So, you’re thinking to yourself, “What bookkeeper cost can I expect to pay?”
If you’re starting to think about this, I hope it means that your business is growing quickly and you realize that bookkeeping shouldn’t be on your plate.
My Experience with Bookkeeping Costs
My name is Connor Gillivan and I’m an Owner and the CMO of EcomBalance. We’re a monthly bookkeeping service specialized for the eCommerce industry, software companies, digital agencies, and other online businesses.
Before running EcomBalance, I was in the same shoes as you…
…Wondering how much I should be paying a bookkeeper to handle my company’s books each month.
Throughout the years, my business partner and I have handled it all sorts of ways:
- We did the books ourselves. Not the best option! lol
- We had our Accountant handle it on top of our taxes. Didn’t work out as we wanted.
- We hired an internal Bookkeeper to manage our monthly books.
When we saw the true power of having your monthly books delivered on time without having to worry about it, we decided to start EcomBalance so we could provide the same service to other business owners.
Regardless of where you’re at, I want to answer that question for you so that you know what to expect as you go to hire a bookkeeper for your business.
Here’s what we’ll cover in this article:
- What Is the Average Cost of a Bookkeeper?
- What Determine’s a Bookkeeper’s Cost?
- What Is the Difference Between a Bookkeeper and a Bookkeeping Service?
- Will My Bookkeeper’s Price Increase Over Time?
- How Will a Bookkeeper Save Me Money?
- When Is the Right Time to Hire a Bookkeeper?
Without further ado, let’s dive into what you really came here for!
What Is the Average Cost of a Bookkeeper?
In order to answer this question, we went out and researched 10+ sites looking at bookkeeping services, accounting firms, and freelance bookkeepers.
Before we answered this question, we wanted to really dive deep into the industry and see what companies and individuals were charging.
Here’s what we found:
- For bookkeeping services, the average cost for general bookkeeping services ranges from $249 per month to $999 per month. This range depends on the size of your business and how complex it is. For example, if you’re a small business with sales under $1M/year, you can expect your price to be closer to $249 per month, on average. Similarly, if you’re running a business with sales over $1M/year, you can expect your monthly price to move towards $499 per month and up.
- For freelance bookkeepers, the average hourly cost is $20 to $25 per hour for a freelancer in the US, Canada, Europe, and other similar countries.
- For outsourced bookkeepers in the Philippines, the average hourly cost is $10 to $15 per hour.
Things to Consider:
- The ultimate price that you’ll pay for a bookkeeper will depend on the size and complexity of your business. The smaller and simpler, the lower the price. The larger and more complex, the higher the price.
- You have options as a business owner to dictate the price. You can hire a bookkeeping service which makes it completely hands off. Or you can hire a freelance bookkeeper that you have more responsibility for managing and keeping things aligned.
- These average bookkeeper costs are only based off of the research that we did and there could be some differences depending on where you’re looking and who you’re speaking with.
Our Pricing at EcomBalance
If you’re interested in working with us at EcomBalance, you can see where our pricing starts depending on how large your business is.
We provide custom pricing quotes to each of our clients based off of where their current financials are. Our goal is to find a price that makes sense for your business and aligns with how much time it will take for us to handle your books on a monthly basis.
What Determines a Bookkeeper’s Cost?
In general, bookkeepers and bookkeeping services base their costs off of how much time it will take for them to complete the monthly bookkeeping tasks that your business needs.
A lot of it depends on the current financial set up of your business and how complicated it is to work with from a bookkeeping perspective.
Let’s look at some examples.
Example #1: Simple to Work With Business
You own a small marketing agency that provides marketing services to other small businesses online. You already have your bookkeeping set up in Quickbooks Online and your books are up to date through the most recent month.
You have 2 bank accounts, 1 business credit card, and you use PayPal and Stripe to accept payments for your services from clients directly through your website.
Last year, you had sales of $500,000. You have a team of 5 full time employees and 5 part time contractors. Your expenses to run the business are quite small and you’ve bootstrapped the business from the start.
How a Bookkeeper Looks At This Business: This is a simpler business for a bookkeeper to handle. Nothing is too complex. The books are up to date so it doesn’t require any Catch Up or Clean Up work. There are only 2 payment processors to deal with. And overall, it shouldn’t take that much time to handle each month. A bookkeeper’s price for this business should fall in that $299 to $499 per month range.
Example #2: Difficult Business to Work With
You own a large eCommerce business that sells toys and baby products. Your bookkeeping is set up in Xero, but you are 6 months behind on your books.
You have 10 bank accounts, 3 business credit cards, and you sell through Amazon, Shopify, Walmart, and Etsy. Through those channels, you have 5 payment processors that you offer to your customers.
Last year, you had sales of $2M. You have a team of 10 full time employees and 10 part time contractors. You also have loans that you’ve taken out to help pay for inventory that you’re paying off every month.
How a Bookkeeper Looks At This Business: As you can tell, this business is much more complex. They have a plethora of sales channels, many bank accounts and credit cards, loans, and much more to deal with on the bookkeeping side. All of this data needs to be pulled into Xero and then categorized, reconciled, and made sense of each month. Plus, they need 6 months of Catch Up work. This will take a bookkeeper much more time and so the price will correlate.
What Is the Difference Between a Bookkeeper and a Bookkeeping Service?
A bookkeeper is an individual freelancer that you can hire to help manage your bookkeeping each month. They typically require more hand holding and guidance from you as the business owner and they have other clients that they are working on at any given point.
Bookkeeping services have bookkeepers within their company that are assigned specifically to your business to handle your monthly bookkeeping that you need done. You get a dedicated bookkeeper to work with on your books and you also get more support from the company overall and higher-up Bookkeepers, Accountants, and Financial Controllers.
Will My Bookkeeper’s Price Increase Over Time?
For the most part, bookkeepers only increase their price for clients if one of the following happens:
- Business Growth: Your business grows and it becomes more complex, hence it takes the bookkeeper more time to manage your books.
- You Make It More Complex: You make your business more complex by adding additional bank accounts, credit cards, loans, etc. that makes it take more time for your bookkeeper.
- You Want More Services: You want them to handle more bookkeeping work for you on top of the normal monthly bookkeeping services. For example, you want them to start handling your payroll and sales tax in addition to the normal monthly work.
How Will a Bookkeeper Save Me Money?
Are you currently handling your own bookkeeping?
If you are then you are already paying for the cost of bookkeeping, but in your own time.
For example, let’s say that you’re handling your own books and it takes you 15 hours per month to complete. As a business owner, your hourly rate can be estimated at a minimum of $50 per hour. That’s $750 per month that you’re currently spending to get your books done each month.
Not to mention that the 15 hours you’re spending on bookkeeping today could be spent on growth for the business in other, more productive ways. So there is an opportunity cost there as well.
In addition, here’s some other ways that bookkeepers can help you save money:
- They can point out monthly expenses that you can cut
- They can provide advice on how to make better gross and net margins based off of your reports
- They will give you a better overall understanding of your monthly financials so you can make smarter spending decisions
- They can highlight which customers you’re making the most money from and which are unprofitable so you can better optimize your sales, customers, and profits
When Is the Right Time to Hire a Bookkeeper?
As a general rule of thumb, the best time to hire a bookkeeper is as soon as your company can afford it.
Bookkeeping and accounting work shouldn’t be something that is on your plate if you are a serious entrepreneur looking to scale your business to 6, 7, 8 figures, and beyond.
When you keep bookkeeping on your plate, you sacrifice time that you could be spending on growing the business.
Going back to the example above…if you spent 15 hours per month on your bookkeeping to save on the cost of a bookkeeper, that’s 15 hours that could be spent on your advertising or SEO work or partnership building…all activities that could lead to higher sales and profits for your business.
If you were to ask me personally, I would hire a bookkeeper as soon as I started the business. I’ve been following this mantra for my past 3 businesses and it’s been a huge stress reliever.
The cost of a bookkeeper can vary depending on if you hire a freelance bookkeeper or a bookkeeping service.
Either way, it’s a smart business decision to get it off of your plate so that you can focus on growing the business and not worrying about doing the books.
Even if you have the ability to do the books, it’s not the best use of your time as a business owner and entrepreneur. Your job is to drive growth forward, hire the best possible people for the company, and stay focused on building.
If you still have questions about how much you can expect to pay a bookkeeper, comment below and we’ll be in touch. Or simply send us an email at [email protected] and we’ll be glad to help.
Until next time! Cheers!
EcomBalance is a monthly bookkeeping service for eCommerce companies. EcomBalance handles your bookkeeping and sends you a Profit and Loss Statement, Balance Sheet, and Cash Flow Statement by the 15th of each month. EcomBalance also has a sister company, AccountsBalance, that caters to agencies, software companies, coaches, and other online companies.