In the bustling world of business, keeping the books in order is as necessary as having a strong steering wheel in a car. Without it, everything can quickly spin out of control.
However, as a business owner, you may wonder, “How much does a bookkeeper cost?” It’s a valid concern, especially when balancing budgets is a priority. Fortunately, just like you can opt for full-time, part-time, or outsourced financial help, bookkeeping services offer flexible options to fit your needs and budget. And while hiring full-time bookkeeping staff can be pricey, there are affordable solutions available that don’t compromise on quality.
But before we dive into the numbers, let’s explore the pricing models and the factors that affect how much do I charge for bookkeeping services. Stick with us, and we’ll break it all down for you.
What is Bookkeeping?
Bookkeeping is the process of recording and organizing all the financial transactions of a business. This includes tracking income, expenses, and other financial activities to ensure accurate records.
Bookkeepers play an important role in maintaining a business’s financial order by documenting every transaction correctly. They help businesses manage their day-to-day financial activities, providing essential financial reports that offer insights into the company’s overall health.
Understanding how much do bookkeepers make can also give you a better idea of what to expect in terms of pricing for these services.
Typical Duties of a Bookkeeper
Knowing the typical duties of a bookkeeper highlights how these important tasks ensure your business’s financial stability. From managing expenses and invoices to maintaining accurate records and providing key financial insights.
- Ensuring all business expenses, such as rent, utilities, and vendor payments, are paid on time.
- Creating and sending invoices to clients for payment.
- Recording all financial transactions in a journal or ledger, ensuring every financial activity is properly documented.
- Generating weekly or monthly reporting to monitor the business’s financial health.
- Monitoring and managing the age of invoices and payments to ensure timely collections and payments.
- Overseeing the inflow and outflow of cash to maintain a healthy cash balance.
- Creating reports tailored to the specific needs of the business.
- Preparing and managing 1099 forms for contractors.
- Managing employee payroll, ensuring timely and accurate payment.
The scope of these duties can also shed light on how much does bookkeepers earn, as their compensation often reflects the range and complexity of tasks they handle. This can help you understand the financial investment required for professional bookkeeping services and how it aligns with the value they provide.
What Bookkeepers Typically Don’t Do?
While bookkeepers are essential for maintaining day-to-day financial operations, some tasks generally fall outside their scope:
- Bookkeepers do not typically handle 990 tax form preparation, which is specific to tax-exempt organizations and usually falls under an accountant’s responsibilities.
- Forecasting services that involve predicting future financial performance based on historical data often require the expertise of an accountant.
- Complex financial analysis goes beyond the scope of a bookkeeper’s duties and typically requires the skills of an accountant.
- Payroll taxes, including their calculation and filing, are usually managed by a tax specialist or accountant rather than a bookkeeper.
- Formal financial audits are conducted by certified auditors, not by bookkeepers.
- Collections for overdue payments are generally handled by specialized collection services, not bookkeepers.
At Focus CPA Firm, we provide support for these areas with our skilled team of accountants and financial experts. Additionally, we offer comprehensive accounting services for small businesses and virtual CFO services to assist with more complex financial needs and strategic decisions.
Also Read: What Does a Bookkeeper Do for Your Business?
Understanding How Bookkeepers Charge for Their Services
Bookkeepers offer various fee structures depending on the nature of the work and the needs of the business. If you’re wondering how much do bookkeepers charge, it’s important to know that they generally charge in three main ways:
Hourly Rates
Many bookkeepers charge by the hour, with the average bookkeeper hourly rate ranging from $40 to $100, depending on their experience and the complexity of the work. This option is flexible for businesses with fluctuating bookkeeping needs or smaller workloads.
Fixed Monthly Rates
For businesses with regular bookkeeping needs, a fixed monthly fee provides predictable costs. If you’re wondering how much does a bookkeeper cost per month, the monthly fee usually ranges from $200 for part-time services to $5,800 for full-time services. This pricing model is ideal for businesses with consistent transaction volumes and ongoing bookkeeping requirements.
Flat Rate Per Project
If you only need help occasionally—such as setting up accounting systems or organizing financial records—hiring a bookkeeper on a per-project basis can be cost-effective. Project-based rates typically range from $500 to $2,500 depending on the scope of the work.
Percentage of Sales
Some bookkeepers charge based on a percentage of your sales, usually between 1-2%. This pricing model is often used by businesses with high sales volumes and fewer transactions, such as retail businesses that sell physical products. This ensures that bookkeeping costs scale with your revenue.
Understanding Pricing Models Based on Workload for Bookkeeping Services
Choosing the right level of bookkeeping support depends largely on the size and complexity of your business. Here’s a breakdown of the different options:
Part-Time Bookkeeper
Ideal for individuals or small businesses with simple needs, a part-time bookkeeper can handle basic services like invoicing, data entry, and occasional reporting. Part-time bookkeepers typically charge between $200 and $1,000+ per month, depending on the hours worked and the specific services required. This option works well for businesses that only need support a few times per month or for one-off projects.
Full-Time Bookkeeper
Larger businesses with more complex operations may need a full-time or full-service bookkeeper. Full-time bookkeepers charge between $3,200 and $5,800 per month and manage everything from cash flow, payroll, and credit accounts to daily operations and financial reporting. These bookkeepers typically receive a regular salary with benefits and work directly for the business, ensuring consistent financial management.
Outsourced Bookkeeping
For companies that want expert financial management without the costs of an in-house employee, outsourcing bookkeeping to a third party can be a cost-effective solution. Outsourced bookkeeping typically costs between $500 and $2,500 per month, depending on the services needed. This option is ideal for businesses that want access to experienced bookkeepers without committing to full-time hiring costs.
Read More: What’s the Real Difference Between Bookkeeping and Accounting?
Factors That Affect Bookkeeping Pricing
Evaluating the factors that affect bookkeeping pricing allows you to plan your budget effectively and choose the right service level for your business’s needs.
- Location: Rates vary by location, with bookkeepers in larger cities typically charging more than those in smaller towns or rural areas due to the cost of living.
- Experience: More experienced bookkeepers charge higher rates, but their expertise often leads to greater accuracy and efficiency, which is particularly valuable for businesses with more complex financial needs.
- Business Size: The larger your business and the more transactions you have, the more time and effort will be required, resulting in higher fees.
- Services Provided: The cost depends on the range of services required. Basic tasks like data entry are more affordable, while comprehensive services like payroll management and cash flow analysis come with higher fees.
If you handle some of your own bookkeeping tasks, such as invoicing or basic data entry, you may reduce the need for outsourced help, lowering your overall costs.
In Closing!
Bookkeeping is more than a cost. It’s an investment in your business’s health and success. Choosing the right service hinges on understanding your needs and budget.
Whether you go for a full-service firm, a freelancer, or handle it through software, the decision should align with your financial strategy. Remember, a well-kept book is like a well-tuned engine—essential for driving your business forward.
When selecting a bookkeeper, start by asking for referrals from trusted colleagues in your industry. Make sure to check online reviews on platforms like Google to see how others have rated their services. It’s also a good idea to inquire about their experience with businesses like yours.
Many bookkeepers offer free consultations like we do at Focus CPA Firm. Use this opportunity to discuss your needs and see if we’re a good fit for your business. Also, consider their communication style and availability—ensuring they’re accessible when you need them is just as important as the services they offer.
Beyond standard bookkeeping services, we also provide incorporation services to help you set up your business efficiently and family office services to manage and optimize your wealth. Our team is ready to provide the expertise and assistance you need. Book a FREE consultation.
