How Much Does a Bookkeeper Cost for a Small Business?

Hiring a bookkeeper is one of the most strategic financial decisions that a small business will make. However, attracting the services of a bookkeeper is a task most small businesses delay because they do not know the cost implications. In this article, we will provide insight into bookkeeper rates and degrees that affect the cost to help you evaluate if it suits your small business budget.

Bookkeeper Hourly Rates

The average bookkeeper’s rate is $15-$50 an hour depending on the number of years of service, certification, state, and kinds of accounts.

Here is an overview:

Entry-level bookkeepers: $15 to $25 per hour

Junior bookkeepers have one to three years of experience, and they often cost less than others.

Experienced bookkeepers: $25 to $35 per hour

Professionals in bookkeeping have 3 to 5 + years of working experience managing small business finances. They have specialized in typical small business accounting software.

Certified bookkeepers: $30 to $50 per hour

Professional bookkeepers have undertaken and passed national tests in the trade. Thus, users who passed the QuickBooks Certified User (QBCU) exam can charge hourly rates as high as those in the top-tier group.

Metropolitan bookkeepers: +$5 to $10 per hour

Bookkeepers who work in cities referred to as “significant” will charge more per hour because the cost of living in such towns is often high.

Choose the qualifications you want to ensure you don’t over or underpay for what you are looking for.

Factors That Impact Total Costs

In addition to hourly rates, several other factors impact your total bookkeeping costs, including:

Services Required

Services offered by your bookkeeper have a strong bearing on total costs. For example, simple data entry work is less time-consuming than accounts receivable/payable or revenue analysis. Be specific with the services you require to ensure bookkeepers provide accurate quotes.

Number of Transactions

The size and frequency of financial transactions are a significant cost factor. Sheer volume of monthly work is usually a cost leader. That is why the level of transactions carried out defines the time necessary for proper record keeping. Bookkeepers are believed to estimate the number of total hours from the average monthly transactions.

Complexity

Almost all business industries, including manufacturing or construction businesses, experience more complicated financial transactions than service businesses. Multiple locations and inventory data also create further complexity in the process, which takes additional hours for the bookkeepers. Bring information on your account’s difficulty level to let bookkeepers know about the unique knowledge they need.

Software and System Knowledge

Bookkeepers also include the costs of other accounting software and systems environments. Knowledge about your specific accounting software reduces the working time of bookkeepers. If your understanding of the difference between software is scarce, training will take longer.

Number of Locations

For new businesses, especially those operating in many areas, time is spent consolidating and reconciling the cost. Accurately tracking financials across more than one entity or profit center is a time-consuming process.

In order to ensure bookkeepers offer specific cost estimates, explain these cost drivers in terms of hourly rates.

How Much Does a Full Charge Bookkeeper Cost?

A full charging bookkeeper is involved with all aspects of your financial information, accounts receivables, accounts payable, payroll, monthly, quarterly, and yearly reconciliation, fixed assets, inventory, revenue analysis, auditing, and any other duties. This type of person is in charge of your financial department.

Because of the broad range of responsibilities, full charge bookkeepers are paid on the higher end of the per hour scale.

Average costs are:

– Small/simple business: $30 to $45 per hour

– Medium-sized business: $40 to $65 per hour

– Large/complex business: $55 to $85 per hour

Full charge bookkeepers will free up a lot of your time by handling critical financial tasks you might otherwise have to do.

Long-Term Partnership Approach

Instead of seeing bookkeeping as an expense that does not change, you should view it as a continual supporting of the overall financial health with paybacks. The most successful bookkeeper engagements take a long-term, partnered approach focused on advancing financial control and insights over time through tasks like:

-Improving ways information is reported and analyzed for better decisions

-Training when new people are recruited into an organization

-Filling the organization’s capacity to adopt new technologies into current processes

-Implementing changes according to the growth phases or changes in the market economy

This does not take much of the business owner’s time so that they can spend time targeting higher level growth and strategies. You can also track bookkeeper hours every month to ensure time conserved on the most critical tasks.

Weigh Costs Against Benefits

Small business owners like you will be overwhelmed with other tasks and have little time to manage finance functions and yet these dictate the profit levels, availability of capital, and the longevity of the business. Despite the fact that the hiring of a bookkeeper is an expenditure, failure to hire one can prove to be costlier for your business. Here you can compare the costs and time consumption of various bookkeeping practices performed yourself with the precious benefits of having a professional take care of these complex tasks, before you decide to take on staff. Hiring the right person yields impressive monetary and non-monetary returns in the immediate and distant future of the business organization.