Is your small business at a place where you’re considering hiring the help of a bookkeeper for your accounting? That’s great – this is a big step in ensuring your small business will be financially healthy. A professional accountant can accomplish many things that might be hard for you to do with only basic financial knowledge.
Even if you think you’re pretty good at dealing with your business finances, professional bookkeepers are specifically trained to help save you money. They achieve this by being able to notice redundancies and inefficiencies, getting your book ready for tax time, and making sure all of your bills are paid time to avoid getting charged fees.
But like all good things in life, this service isn’t free. The cost of a bookkeeper will largely depend on the scope of their expertise and responsibilities. However, it’s still a good idea to consider hiring the services of a bookkeeper since you may actually end up saving money over time. Here are a few points to consider:
1. What you should expect to pay a bookkeeper
As we already mentioned earlier, there are certain costs involved with hiring small business accountants. These costs will depend on many factors such as whether you need the person to be on site, how much experience you want, the extent of their duties, and more. First, try to establish the specific goals you want to achieve with hiring help. Is it just for someone to manage your books, making sure everything is neat and organized or do you wish to have someone with a strategic eye for the long term.
Another thing that’s worth considering is if you prefer that they use a specific kind of software. The different accountant will have experience with different software. Some will be familiar with QuickBooks while some may be experts in Bench, Xero, Zoho Books, or something else completely.
2. Part-time costs for bookkeeping
Many small business owners who hire a bookkeeper for the first time, do so on an hourly basis. This can work great for those with a smaller budget since you will control how much to pay. Bookkeeper fees range from $40 to $60 per hour. You can also choose to instead hire a certified public accountant (CPA) who not only has accounting knowledge but can also help you with your taxes.
The costs of hiring a CPA will be higher and can range starting from $75 an hour, with some charging $200 and more. On top of looking for favorable hourly rates, you should also have an estimate on how long you expect it will take to complete the work. Smaller businesses may only require a couple of hours a week while bigger and more complex finances may need a lot more time.
If you’re having a hard time estimating this, then make a list of the financial duties that you were doing yourself. You can give this information to the bookkeep and ask them to tell you how many hours it would take them.
3. Salaried or full-time costs for bookkeeping
If the amount of accounting you need takes a lot of hours to complete, it may reach a point where the hourly rate will exceed a flat fee or a salary position. At this point, it’s best to talk to your accountant and see if they are willing to work for a flat fee or consider hiring one as part of your staff. Based on recent salary estimates conducted by Glassdoor, bookkeeper salaries range from $25,000 to $49,000. The final price largely depends on the location and level of expertise. If you’re considering bringing someone in full time, factor in how much it will cost you to provide them with benefits.
4. Software costs for bookkeeping
Let’s discuss accounting software. Your business may already utilize certain accounting software and so your fees for that should already be factored in. However, if you don’t, each bookkeeper will have a different opinion on which software is best for your business. Every software will have different costs associated with it that you need to factor in.
Some accounting software will have a one-time flat fee. This can range from around $200 to $350 depending on the features you need. There is also software which is billed monthly, usually with tiered pricing. For the latter, the cost will be about $10 to $50 per month (for the most part). One thing remains constant – professional business accountants won’t be satisfied with the functions of free accounting software.
5. Places a bookkeeper will help you save money
When you hire an accountant or a bookkeeper, look at it as an investment. Although you will be paying for their services, quite often when a professional does your books, you will find that the savings associated with that will be bigger than the cost of the bookkeeper. Let’s look at some of the things they can help you save money on:
- Improperly completed taxes and withholdings
- Late fees from unpaid bills
- Redundancies and cost inefficiencies
- Early payment supplier discounts
- Delinquent payments collection
- And much more
6. Weigh the costs and benefits of hiring a bookkeeper
When you finally make the choice to hire a bookkeeper or an accountant, it’s important to do the same diligence as when hiring any employee. First, establish a budget that you can afford, then request quotes from a couple of candidates. Don’t forget to make an audit of the time you are spending, any duties you believe you may need, and it’s also always good to get a second opinion. In certain situations, it may be a good idea to hire someone for a one-time project. You can look at it as a test run.
After reading this article, we hope you are able to get a better sense if you can or can’t afford an accountant. Keep in mind that even if you’re having a hard time seeing all the possible benefits now, down the road it could end up being a great investment.