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How Much Does a Bookkeeper Cost?

When hiring a bookkeeper for your business, it’s important to know how much it will cost. Let’s dive into how much bookkeeping costs.

Small Business Owner Reviewing Bookkeeping - How Much Does a Bookkeeper Cost?

Running a small business is a tough task, and bookkeeping can be one just more area that keeps business owners up at night, as they may not have the experience or the time necessary to properly manage their own books. 

If you’re a business owner considering hiring an online bookkeeping service, one of the first things you’ll need to know is how much does a bookkeeper cost? Below, we’ll answer that question as well as highlight some other important topics related to bookkeeping.

Does Your Business Need a Bookkeeper?

In short, yes. Bookkeeping is not the most fun and exciting part of running a business, but in order for that business to be successful, it’s one of the most important. Having accurate financial information delivered in a timely manner, allows you to make better decisions for your business.

Bookkeeping can also better prepare your business for tax season by keeping your organized and having all of your important financial statements and documents ready to go – saving you both time and money.

What's the Difference Between a Bookkeeper and an Accountant?

You’ve probably heard the terms “bookkeeper” and “accountant”, and may be left wondering what exactly these two terms mean for your small business. 

Often times, these terms are lumped together, which can create confusion for business owners as they attempt to figure out the role for each within their business. While there is some overlap, there are also many key distinctions between the two that are important to highlight as they relate to their respective role within a small business. 

A bookkeeper is a profession within the field of accounting, and is typically in charge of managing the day-to-day financial functions of a business. Some of those functions typically include:

  • Managing accounts receivable and accounts payable
  • Recording transactions
  • Reconciling accounts
  • Paying vendors and other bills
  • Managing customer payments and invoices
  • Month-end close tasks
  • Financial statement preparation
A bookkeeper is typically one of the lower cost accounting fields due to the experience level, education, and certifications required relative to some of the other areas within accounting. Other accounting fields include CPAs, tax specialists, Controllers, and CFOs.
 
If you’re wondering, “How much does a CPA cost?” You might be surprised to find that a CPA can cost anywhere from $90 – $500 hour depending on a range of factors. Total compensation for a Controller averages $373,781 and $541,000 for a CFO. 
 
These highly paid positions are very costly, and don’t make financial sense for the overwhelming amount of small businesses. Xpanse’s all-in-one accounting solution can handle small business bookkeeping, tax, and CFO Services at an affordable flat fee.

How Much Does a Bookkeeper Cost?

The average cost of a bookkeeper ranges from $500 to $3,000 per month, depending on the size, complexity, and other particulars of the business. Some examples include:

  • Number of monthly transactions
  • Number of bank accounts, credit cards, and other accounts
  • Frequency and type of services you need
  • The Bookkeeper’s experience, location, and expertise
How much your small business will pay for bookkeeping will also ultimately depend on the fee arrangement. Fee arrangements for bookkeeping services typically fall under one of three categories, which we explore below.

In-House Bookkeeper

Most businesses that choose to hire a full-time, in-house bookkeeper do so on a salary basis. However, some may pay hourly, especially for part-time employees.

How much does a bookkeeper cost if you hire in-house? The short answer is: much more than an online bookkeeping service or freelancer. 

According to Salary.com the average total compensation for an in-house bookkeeper is $64,118 for 2022. This figure does not account for location, and also assumes the bookkeeper is entry-level with no specialized experience or qualifications.

It might make sense for a large business with complex bookkeeping needs year-round to have an in-house bookkeeper. However, for most small businesses, an online bookkeeping service is the better and more affordable option.

Hourly Bookkeeper (Freelance)

Based upon a recent study by Fit Small Business, the national average hourly rate for a bookkeeper is $37 per hour. This will change depending on location, certifications, and services performed.

Hourly pricing can be an attractive option if your business only needs their books done occasionally. However, this can often times be more costly come tax season if the books need caught up, or adjustments need to made to your business’s financials.

We’ve found that most small businesses require consistent bookkeeping services to keep their books in shape.

Flat Fee Bookkeeper (Xpanse)

Flat or fixed fee bookkeeping is the most straightforward of the three options given. It allows businesses to pay a set price each month, no matter the number of transactions or amount of work required.

Flat fees also make budgeting easier. Wouldn’t it be great if you could predict every cost your business will incur each month? That’s what flat fee bookkeeping does – takes the guess work out of the equation.

At Xpanse, finding the flat fee bookkeeping plan that’s right for your business is easy. Take a look at our Xpanse pricing calculator to get an estimate of what it will cost your business based upon what services you need. That way you pay only for what you need. Services can also be scaled up at anytime to meet the demands of your growing business.

Bringing on a flat fee bookkeeper may seem like just one more added expense, but it can actually be net savings in both cost and time. Having an accounting expert prepare your books each month will give you a better indication of how your business is doing on a monthly basis, which can allow you to identify areas for improvement and cost savings opportunities. Also, if you were to do the bookkeeping yourself, you would spend many hours each day, week, and month staying on top of things. With a flat fee bookkeeper, you can instead use that time to focus on growing your business.

What to Look For in a Bookkeeper

As with most professions, bookkeepers can vary significantly in many important areas, so it’s important to consider a wide arrange of criteria when selecting who’s going to maintain the financial records of your business.

Reviews

Look for a bookkeeper with great reviews from trusted sources. Ask how long they have been in business, their familiarity with your industry, and whether they have enough staff on hand to assist with tough questions and bigger projects.

All-in-One Accounting Service

Bookkeeping is a crucial part to running a successful business, but it’s not the only necessary accounting function. There’s also payroll, taxes, and CFO Services, among others. It’s important to look for a service that can handle all of the needs of your business. Keeping all your accounting needs under one roof can make things much simpler and cost effective.

Support

As an owner, you know running a business is not a 9-to-5 job, and questions often arise after-hours. It’s important to find a company that recognizes that as well, so look for a bookkeeping service that offers 24-hour support. You’ll be glad you did during those busy times!

Choose Value Over Cost

When deciding how much to spend on bookkeeping, think of who brings the most value over who offers the lowest cost.

One bookkeeper may charge a significantly lower fee than a different individual or company, but they may be lacking the relevant experience. Additionally, they may be one dimensional whereas a larger, more reputable company has the power of an entire firm behind you to answer all your difficult bookkeeping questions, while also serving as your business’s all-in-one accounting solution.

Contact Xpanse today to get started with $500 in free bookkeeping and find out why so many businesses nationwide are switching to Xpanse to handle their finances.

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