Many small business owners try to manage bookkeeping themselves to save costs. However, this can lead to costly mistakes. In fact, 42% of small business owners admitted they have limited to no financial literacy. So how do you handle your business’s finances smartly?
That’s where bookkeepers for small businesses come to the rescue. But how much do bookkeepers charge for small businesses? Let’s break it down so you can understand the costs and benefits of investing in professional bookkeeping services.
What does a bookkeeper do?
A bookkeeper plays a critical role in managing the financial health of your small business. Their responsibilities typically include:
- Recording financial transactions
- Reconciling bank statements
- Managing accounts payable and receivable
- Generating financial reports
- Handling payroll processing
- Preparing your business for tax season
In simpler words, bookkeepers keep your financial records accurate and up-to-date, giving you the clarity to make informed business decisions.
Types of bookkeeping
Your bookkeeping needs depend on the size and complexity of your business. Let’s look at the two primary types of bookkeeping services:
Basic bookkeeping
Basic bookkeeping focuses on essential tasks such as transaction recording, bank reconciliations, and simple financial reporting. It’s ideal for solopreneurs or small businesses with straightforward financial operations. Basic bookkeeping ensures your records are accurate without diving into more strategic financial planning.
Full-service accounting
Full-service accounting is a more comprehensive solution. Along with handling everyday bookkeeping tasks, it includes strategic financial insights, tax planning, and compliance services.
This option is well-suited for businesses with multiple revenue streams or those planning for growth. While it’s more expensive, the value it provides in terms of financial clarity and time savings can outweigh the cost.
Bookkeeping fee structures
The cost of bookkeeping services varies based on the fee structure used by the bookkeeper. Here are the most common pricing models:
Hourly rate
Charging by the hour is a common practice among bookkeepers, especially for smaller or one-off tasks. Rates can range widely, from $20 to $100 per hour, depending on the bookkeeper’s experience, location, and the complexity of your financials. This structure works well if you only need occasional help, such as reconciling accounts at the end of each month.
Monthly retainer
A monthly retainer is a fixed fee you pay for ongoing bookkeeping services. It’s often priced based on the expected volume of work and the level of service. Monthly retainers can range from $300 to $2,500 for small businesses, making it a predictable option for budgeting.
Flat fee
Some bookkeepers charge flat fees for specific tasks, such as preparing financial reports, setting up a bookkeeping system, or handling payroll. Flat fees are typically agreed upon upfront, offering clarity about costs.
Percentage of revenue
In some cases, bookkeepers may charge based on a percentage of your revenue, usually between 1% and 3%. While this model ties bookkeeping costs to your business’s success, it may not be ideal for businesses with fluctuating revenue or seasonal spikes.
Monthly cost of bookkeepers for small businesses
Want to know how much it costs to hire bookkeepers for small businesses? Here is a quick monthly breakdown to help you figure out what fits your budgets best:
In-house bookkeepers
If your business needs full-time support, hiring an in-house bookkeeper is an option. Salaries for in-house bookkeepers typically range from $3,000 to $4,500 per month, factoring in wages, benefits, and payroll taxes. This is a good fit for larger small businesses with complex financial requirements, but it’s often overkill for smaller operations.
Freelance bookkeepers
Freelance bookkeepers offer flexible, cost-effective solutions for small businesses. Depending on their expertise and the scope of your needs, freelancers charge an average of $22.81 per hour. They’re ideal for businesses that require consistent yet part-time financial support.
Online bookkeeping subscriptions
Digital bookkeeping services are increasingly popular among small businesses. In fact, around 64.4% of small business owners rely on accounting software for their bookkeeping needs.
Platforms like QuickBooks Live, Bench, and Receiptor AI offer subscription packages that range from $200 to $500 per month. These services combine automation with access to professional bookkeepers, making them an efficient choice for tech-savvy businesses.
Final Thoughts
When your bookkeeping is taken care of, you can focus on growing your business. Bookkeepers for small businesses help save time, money and headaches that come with sorting your financials. Ready to empower yourself financially and liberate yourself from the nuances of bookkeeping?
Sign up for a free trial with Receiptor AI and let our AI-powered tool take over every receipt from Whatsapp, emails, and manual records. Your bookkeeping? Taken care of. Your finances? In safe hands. Your business? Flourishing.
