Kathryn is a Chartered Professional Accountant with over 7 years of experience in both public practice and industry accounting. She has had the opportunity to work with a wide variety of individuals and companies, which gives her a unique perspective on what it takes to be successful in the industry. Kathryn loves all things business and productivity and has been able to combine her love for creating content into writing for accounting firms looking to improve their businesses. Depending on how much work you have and how long you need services, a contracted worker might be a better option. While these exact figures can change over time, the cost comparisons of covering your bookkeeping and accounting needs can vary greatly depending on the type of individual you hire. Chances are, clients are going to be more willing to pay an accounting firm more money over another if they have more experience.
You will need to understand your client's needs and what they are willing to pay for your services. You may also need to negotiate prices with clients, which can be time-consuming. Now that we've gone over some of the factors you need to consider when pricing your bookkeeping services let's take a look at a few different pricing structures you can use. Bookkeepers have a wide variety of skills, so one of the factors you need to consider is what you need them for.
If you have been working as a bookkeeper for many years, you will be able to charge more than someone just starting out. The same is true if you have specialized training or certifications. But if it’s more complex, like building out your financial outlook, you might be better off with hiring an accountant. Do your due diligence to make sure you’re billing your clients fairly. But, don’t minimize your worth and expertise in the pricing process.
Now that you know the answer to the question “How much does a bookkeeper cost? You may also consider using online bookkeeping services and accounting software to save time and money, all while meeting your bookkeeping needs. Other factors that can impact the hourly rate include the freelance bookkeeper’s level of education, certifications obtained, such as QuickBooks ProAdvisor, and the software used. A specialty in additional services like payroll or financial analysis, the frequency of services offered, and even an expertise in certain accounting applications can also affect the rate.
In the past, it was popular for bookkeepers to charge per transaction. To be honest, I’ve never done it that way, so I’m not as familiar with what the rates would be for this type of pricing. If you’re interested to learn more, Google it, and I’m sure a plethora of information will show up.
If you can help your clients save time and money or improve their cash flow, you can charge more for your bookkeeping services. It is important to show your clients the value of your services based on what they value so that they are willing to pay a higher rate. Just as with hiring an internal bookkeeper and defining their role, you’ll have to decide which pieces of your financial management make sense to outsource including the bookkeeping function. The average price of outsourcing your bookkeeping needs ranges depending on the number of transactions and complexity of services required. A key benefit of Outsourcing is it gives you the ability to customize the services you receive to your bookkeeping needs. If you can manage your job and some of the accounting each month but need a little extra help, a part-time bookkeeper might be a good fit for your business.
This office employs 10 speech pathologists and general staff and circulates child clients who come in for their services. This task probably takes me a couple hours per month to complete. If you are doing anything with payroll, this will vary widely between each client. I do not offer full-service payroll as a bookkeeper, and I don’t do payroll in QuickBooks, but my clients have a payroll service they use. However, as your business grows, you’ll find that your time becomes much more valuable and a scarce resource.
Occasionally, there’s a problem where I need to dig to find the solution, or my client has a special request I need to take care of, and in those cases, it will take me the full five hours. I like to calculate my rate based on my max time, but then I’m rewarded if I work quickly and efficiently. Working a maximum of five hours per month on this particular client’s books, and charging $250 a month, I’m making right around $50 an hour, which is in the ballpark of where I want to be. You can also choose to withhold services until the invoice is paid. For example, if you are doing monthly bookkeeping, you can withhold the next month's services until the current invoice is paid.
There’s good news for business owners who want to simplify doing their books. Business owners who don’t want the burden of data entry can hire an online bookkeeping service. These services are a cost-effective way to tackle the day-to-day bookkeeping so that business owners can focus on what they do best, operating the business. For business owners who don’t mind doing the data entry, accounting software helps to simplify the process. You no longer need to worry about entering the double-entry data into two accounts. The cost can be from a $20 hourly rate for basic services.
By now, you should have an idea of how much a bookkeeper is going to cost you, and how that price tag stacks up against the cost of doing it yourself. Armed with that knowledge, you’re ready to decide whether to bring in a professional or hire outside what is an enrolled agent for taxes help. Too many self-employed workers, startups, and business owners miss out on write-offs that can save them a lot of money. Without up-to-date books, you won't have an accurate understanding of your business expenses, profits, and overall cash flow.
At the end of the year, during tax time, you need to send anyone who works for you as a contractor a special form called the 1099. Regular employees receive a W-2 in January showing their wages from the previous year. Contractors perform special services for companies and aren’t hired on as employees. To illustrate what a large client looks like, I’ll be using a physical therapist office I do bookkeeping for that generates about $1.2 million in revenue a year.
You also don’t have to scramble around looking for receipts on previous transactions. An in-house bookkeeper will cost you anywhere between $40k-$50k annually. On the other hand, outsourced bookkeeping is only a small fraction of that. When you’re setting your hourly rates, you have to think about the frequency of service for each of your clients.
While part-time bookkeepers would earn around $2000 per month on average. In today’s remote work, many companies hire bookkeeping services in states like Florida, which have no income tax and lower cost of living. Since the information gathered in bookkeeping is used by accountants and business owners, it is the basis of all the financial statements generated. Most accounting software allows you to automatically run common financial statements such as an income and expense statement, balance sheet and cash flow statement. Business owners or accountants can then use these statements to gain insight into the business’s financial health. Like traditional bookkeepers, online bookkeeping services (like Pilot) employ a number of professional bookkeepers to provide their clients with books service.
Or perhaps you’re tight on cash and can't afford to hire a professional right now. The average base salary of an in-house bookkeeper is $42,000 - $46,000. (Based on data from Bureau of Labor Statistics, Salary, Payscale, Glassdoor, and Indeed.) This comes out to $3,200 - $3,520 per month, or an average hourly wage of $20 - $22.