How Much Does a Bookkeeper Cost? A Complete Guide for Small Businesses
As a small business owner, you’ve already got a lot on your plate. From managing your employees to serving customers, your to-do list never seems to end. In all this hustle and bustle, small business owners often overlook bookkeeping and its importance. However, keeping financial records accurate is very critical for your business. This is where a bookkeeper can be of great help.
Since there are already many business costs to be accounted for, you’ve probably wondered how much does a bookkeeper cost. We answer that question for you in this post and also identify the factors that affect a bookkeeper’s cost for a small business.
The Value of Professional Bookkeeping
Let’s talk more about the importance and value of professional bookkeeping before we dive into the numbers. A good bookkeeper does more than just crunch numbers. They:
- Keep your financial records up-to-date and completely organized
- Makes decision-making easy since you have all the numbers in front of you
- Keeps you stress-free and prepares you for the tax season
- Spots financial issues before they turn into messy problems
- Allows you to focus on integral business tasks while the numbers are being taken care of
Remember, a professional bookkeeper can cost you a good amount of money. However, it is also important to consider the opportunity cost of not hiring a good bookkeeper. Now that we’ve understood the benefits, let’s look at the costs.
How Much Does a Bookkeeper Cost Per Month?
The monthly cost of a bookkeeper depends on your business needs and the level of expertise of the bookkeeper. If we talk about how much does a bookkeeper cost for a small business, you can expect to pay anywhere from $300 to $2,000 per month.
Now you may be wondering the reason for such a big range. Well, it depends on the following factors:
- The size of your business
- The specific services you need
- The complexity and depth of your finances
- The number of transactions you’re dealing with each month
For example, if we consider a small business that has just begun its operations, it is safe to assume that the business has a simple financial structure. This means that this business will mostly require only basic bookkeeping services and that too only for a few hours each month.
So how much does a bookkeeper cost per month in this situation? Well, this could cost around $300 to $500.
On the other hand, when we talk about larger businesses with more complex needs, they would probably require a full-time bookkeeper to handle their finances. This can cost them around $1,500 per month.
How Much Does a Bookkeeper Cost for a Small Business?
While the above range can be applied to small businesses as well, here are some more specifics relating to it. Small businesses have a lot more flexibility when it comes down to bookkeeping costs. If you’re operating one, you might not need full-time services, which keeps your costs down.
We have also identified some common options for small businesses to fulfill their bookkeeping needs:
Part-Time Bookkeeper
Since you don’t need a bookkeeper for every working hour of the day, hiring a part-time option can greatly minimize your costs. This can cost you anywhere around $500 to $1,500, depending on how many hours you’ll need the bookkeeper for.
Virtual Bookkeeper
You could save big time by hiring a virtual bookkeeper. This works great for small businesses and is even better for online businesses. You can hire a freelancer bookkeeper for $200 to $400 per month.
Bookkeeping Software
An in-house bookkeeping software is a viable investment if you have a person in your business with an accounting background. There are also bookkeeping software options with professional support available and this can range from anywhere around $200 to $600 per month.
Remember, the cheapest option isn’t always the best when you’re considering how much does a bookkeeper for a small business. Just like you spend generously for the healthcare you receive and never skimp on it, this is a concern for the financial health of your business. Your decision can make or break your business’s financial health.
How Much Does a Bookkeeper Cost Per Hour?
If you’re more like a pay-by-hour person, bookkeeper hourly rates typically range from $20 to $50 per hour. Again, this can vary based on their experience, location, and the needs of your business.
Here’s a rough breakdown:
- Entry-level bookkeepers: $20 to $25 per hour
- Experienced bookkeepers: $30 to $40 per hour
- Specialized or certified bookkeepers: $40 to $50+ per hour
While these rates might sound a lot when you consider how much does a bookkeeper cost per hour, do keep in mind that you’ll only pay for time actually spent on the books. Hence, hiring on per per-hour basis can be the most effective way for some businesses, especially those with simple financial needs.
Factors that Influence Bookkeeping Costs
Enough numbers for the day. Now let’s talk about some major factors that influence how much does a bookkeeper cost:
Your Business Size and Complexity
Larger businesses have more employees, multiple bank accounts, or even various income streams that need to be taken into account. For such businesses, a more extensive bookkeeping service is needed which pushes the cost up.
The Number of Monthly Transactions
More transactions mean more work for your bookkeeper. If you have hundreds of transactions each month, expect to naturally pay more than a business with only a few dozen.
Additional Services Needed
Basic bookkeeping covers things like recording transactions and reconciling accounts. But, if you need extra services such as payroll management, tax preparation, or financial reporting, this will increase your costs.
Your Bookkeeper’s Qualifications
A certified public accountant (CPA) or a bookkeeper with specialized certifications will generally charge a higher price because of their qualification and expertise. However, their expertise will save you a lot of money in the long run since they know their job well.
Location
How much does a bookkeeper cost is also dependent on the region your business operates. Rates are normally higher in bigger metropolitan cities as compared to smaller towns. If you consider hiring a virtual bookkeeper, the location aspect holds true there as well since bookkeepers operating from various countries can have different rates.
Making the Right Choice for Your Business
How much does a bookkeeper cost choosing one isn’t only dependent on finding the lowest price. It’s about finding the right fit for your business needs and budget. Here are some best practices:
Assess your needs
Are you well-off with basic bookkeeping or require a much more comprehensive touch?
Get multiple quotes
Always talk to several bookkeepers and compare the prices to get the best deal.
Consider the value
Never skimp on the quality while making such a decision. A more experienced bookkeeper might charge more but could save you money by catching errors or finding tax deductions.
Start small
No need to hire a full-time bookkeeper if you’re not sure. You can always start with basic services and add more as needed.
Don’t forget about technology
Modern bookkeeping software can be of great help if you can operate it yourself. It saves costs and also improves the efficiency of your current bookkeeping approach.
Conclusion
How much does a bookkeeper cost per month or hour for different businesses There are various factors in play. But always remember that good bookkeeping is an important investment in your business’s financial health.
If you’re looking for a good bookkeeping service at an affordable price, we at Ace CPAS can help you. Our team of qualified CPAs understands the dynamics of a small to medium-sized business and offers you the best services according to your needs.
With the right bookkeeper by your side, you can focus on what you do best – running your business and leave the worries on us.
