How Much Does a Bookkeeper Cost in 2024?

A bookkeeping service is a company that offers bookkeeping services to their clients on a monthly and yearly basis. Examples of bookkeeping services are EcomBalance, Bench, Pilot, and Xendoo. In order to answer this question, we went out and researched 10+ sites looking at bookkeeping services, accounting firms, and freelance bookkeepers. Most business owners are great at what they do, but it can still be tedious when they have to reconcile the daily reports and manage all the paperwork after a long day at work.

Other elements are completed at certain time periods as necessary to complete a business task. You’ll find that bookkeepers who have completed all 3 programs have a much higher average hourly wage. Small businesses recovery rebate credit are most often prone to outsourcing their bookkeeping to third parties. Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development.

Outsourcing the work to a seasoned bookkeeper can allow you to focus on your business plan and growth. Double-entry bookkeeping is the practice of recording transactions in at least two accounts, as a debit or credit. When following this method of bookkeeping, the amounts of debits recorded must match the amounts of credits recorded. This more advanced process is ideal for enterprises with accrued expenses.

Activity-based Cost Accounting

There are different ways to organize files, depending on what you need to store. When manually doing the bookkeeping, debits are found on the left side of the ledger, and credits are found on the right side. Debits and credits should always equal each other so that the books are in balance. To illustrate this, assume a company produces both trinkets and widgets.

• For additional features, these were elements that fell into the “nice-to-have” category that not all software providers offered, either as part of their regular plan or as a paid add-on.
• At its core, bookkeeping is about recording financial data, while accounting is about interpreting financial data.
• Businesses with high inventory volumes can use ProfitBooks to control spending and prevent unexpected expenses.
• Depending on what kinds of services your bookkeeper provides, they may be able to issue and process paychecks or direct deposits and make tax payments (withholding) on behalf of your employees.
• First, it ensures that you’re deducting the right amounts when you file your taxes and second, it allows you to prove your deductions should your business be selected for a tax audit.
• Lalea & Black is a full-service Los Angeles CPA firm specializing in outsourced accounting, bookkeeping, business management, and tax services.

Because of the extra training, what accountants charge differs from bookkeepers. Some of the best investments you can make as a business owner are those which allow you to focus on the core of your business while outsourcing tasks that aren’t your specialty. Bookkeepers do a lot of tedious work, but they can do it a lot more efficiently because they’re professionals. You’ll know the work is accurate, and your numbers will be in balance when your bookkeeper takes care of it. It’s important to note that most firms charge extra for tax preparation to have you fully audit-ready, so you shouldn’t expect that to be included in your standard bookkeeping fees. The bookkeeper’s exact services will also impact the cost, along with how experienced the bookkeeper is and their reputation.

Cost for a Freelance Bookkeeper

On the other hand, if you have in-depth tax and finance knowledge beyond the bookkeeping basics, you may be able to get the job done. Now that you have a better understanding of bookkeeping, you may be wondering if it’s something you want to take on yourself or with the help of a professional. When making this decision, there are two things you should keep in mind.

Intermediate Services ($500 – $1,500+ per month):

Financial statements can yield valuable insights into how well your small business is managing income and expenses. You’ll also need to present up-to-date financial statements to lenders if you plan to apply for small business financing at some point. Individuals who are successful bookkeeping professionals are highly organized, can balance ledgers accurately, have an eye for detail and are excellent communicators. At the end of the accounting period, take the time to make adjustments to your entries. For example, you may have estimated certain invoices that are later solidified with an actual number. Though often confused for each other, there are key differences between bookkeeping and accounting.

Setting Up a Chart of Accounts

Managers appreciate cost accounting because it can be adapted, tinkered with, and implemented according to the changing needs of the business. Unlike the Financial Accounting Standards Board (FASB)-driven financial accounting, cost accounting need only concern itself with insider eyes and internal purposes. Management can analyze information based on criteria that it specifically values, which guides how prices are set, resources are distributed, capital is raised, and risks are assumed. You must understand what bookkeeping services you need and whether it’s best to hire a professional bookkeeper full time, part time, or outsource the service. Overheads are costs that relate to ongoing business expenses that are not directly attributed to creating products or services.

Even if you’re “not a numbers person,” or even running a not for profit operation, there’s no denying that it’s cash flow that keeps your business afloat. Lalea & Black is a full-service Los Angeles CPA firm specializing in outsourced accounting, bookkeeping, business management, and tax services. Full-time employees also tend to be more involved with the company for which they work, and you should receive greater long-term benefit from working with someone who knows your business thoroughly. Just about every small business requires a basic form of bookkeeping in the beginning.

Office staff, utilities, the maintenance and repair of equipment, supplies, payroll taxes, depreciation of machinery, rent and mortgage payments and sales staff are all considered overhead costs. The double-entry system of bookkeeping is common in accounting software programs like QuickBooks. With this method, bookkeepers record transactions under expense or income. Then they create a second entry to classify the transaction on the appropriate account. When it’s finally time to audit all of your transactions, bookkeepers can produce accurate reports that give an inside look into how your company delegated its capital. The two key reports that bookkeepers provide are the balance sheet and the income statement.

How Much Does Bookkeeping Cost?

These activities are also considered to be cost drivers, and they are the measures used as the basis for allocating overhead costs. Standard cost accounting is a traditional method for analyzing business costs. It assigns an average cost to labor, materials and overhead evenly so that managers can plan budgets, control costs and evaluate the performance of cost management. Many small businesses prefer standard cost accounting due to its ease and simplicity.

If you only have a few employees and don’t do a lot of transactions or have hundreds of invoices to go through, you should be able to get by with part-time help. There are dozens and dozens of bookkeeping options available and the choices may seem overwhelming. We’ve analyzed and rated the best online bookkeeping services to help you make the best decision when choosing the right one.