How much does small business bookkeeping cost?
As a small business owner, keeping track of your financial records is essential for the success of your business. But how do you know if you should handle bookkeeping yourself or hire a professional? And if you decide to hire a bookkeeper, how much can you expect to pay? Let’s explore the costs associated with hiring a bookkeeper for a small business.
According to Belay Solutions, the average hourly rate for bookkeeping services ranges from $40 to $60 per hour. However, this rate can vary based on several factors such as the size of your business, the complexity of your financial records, and the experience level of the bookkeeper. We have personally seen rates vary from $80 to $150 per hour. For example, if you have a large volume of transactions, a bookkeeper may need to spend more time reconciling accounts, categorizing expenses, and preparing financial reports, which can result in a higher hourly rate.
Flat Monthly Fees
Instead of charging an hourly rate, some bookkeepers may charge a flat monthly fee. According to Lalea Black, a bookkeeper and financial strategist, the flat monthly fee can range from $200 to $800 per month or even just south of $3,000, depending on the volume of transactions, and other factors like ad-hoc Reporting, cashflow projections, budgeting, etc.
Bookkeepers charging flat fees for small business owners can be a convenient and cost-effective option. With a flat fee, the bookkeeper will charge a fixed amount for a specific set of services, which can include tasks such as data entry, bank reconciliation, and financial report preparation. This arrangement can be beneficial for small business owners who want to budget and plan their expenses more effectively. It can also provide transparency and peace of mind, as there are no surprise charges or hidden fees. Additionally, flat fees incentivize bookkeepers to work efficiently and effectively, as they are not compensated based on the number of hours worked. Overall, choosing a bookkeeper who charges flat fees can be a wise decision for small business owners who want to ensure their finances are managed effectively while maintaining control over their expenses.
Another factor that can impact the cost of a bookkeeper is the level of experience they possess. An experienced bookkeeper will likely charge more than someone who is just starting out. According to GrowthForce, an accounting and bookkeeping firm, a bookkeeper with less than five years of experience may charge between $15 and $30 per hour, while someone with over five years of experience may charge between $30 and $50 per hour. Depending on the level of experience and responsibilities, some firms have Senior Bookkeepers, Accountants, and Controllers charging $80-$150 per hour.
When you decide to hire a bookkeeper, it’s important to be aware of the various expenses that may come along with their services. Beyond the standard hourly rate or monthly fee, there may be additional costs involved. For instance, if your business uses accounting software, they may charge a fee for setting it up or maintaining it on an ongoing basis. If you need extra services like tax preparation or payroll management, this could also result in additional fees. These costs could encompass various elements, such as travel expenses, technology fees, or any other services that the bookkeeper may offer. Some bookkeepers may have a minimum number of hours they require per month or other contractual obligations. To prevent any unexpected expenses, it’s crucial to establish all the costs and obligations upfront before engaging a bookkeeper.
Is Hiring a Bookkeeper Worth the Cost?
While the cost of hiring a bookkeeper for a small business can vary based on several factors such as the size of your business, the complexity of your financial records, and the experience level of the bookkeeper, it’s important to consider the value that a professional bookkeeper can provide. By outsourcing bookkeeping tasks, you can save time and focus on growing your business. A bookkeeper can provide expertise in areas such as financial reporting, budgeting, and cash flow management. By having accurate financial records, you can make informed decisions that can lead to the long-term success of your business.
It’s also important to note that while hiring a bookkeeper can seem like an additional expense, it can actually save you money in the long run. A bookkeeper can really help you identify areas where you may be overspending or where you can cut costs. For instance, a family-owned business in Virginia could benefit from a local bookkeeper or have knowledge of the Virginia area, while a chiropractor may benefit from bookkeepers familiar with the health and wellness industry.
When considering the cost of a bookkeeper, it’s important to weigh the costs against the value provided to your business.