How Much Does Bookkeeping Cost for a Business?
The cost of bookkeeping for a business varies by the size and the needs of the company, as well as the responsibilities put on the bookkeeper. Bookkeeping responsibilities can range from data entry of invoices, paying bills, balancing banking and credit card statements, payroll, and sending out invoices. In addition to this, the cost will be impacted by the processes you have in place, the type of accounting system you use, and the number of transactions on a daily/weekly/monthly basis.
What Does a Bookkeeper Do?
There’s a difference between bookkeeping and accounting, and in some cases the work may be similar. The primary function of a bookkeeper is to record transactions (receipts and payments) and keep them organized. Many businesses are primarily concerned with keeping this up-to-date to ensure they have an accurate financial picture and are staying compliant with basic business principles. If they are responsible for paying bills, it’s important that they stay on top of deadlines and work with their boss on the systems used for timing when bills are paid. Bills may come in every day, but it may not be productive to make this a daily task. It is recommended to have a system in place so the person paying the bills is doing this on a set routine and that they have the resources (money in the bank) to pay the bills without checks bouncing. A bookkeeper may also be responsible for the collection of debt, or at least communicating when someone has an issue with paying their bills, in order to keep the flow of cash stable.
There are a couple different ways to handle the bookkeeping. A bookkeeper can be hired and work directly for the company, either part-time or fulltime, depending on the amount of work needed to be done. This work could also be outsourced to a company, like All About Businesses, which functions as an offsite resource. Either way, as a business owner, you will need to overlook the work of both an inhouse bookkeeper or a virtual offsite bookkeeper. Let’s take a look at both the costs and the pros and cons of both.
Part-Time vs Full Time Bookkeeper
The cost of this may vary depending on where your business is located. There are resources online to find out what this may cost in your area, or you could check with other businesses that have a bookkeeper on staff. Hiring someone to join your team on a full-time basis could cost you between $3,000 to $5,000 per month, plus payroll taxes, unemployment insurance, and benefits your company has like PTO, 401K, and insurance. Someone joining your team will likely need to be trained and supervised. This could be someone reporting to the owner, the office manager, or some other organization structure. If there are a lot of day-to-day invoices, receipts, billing, and financial responsibilities, then having someone in-house may make sense. When you include the cost of an employee above and beyond their actual pay, this cost is multiplied between 20-30%. An employee making $4,000 per month is actually costing a company somewhere between $4,800 and $5,200.
Virtual vs Offsite Bookkeeper
The cost on this will vary more based on the amount of work you have them perform and may cost a business between $500-$2,500 per month. This is inclusive of everything, so when you compare this to the cost of an inhouse bookkeeper, it will usually always be more cost effective. Virtual bookkeepers work with a team, so if they have a question on something they have resources to go to. One of the biggest benefits of a virtual bookkeeper is the ability to customize the services you need and change them as your situation changes. They have the flexibility to grow with your company and are always there when you need them. You never have to manage them to ensure things get done on time, and they don’t take up “office space,” which is something else having an in-house bookkeeper will need like a desk, computer, etc.
In today’s world of cloud computing, and most companies using Quickbooks or some other online form of bookkeeping and accounting, having an virtual bookkeeper is a lot easier than one might think. With cloud computing it is easy to review the numbers when you want to, see updates as they happen in real time, and minimize the need for having meetings to discuss the information when all the information is right at your fingertips. Our clients always have access to the data in real time and we are available around the clock. Feel free to reach out to us to learn more about our specific services and how we may be able to help you with your bookkeeping and accounting needs, no matter what size company you are.