How Much Does a Bookkeeper Cost in 2023?

Instead, let’s talk about the different ways to charge for bookkeeping services. Bookkeeping helps you keep track of the essential elements of your finances. You are kept up to date about your business assets, income, expenses, and liabilities.

This price varies based on the number of bank and credit card accounts you have, plus the average number of transactions your business transacts monthly. The lower end of the range typically includes basic bookkeeping for a small business that only requires five or so hours of work per month. If you can get away with that, part-time bookkeeping services can be much more affordable than a full-time bookkeeper working in house. 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. They can do work such as inputting receipts and tracking employee timesheets, accounts receivable and accounts payable. When hiring a part-time bookkeeper, management still needs to have someone reviewing the work of the bookkeeper.

Average Total Hourly Cash Compensation

While you’re waiting for your chance to branch out and start your own small business, you can use this time to practice your negotiation skills. Making a strong case about why you deserve a raise will get you used to the process when it’s time to raise your rates with your clients. Where you live, what type of bookkeeping services you offer, and what type of clients you work with affect that answer. A full-time bookkeeper in a major city providing advanced bookkeeping services means a different pricing structure than a part-time bookkeeper working in a small town for a local diner.

  • Accountants provide a higher level of financial analysis and planning.
  • Clients now decide HOW to work with you instead of IF to work with you.
  • If you have a client with one bank account and 400 transactions, that’s going to take significantly less time than if you have a client who has 4 bank accounts each with 100 transactions.
  • Some of the processes include pre-screening clients to ensure they valued her services.
  • However, any error or oversight that may appear on the sheet is fully at your business’s expense.

Ideally, hire part time bookkeepers when you can do some of the accounting yourself, and could use extra help for employee timesheets, accounts payable, and accounts receivable tracking. Even if you hire a part time bookkeeper, your management would still have to review their work. Bookkeepers are financial professionals who document the financial accounting and records of a business. Ultimately, hiring a bookkeeper or financial management company will be different for every business and bookkeeper costs will vary.

Bookkeeping Tools and Software

On paper, a part time bookkeeper may look like an attractive option. However, any error or oversight that may appear on the sheet is fully at your business’s expense. Your bookkeeper what is payroll expense will go over your reports to help you understand your financial situation, but may not provide financial or business advice (even if they’re a credentialed CPA).

How Much Does Bookkeeping Cost (In-house & outsourced)

What I recommend when you’re starting out is to begin with your hourly rate and transition your client into a fixed monthly rate. It’s really hard to figure out what to charge someone without actually doing the work and finding out how much time your client’s account will take you each month. Many times you’ll be discovering things about the business as you get to know your client, and you may even find some issues your client didn’t know were there. Whether you’re hiring in-house or outsourcing your bookkeeping, finding someone that has the right software tools to make finance management easy is important. Hiring an outsourced bookkeeping agency can seem overwhelming at first glance— but it can be an extremely cost-effective, simple solution with many benefits that can help your business grow.

The cost of full-service accounting is hefty, and CPAs tend to charge a higher hourly rate than bookkeepers. GrowthForce can serve as your outsourced advanced bookkeeping and accounting department. If either part-time or in-house bookkeeping is not the ideal solution, switching to outsourced bookkeeping or accounting could be your best option. Many businesses are concerned about switching over to outsourcing, not understanding how the pieces fit together with this model.

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. To avoid clients not paying their bills after work has been completed, it is important to move toward expecting some form of payment before the job is done, such as a deposit or retainer. Once you decide what to charge, you’ll also need to consider additional terms for collecting payment from your clients. Hourly billing can be a good option for bookkeepers because it is simple to implement.

Charge your worth when it comes to bookkeeping services

It’s also true that experience in higher-paying bookkeeping services (more on this shortly!) affects your pay. If you are working on a project basis, you will need to invoice your clients for the work you have completed. You should include all the relevant details on the invoice, such as the hours worked, the tasks completed, and the total cost. Accounting and bookkeeping software can simplify managing your financial transactions—most banks allow you to download account information directly into the program. After you load the data, your only task is to review the entries.

Again, the best course of action for you to take when setting prices is doing your research. Take a look at industry averages, rates by state, and more to get an idea of how much to charge your clients. If you don’t have your clients pay in advance, you can also charge a late fee if a client doesn’t pay an invoice on time. This is typically a percentage of the invoice, such as 2% or 5%. You should document this in your client intake form or accounts receivable policies and also include your late payment terms on the invoice so the client knows the fee.

From there, the total pay is determined with the applicable taxes and withholdings. In the accounting software, the primary journal entry for total payroll is a debit to the compensation account and credits cash. The average hourly rate for freelance bookkeepers ranges from $26.91 to $43.57. Depending on your geographic location, this amount will be more or less than the average national rate of $34.67 per hour. Another option is to work as an in-house bookkeeper, which typically earn a salary of $49,672 per year, or the national average of $24 per hour.

When you’re setting your hourly rates, you have to think about the frequency of service for each of your clients. Some clients require more frequent attention than others, and there are even certain times of the year that might be busier than others for your clients. Generally, you’ll charge a lower rate for clients you see more often. Like so many jobs, experience influences hourly rates for bookkeepers. New bookkeepers will enter at a lower rate than those with years of experience under their belt.

QuickBooks Live Bookkeeping is, hands down, why I have been able to stop waking up in the middle of the night panicking about the financial end of my business. Learn how our Live Bookkeepers are helping small businesses get more done. As a contractor, you have flexibility, and you can terminate the contract at any time if either of you are dissatisfied with it. As an employee, there are more hoops for an employer to jump through to terminate employment. Nick Charveron is a licensed tax practitioner, Co-Founder & Partner of Community Tax, LLC.

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