Maybe your business has grown to the point where you can no longer handle your own bookkeeping. Or maybe you’re just starting out, but are so intimidated by numbers that you can’t imagine handling it yourself.
If your finances are overwhelming you, you may need professional back office support. This guide will help you figure out what you need and we’ll go over the pricing of bookkeeping services.
How Much Does A Bookkeeper Cost?
Financial help for your business comes in many different forms – and at many different price points. There are so many factors that drive bookkeeping services pricing that you could spend anywhere from $10 to $75 per hour. Or, instead of paying by the hour, you could be paying by the project – anywhere from a few hundred to a few thousand dollars per month.
The first question to ask is, what does your business need? If all you need is help with routine tasks, you need a bookkeeper. These tasks might include:
- Journal entries in Excel or a bookkeeping software
- Accounts payable and receivable management
- Payroll
- Sales tax compliance
- Bank account or credit card statement reconciliation
- End of period financial statements
- Quarterly and yearly income tax preparation
The median hourly wage in the US for a bookkeeper is around $20/hr (Ziprecruiter). If you live in a major city or high cost of living area, you may need to pay over $30/hr. If you work with an independent contractor instead of hiring an employee, you might pay twice that much – but without the commitment of an employee.
Hiring a part-time bookkeeping employee will cost about $24,000 per year in wages, plus any added expense for employee onboarding, office space, etc. A full-time bookkeeper may cost anywhere between $40,000 and $60,000, plus any employee benefits.
Paying an independent contractor is more expensive per hour or per project than hiring an employee, since they have their own expenses and taxes to bear. Depending on your individual business needs, it can make more sense to outsource your accounting work to keep your own team lean.
Why This Price For Bookkeeping Services?
There are multiple factors that can influence the bookkeeping fees you pay for your financial support. Hiring an employee will come with different costs than a contractor or a consultant. The level of support you need will also drive the cost.
Location
A bookkeeper or accountant in a high cost of living area like Los Angeles or Miami will charge higher bookkeeping fees than someone in a rural area.
Size Of Business
If your business is very large, or has very diverse needs, you can expect to pay more for your accounting and bookkeeping services. Not only will there be more paperwork to manage, but your accountant will most likely also be handling a wider variety of tasks.
Larger businesses also are more likely to have sensitive information for their accountant to handle. This is another factor to consider in who you hire and how much you pay them.
Certification
The level of certification and licensing you require will also determine how much you pay. A bookkeeper does not require any professional license; at most they will have completed a specialty industry course along with a certificate of completion from a bookkeeper’s course. They may have an associate’s degree in accounting or business, but are not required to have a high level of education.
There are two main associations that offer bookkeeper certification: the National Association of Certified Professional Bookkeepers, and the American Institute of Professional Bookkeepers. A bookkeeper with one of these certifications has at least 2,000 hours in bookkeeping, and will be able to command a higher price than an uncertified bookkeeper.
Experience
How many years of experience does your ideal bookkeer have? And how many years of specific industry experience? If your business needs specialized accounting help, like real estate, construction, or medicine, you may need to pay a premium for the specialized knowledge.
At Bluebird Partners, our team has specialties in a variety of different industries. We can serve businesses across the economy without any difference in quality.
Frequency Of Service
Last but not least, your cost over time will vary by how often you need the help. Do you need help throughout the month with payroll, sales tax, and bookkeeping? Or do you only need help preparing your quarterly taxes?
Of course, less frequent services will mean a smaller overall cost. However, if you need specialized one-off services, be prepared to pay a premium.
What Am I Buying?
We’ll leave aside hiring an employee – when you interview and hire an employee, you can know pretty much what you are going to get from their resume.
Now, when you outsource to a contractor or to a full-service bookkeeping company like Bluebird Partners, what are you going to get?
Most outsourced bookkeeping companies offer a variety of different service levels at different price points. A few hundred dollars per month will get you basic ongoing bookkeeping services and support. You can add additional services, such as depreciation schedules, financial reporting, and tax preparation in higher packages, or create a package that fits your custom needs. This could cost between around $800 and $1,200 per month.
When you choose to work with a full service bookkeeping company like Bluebird Partners, you are getting more than just one person. You are getting a team of experts that can assist you with everything your business needs, all under one roof, and the price you pay reflects that. Our monthly bookkeeping service pricing starts at $500/m.
Common Bookkeeping Pricing Structures
Bookkeeping services pricing can vary – it’s not all hourly. There are many pricing structures that can work depending on the type of work, size of business, and duration of the project.
- Hourly: This structure can make sense if you’re hiring an employee or a consultant. In an hourly pricing structure, you are paying for the value of time, rather than a direct deliverable.
- Fixed-rate: Fixed-rate pricing makes the most sense for specific projects. You pay a specific amount up front in return for a defined end product. A tax return, for instance, has a clearly defined final deliverable and would be a good candidate for a fixed rate price.
- Percentage of income: An accountant or other consultant may charge based on your income. This can be a good way for them to create equitable pricing between large and small clients. On the other hand, if your company is a startup with limited income history or wildly variable income, you may not be able to find a professional willing to work on this basis.
- Per bank account: This is another good way to create defined prices that work for large and small clients. Multiple bank accounts with transactions that need tracking, categorizing, and reconciliation will need more time and effort than one or two accounts.
● Per transaction: You may even find bookkeepers that will charge per transaction. Again, a large company with thousands of sales per month will need more work than a small boutique.
Outsourcing vs In-House Bookkeepnig Pricing
The decision to hire in-house or outsource is dependent on your needs. Outsourcing can be a great option – you get the guarantee of a job well done, without having to manage an additional employee. For one monthly fee, your tasks are done. You do not have to worry about training, continuing education, benefits, or any of the other hidden costs of having an employee.
There are a couple situations where it does make sense to hire someone to work in-house. If you need more hands-on daily work than an outsourced team could perform, an employee is a good solution.
The team at Bluebird Partners is ready to assist you with any bookkeeping, accounting and tax queries you have. Contact us to book a free consultation.
FAQ’s
Hiring a bookkeeper or accountant means hiring expertise. Most business owners don’t want to be number-crunchers or analysts – they just want to work on what they know and do best.
The peace of mind alone that comes from knowing your finances and taxes are in order can be worth the price of a good bookkeeper
When you are just starting out, it makes sense to DIY your books. Maybe you are trying to start a business out of your garage or home office. Maybe you have such a low transaction level that you can get away with only doing bookkeeping one or two days a week.
As soon as your bookkeeping starts getting in the way of what you need to be doing as CEO, though, it’s time to consider getting some help.
And, if you need financial statements for lenders or investors, an accountant or bookkeeper can prepare those for you.
