How Much Does Bookkeeping Business Cost For Small Business In 2023?

the Bookkeeping plays an indispensable role in running a company. Still, it’s also one of the most complex and challenging aspects for business owners who want to have a successful business. If you are considering hiring bookkeeping services, you may want to know, “How much does bookkeeping cost?”

The bookkeeping rates can vary. It may range from $400 to $2500 per month, depending on the size and complexity of the business, the number of monthly transactions, and the bookkeeper’s experience and expertise.

What Is A Bookkeeper?

A bookkeeper prepares and manages accounts, records, and tracks the daily financial transactions of a company, ensuring they are accurate and easy to review. 

People are often confused between bookkeepers’ and accountants’ work and think they are the same. However, bookkeeping is actually a part of the accounting process. Bookkeepers handle the daily financial transactions of a company while accountants analyze that data and turn that into a report, from then advising business owners. 

See more: What Is Bookkeeping? 2023 Best Practices By Accounting Experts

What Does A Bookkeeper Do?

Bookkeepers are in charge of providing accurate financial transactions daily using accounting software

Depending on the complexity and size of the business, their duties may include:

• Record and organize financial records, cash flow statements, bank documents, and loss statements
• Create and send invoices to customers
• Receive payments from customers
• Reconcile financial statements
• Reconcile bank and credit card accounts
• Manage accounts receivable and accounts payable
• Review reports and provide advice and share recommendations with business owners and support the accountant department
• File business tax returns
• Handle payroll and withholding taxes 

How To Calculate The Cost Of Hiring a Bookkeeper?

The cost of hiring bookkeepers can vary widely, depending on some factors, such as

Business Industry

The business industry affects the cost of hiring a bookkeeper. Companies in specific industries, such as manufacturing, healthcare, and finance, may need more complex bookkeeping services than others, which usually cost more.  

See more: What Are Bookkeeping Services? 2023 Guide By Accounting Experts

Experience And Expertise Of The Bookkeeper

Experience and expertise are among the most critical factors affecting the average cost for bookkeeping services. Bookkeepers with specialized degrees and years of experience may charge more than those with little experience and no degree. 

Size & Complexity Of A Business’s Finances And Taxes

The complexity and size of your business affect the bookkeeping rates. Medium to large companies tend to have more complex business regarding financial and tax situations than startups and small businesses. Those difficult financial situations cause a higher cost of complexity because it requires experts to deal with them.

For example, medium to large companies have more vendors, clients, contractors, bank accounts, investments, or other assets than small businesses. Therefore, business owners of these companies might need a bookkeeper with years of experience and various skills to handle them all. That’s why those bookkeepers can raise the cost.

Service Frequency

One factor that can also impact the bookkeeping pricing is the service frequency which only applies to freelancers and outsourcing. Many bookkeepers adjust their hourly rates depending on how often the business needs them or what the company needs them for. Some clients will be one-time deals, while others need bookkeepers regularly, such as monthly, quarterly, or annually. 

So it’s no surprise that bookkeepers will reduce their rates to clients they work with frequently rather than clients who work only a few times a year.

See more: How To Bookkeeping For Small Business (8 Must-Read Steps)

Location

You can get a lower cost of hiring a bookkeeper if you outsource to some countries in Asia like Vietnam, India, China, etc. Because the cost of outsourcing in Asia is much lower than in Europe or America, it can be one-third compared to Western countries. 

How Much Does Bookkeeping Cost?

In-House bookkeepers

Range: $900 – $4,300 per month

Hiring in-house bookkeepers can be the best for a long with lots of employees and a high volume of daily financial transactions. 

You can have two options for hiring a bookkeeper that is on a full-time or part-time basis. Hiring a full-time bookkeeper will be more expensive than a part-time basis, so this option is best for large businesses. Small business owners can hire part-time employees to save money in the long run.

According to Salary, the average bookkeeper rate in the United States is around $3,571 in 2023

According to the data from the Bureau of Labor Statistics, Glassdoor, Payscale, and Indeed, the average salary of an in-house bookkeeper can range from $900 to 4,300 per month, and an average hourly rate can be from $20 to $22.

With the same data from Salary, New York offers higher rate than other cities in the United States

Besides, the location also affects the in-house bookkeeping rates. For example, the average bookkeeper’s salary in the United States is around $3,571, whereas in New York is approximately $4,196.

Remember that when hiring an in-house bookkeeper, this salary does not include training costs, employee benefits, or social security tax.

See more: How To Start A Virtual Bookkeeping Business In 2023?

Freelance Bookkeepers

Average hourly rate: $21

Hiring freelance bookkeepers can be the best for small businesses.

In the same report, the average hourly rate for a freelance bookkeeper is $21.90 per hour. This cost doesn’t account for location, expertise, or services. So, freelance bookkeepers are an excellent option if you only need a supporter to help you with the books occasionally. 

Hourly may be a cheaper option. However, it is only sometimes suitable for all types of businesses, especially for medium to large companies. Because if your business is about to scale up and you have to deal with thousands to million transactions per month, then the cost may be out of control.

Freelance bookkeeping pricing in the United States. Source: Upwork

Outsourced Bookkeeping

Range: $250 – $1,500 per month

Outsourcing bookkeeping services are suitable for all types of businesses, from new and small businesses to mid and large enterprises. The average cost for bookkeeping services can range between $250 – $1,500 per month, depending on the complexity of services required.

The first and most significant advantage of outsourcing bookkeeping services is the cost. Outsourcing services is similar to hiring an in-house to handle primary bookkeeping responsibilities without the added costs of benefits such as healthcare, sick leaves, trips, or social security tax. 

Secur Accounting is considered the best place for outsourcing bookkeeping services. Visit Secur Accounting for more information.

Outsourcing bookkeeping can help you save time and cost

Frequently Asked Questions

Is A Bookkeeper Cheaper Than An Accountant?

Bookkeepers generally charge lower fees for their services than accountants. A bookkeeper can charge anywhere from $20 to $40 per hour, while an accountant can charge $150 to $450. Because they have different roles and perform various functions.

Again, bookkeeping is a part of the accounting process. Accountants can perform all functions of bookkeepers and can do more than that. They can provide insights and business financial reports, then give strategic advice to business owners. 

An accountant can be considered a bookkeeper, but a bookkeeper can only be an accountant with the appropriate certification. To become an accountant, they must meet specific education and certification requirements. 

Is It Worth Paying A Bookkeeper?

Depending on your business’s needs and demands, a bookkeeper is worth the pay because

• A bookkeeper will help you save money. 
• A bookkeeper will give you more time to concentrate on your core business functions.
• A bookkeeper can give you a fresh perspective, a new perception, and essential advice on managing your money and running your business effectively. 
• A bookkeeper can manage your books effectively and ensure they are up-to-date, organized, and accurate. That means a bookkeeper can help you prevent errors.
• A bookkeeper helps you gain the potential to pay less in taxes as they know which business expenses are tax deductible.
• A bookkeeper can increase your profit by 16%, according to studies.

How Do I Price Myself As A Bookkeeper?

Besides all those factors that can affect your cost, you should consider the average rate of bookkeepers on the market. From then, you can price reasonably that meet the client’s requirements. Besides, there is one more way you can charge your clients based on their gross income, which is around 1% – 3%.

3 types of bookkeepers can offer you different services. So, when choosing a bookkeeper, you should think about something other than the cost but what matters most to you. Part-time bookkeepers and freelancers are a solution for new and small businesses, while full-time bookkeepers are more suitable for established companies. And outsourcing bookkeeping services suits all types of businesses. 

If you are looking for Outsourced Accounting Services, Secur Accounting is happy to help. Our team ensures all your expenses are recorded and tracked correctly. We are small business bookkeeping that has many years of working in the industry that confident with business tax deductions and compliance requirements, which help to save you time and money. Contact us here for further discussion.