How Much Do Bookkeeping Services for Small Businesses Cost?

With tech taking up so much airspace in modern accounting, those who are fluent users are quickly outpacing those who aren’t. In a survey by PracticeWeb, 66% of clients surveyed how much does bookkeeping cost said they would pay more for a ‘tech-savvy’ accountant. It’s the future in a changing accounting industry, where you can utilize tech to increase efficiency and output.

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Time how long it typically takes you to do your bookkeeping and calculate how much you would normally earn during that time. If you would make more in that time than you would spend on a bookkeeper, it may be worth hiring one. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

three ways that a bookkeeper can help you save money

• The least amount you can expect to pay in bookkeeping fees is $348 a month.
• Bookkeepers, especially new businesses (the ones who don’t have to make the sometimes messy transition to another pricing model), should avoid hourly billing for that reason.
• You won’t need any other software to work with Bench—we do everything within the platform.
• Not every business has the same bookkeeping needs as others, and their needs will likely change as the company experiences growth.
• This office employs 10 speech pathologists and general staff and circulates child clients who come in for their services.

However, freelance bookkeepers may have more control over their pricing and may charge higher rates because of their specialized skills or expertise. Overall, there’s no clear answer since income will vary based on individual circumstances. Freelancer bookkeepers charge anywhere from $26.91 to $43.57 per hour, depending on several factors, such as location, experience, certification, and type of bookkeeping services provided. For example, let’s say that you’re handling your own books and it takes you 15 hours per month to complete. As a business owner, your hourly rate can be estimated at a minimum of $50 per hour.

Bookkeeping cost factors

• Now, you may have an accountant that also completes the tasks of a bookkeeper, but not the other way around.
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• I’m never in their physical office, so if someone pays in cash, the office has a system to make a cash deposit to their bank and then record it within the system so I know that it was taken care of.
• If you are then you are already paying for the cost of bookkeeping, but in your own time.
• On average, a bookkeeping firm will charge anywhere between $300 to $2,000 per month depending on the amount and complexity of work required.
• It allows you to pay a set price each month for an unlimited amount of work.
• You already have your bookkeeping set up in Quickbooks Online and your books are up to date through the most recent month.

One of the main benefits of such an approach is that you can customize the services you want the bookkeeper to provide. However, businesses need services that can also handle payroll and taxes. https://www.bookstime.com/articles/how-much-does-bookkeeping-cost You’ll usually pay for bookkeeping services in one of the three ways—hourly, salary, or a flat fee. That can be a huge time saver for business owners versus processing payroll themselves.

• For full time services, expect to pay from $3,000 to $4,500 per month without the benefits.
• For S-Corps, C-Corps, and Partnerships, you can add-on personal filing for 1 partner or shareholder for just $59/mo when billed annually or $69/mo when billed monthly.
• Neglect this side of your business, and you could end up missing out on savings — or landing in hot water with the IRS.
• The more experienced the bookkeeper, the more confident they are with their skills.

Karbon is the one system that everyone opens every morning, and our go-to for all information about clients and work that needs to be done. Ian discussers the phases of transitioning to value pricing (setup, implementation, and execution) and walks you through the process in ten proven steps. Fixed-fee pricing allows you to increase profit as you increase efficiency—the more efficiently you can work, the greater the profit margin. Asking yourself these questions is vital to knowing the right bookkeeping pricing for you. So to bill correctly, it’s important to identify what you’re charging for, the way you charge, and what adjustments you can make to improve your bottom line. For example, a Certified Public Accountant (CPA) is paid more than a traditional accountant due to having to meet higher education and licensing requirements depending on their state.

For example, if you receive payment for a service in January, you record the income in January, even if the service was provided in December. Similarly, if you pay for office supplies in February, you record the expense in February, regardless of when you actually used the supplies. Now that you understand the basics, it’s time to put your knowledge into action. The cost of a bookkeeper can vary significantly depending on location, qualifications, and experience. Bookkeepers who work on an hourly basis typically charge between $20 and $50 per hour depending on their level of expertise and experience. In California, the average annual salary for a bookkeeper is around $47,000 while in Texas it’s closer to $41,000.

Factors Influencing Bookkeeper Rates

You will also be in a better position to outsource more advanced management accounting and controller. For example, there are smaller, independent bookkeepers that specialize in certain services or business types. Or you may want to go with a large firm that takes on a high volume of clients for a lower rate.

• You can also use bookkeeping softwares like QuickBooks, Xero, or FreshBooks to get hands-on experience.
• It helps you track your income and expenses, keep an eye on your financial health, and make informed decisions.
• Payments come in electronically, and when they come in, I apply it to the patient’s balance.
• To be exceptional at these tasks, accountants must complete years of training and earn special certifications, which their salaries reflect.
• In the consultation, you can take a look at their bank account, see how many transactions they have, and see how complex everything is.
• The AIPB certification program is ideal for someone who does not have any formal education in bookkeeping.

Should you do your own bookkeeping?

At BELAY, we prefer that our bookkeepers have bachelor’s degrees or five years’ experience – or both. The lower end of the range typically includes basic bookkeeping for a small business that only requires five or so hours of work per month. If you can get away with that, part-time bookkeeping services can be much more affordable than a full-time bookkeeper working in house. Based on the average salary of a bookkeeper, you should be paying roughly $3,516 a month for bookkeeping if you choose to hire a bookkeeper.

A major and effective way to do that is to move to a remote or hybrid work set-up. As we close, I want to share a few talking points to help you share with the potential client about why it would be better for that person to hire you as a contractor instead of as an employee. A client with a higher income is going to be able to afford a higher price tag for a bookkeeper, and your workload will be quite a bit higher than a small or medium client. This is the benefit to charging based on a percentage of your client’s revenue. The simpler your books are when you send them to your CPA, the cheaper it will be to file your taxes.

Accurate and timely bookkeeping allows you to make sound financial decisions. It’s important to note that most firms charge extra for tax preparation to have you fully audit-ready, so you shouldn’t expect that to be included in your standard bookkeeping fees. “Overlooking bank fees and inaccurate record-keeping” are also frequent pitfalls, Schmied says. Steer clear of common mistakes like not keeping receipts, miscategorizing expenses, and mixing personal finances with business ones. “These can be avoided by maintaining meticulous records and using the right software,” Pierce says.