers are one of the most common options for small businesses, as bookkeeping can be done remotely. While the average freelance bookkeeper rate is $37 per hour, you should expect to pay a freelance bookkeeper anywhere from $25 to $50 per hour.
However, some freelance bookkeepers will charge based on the size of your project or for certain services. Around tax time, you should expect to pay a little more if you’re playing catch-up.
Generally speaking, a small business with a normal amount of accounts should expect to pay anywhere from $500 to $2,500 a month for bookkeeping services. Still, this depends entirely upon the freelancer’s rates.
Bookkeeping Agency Rates
Finally, hiring a bookkeeping agency or accounting firm to manage your books may be the least expensive option. Typically, you’ll pay a flat rate each month for your services. This depends on the size of your business and the rates offered by the agency.
However, outsourcing tends to be the most economical option. Essentially, you share the costs of bookkeepers with other businesses like yours without sacrificing the quality of your services.
Overall, you could expect to pay anywhere from $250 to $2000 each month for outsourced bookkeeping services. The best way to find out is to reach out!
Also, agencies may offer other services. For example, if you need help with payroll services, an accounting firm can help with that.
On top of that, you can always have a point of contact. An agency will be the most responsive, giving you around-the-clock access to a team of dedicated bookkeepers. This is the best for when you need accounting information, as you’ll have access to a diverse team of knowledgeable professionals.
Get Help With Your Business Needs Today
Now that we’ve answered the question “how much does bookkeeping cost?”, you can make an informed decision as to what’s right for your business. Every enterprise is different, so choose what’s best for your needs and get your business ready for tax time!
Stay up to date with our latest tips for your business, and don’t hesitate to contact us with any questions or for help with your bookkeeping needs!