How Much Does a Bookkeeper Cost?
A bookkeeper is a person who handles and records all the finances of a company or business. Bookkeeping includes documenting all purchases, sales, receipts, payments, expenses, etc. Hiring your own personal bookkeeper that is full time in your business and gets paid a salary or by the hour can be expensive for any business. If you cannot afford to pay a full-time bookkeeper more than $15 per hour plus benefits, it may be best to outsource your work to an individual or professional bookkeeping service. Outsourcing your work is a great way to free up your time and save a lot of money in the process. This independent bookkeeping service will help you keep your finances organized and hassle free rather than stressful.
How much is it?
- On average a bookkeeper is going to charge anywhere from as little as $25 to as much as $50 per hour. The price will generally depend upon the complexity and geographical area. Experts recommend that most small to medium sized businesses should be prepared to budget at least $1,500 per month to hire an outside bookkeeping service. The average hourly rate tends to hover around $35. Although this seems like a lot of money per hour, you have to remember that you are not paying that person or service for 40 hours per week. Instead, it will be around from 30 to 40 hours per month. Compared to hiring a full time employee, which would cost you about $2,400 per month, hiring an outside bookkeeping service can save you about $1000 per month.
- According to a few members on the forum BiggerPockets.com, they claim that they spend an average of $50 per hour for their services. Some claim that they can be as little as $25.
- Magnus Accounting offers a handful of services that range from as little as $300 to as much as $850 per month.
What is going to be included?
- The average bookkeeper will not necessarily have a degree, but rather, they may have some training at a local community college. A bookkeeper will be able to complete tax forms, create financial reports, and offer standard financial advice. They can also gather detailed numbers for a Certified Public Accountant (CPA).
- Bookkeepers are able to reconsolidate bills, create balance income statements, process payroll, file taxes, pay bills, organize transactions, invoice customers, and monitor accounts receivables.
- Most of the time, these bookkeepers will not charge by the hour, but rather, they will charge a flat rate per job. The above rates are simply averages according to the number of hours the bookkeeper will put in.
What are the extra costs?
- Adding additional jobs such as processing payroll or monitoring accounts can add to the costs. Every bookkeeper will have his own pricing policy.
- Hiring a CPA could cost upwards of $150 to $250 per hour. The more experience and certifications a bookkeeper has, the more you are going to probably pay.
- The larger the business, the more expensive a bookkeeper will be. The reason for this is that a large company will have a lot more financial information and responsibility than a small company will have.
Tips to know:
- Some bookkeepers may charge a minimum, which can be around $100 to $200. These fees are usually tied to businesses that do not have a lot of work that needs to be done at one time.
- If you do not know where to search for a bookkeeper, the American Institute of Professional Bookkeepers allows you to browse through potential candidates in your area. When hiring one, be sure to look into their history, credentials and always ask for references.
How can I save money?
- Instead of hiring a bookkeeper, consider purchasing software such as Quickbooks. In today’s technological era, keeping track of your finances is easier than ever.
- Hiring a bookkeeper is going to be a lot easier than hiring an in-house employee. While you may be able to hire an employee for less than $20 an hour, most forget to factor in the insurance, benefits, etc. These benefits alone can double the hourly rate.
- When hiring an individual or company, just make sure that you get at least three to five quotes before making a decision. Do not focus on the price because most of the time you will get what you pay for.
- Be organized! The more organized you are, the easier it is going to be for the bookkeeper to do his job.
- If you have found someone that you are interested in working with, do not be afraid to negotiate. Many bookkeepers are willing to work on their prices.
- Instead of paying a full time bookkeeper as an employee or hiring a bookkeeping service, consider choosing an employee that you already have and giving him this responsibility. He can work part of his hours on bookkeeping and can spend the rest of his time doing another job that will be beneficial for you and your company.