Spending Money
Keeping track of your financial records is a necessary evil in the business world. Bookkeeping costs can be a big hassle, especially for small businesses. Did you know that 40% of small business owners say that bookkeeping expenses and taxes are the worst part of owning a business? However, it’s not unheard of for small business owners to pay more than their fair share regarding bookkeeping.
Whether you have an in-house bookkeeper or you’ve hired someone who works for you remotely, bookkeeping is a costly expense. It’s also very time-consuming, especially for small business owners who decide to tackle the project themselves!
Understanding how much bookkeeping should cost helps you determine if you’re paying a reasonable amount. It will also help you see how to manage and even lessen this cost.
Related: K9 Bookkeeping Pricing
How Much Does Bookkeeping Cost?
Your bookkeeping costs will largely depend on who you’ve hired to do the bookkeeping and how much time it takes them to complete their tasks. Bookkeepers generally manage all aspects of a business’s ledger (financial records).
You can expect a bookkeeper to complete the following tasks for you on a daily or monthly basis:
⦁ Use bookkeeping software, databases, and spreadsheets
⦁ Record financial transactions in the appropriate software
⦁ Add costs and income into the software
⦁ Produce reports such as income and balance statements
⦁ Monitor reports for accuracies
⦁ Report and reconcile any differences or inconsistencies
These responsibilities are essential for helping a business run smoothly. Determining how much bookkeeping will cost your business depends on the bookkeeper you hire.
You have three options for hiring bookkeepers. You can hire someone to work in-house part-time, full-time, or hire a remote accountant. Each of these options will require a different payout.
In House
In-house workers will always cost more because they’re entitled to some benefits in addition to their salary. This largely depends on the state you’re operating out of, so you’ll need to check your state’s laws to determine whether you need to offer benefits to a part-time employee.
Generally speaking, the average annual salary for a full-time, in-house bookkeeper is around $41,560. A part-time bookkeeper can expect to make roughly half of that salary.
This is a significant expense for small businesses, so many people use a remote bookkeeper instead.
Remote
Remote bookkeepers are a popular choice for small businesses because you don’t have to offer them benefits, and they generally cost less. Many remote bookkeepers work monthly, recording your financial data at the end of each month and generating reports for you monthly.
The average hourly salary for remote bookkeepers is $16. You can expect to pay anywhere between $500-$2,000 per month, depending on how many hours your bookkeeper needs to put in.
The amount you pay your remote bookkeeper depends on more than just the hours they put it. You can also decide their rate based on their experience, proficiency, and whether you hire an individual or work with a virtual team.
This can be a cost-effective solution for small businesses that aren’t generating much revenue yet. However, if your business has expanded significantly, you could end up paying a remote bookkeeper more than you’d pay someone in-house.
Do you need a reliable bookkeeper who can help you with your taxes as well? Head on over to K9 Bookkeeping to learn how they can help!
Can You Lessen Your Bookkeeping Costs?
There are certainly ways to streamline your bookkeeping process. If you can make the process more efficient and simplified, then that will result in your bookkeeping putting in fewer hours to achieve the same results, and this can cut down on how much you’re spending.
Here are a few tips you can use to make the bookkeeping process easier and less time-consuming:
⦁ Organize Your Financial Documents- Many businesses make the mistake of hoarding their financial documents throughout the year and only sorting through them when tax time comes around. If you use software that allows you to scan and upload images of receipts and other financial statements, then you don’t have to worry about sorting through a stack of paperwork down the line.
⦁ Categorize Expenses- Always categorize your expenses when inputting them into your bookkeeping software. This will help keep everything organized so when it’s time to ⦁ pay taxes, you’re not fruitlessly searching through an entire year’s worth of expenses to find a single transaction.
⦁ Regularly Review Your Finances- Many businesses use monthly reports to review their business finances. However, this isn’t the most efficient method. If you wait until the end of the month to review your finances, it’s easy to become overwhelmed and miss irregularities and other issues. Commit to reviewing your finances once a week. You’ll be able to spot any problems more quickly and be able to correct them before they snowball into a bigger problem.
Related: How is K9 Bookkeeping So Affordable?
How To Choose The Best Bookkeeping Method For Your Company
The best bookkeeping method for your company will depend on your company’s size and how much revenue you’re generating. Small businesses that are still getting off the ground and don’t have excessive financial transactions to track will benefit from hiring a remote bookkeeper.
A remote bookkeeper can accurately record, track, and review your financial data without costing you as much as an in-house bookkeeper. However, once your business has expanded and you’re making significant financial transactions, your business could benefit from hiring someone in-house.
Start them off part-time, and when your business grows large enough to cover the extra expense, offer your bookkeeper a full-time position. By then, you’ll already know they’re a perfect fit for your team!
Related: Why Should You Use K9 Bookkeeping?
Conclusion
Bookkeeping is a significant expense for any company. By knowing how much bookkeeping should cost you and how to lessen that expense, you’ll be better able to choose the best bookkeeping method for your company!
Are you looking for a reliable, professional bookkeeping service? Check out K9 Bookkeeping to learn how they can help manage your business’s finances!
We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on bookkeeping, to ensure your business is financially sound and ready to grow to the next level.
Running a business is hard work, bookkeeping shouldn’t be.
Let our team of professional bookkeepers take care of your books and receive accurate, detailed reports every month. Our team of experts is laser-focused on the latest trends and premier customer satisfaction, so you can always be sure you’re getting the best care and service. Your personal account manager will focus on handling your books, leaving you to focus on growing your business and leading it forward.
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