There are several aspects of being a business owner, and those aspects contribute to the business’s success. Everything from sales and production to employee retention is crucial. Bookkeeping also plays a part, even if it may not seem like the best topic.
Not many people would willingly sift through thousands of receipts and organize statements, especially when there is an entire slew of business operations to manage. If you find yourself in a similar situation, you may want to take the time to decide whether to hire a bookkeeper.
A bookkeeper can do wonders for your business, but the only question that is probably swirling around inside your mind is this: how much does a bookkeeper cost? The U.S. Bureau of Labor Statistics says that it costs around $47,000 a year to hire a bookkeeper for a small business, but it can differ based on additional factors, such as your bookkeeping needs and the location of your business.
What Do Bookkeepers Do
Let’s take things right from the top to help you understand what you are getting into. A bookkeeper is in charge of recording transactions and keeping track of a business’s finances. Here are a few common responsibilities of a bookkeeper.
- Assisting with payroll
- Posting journal entries
- Reviewing the general ledger
- Reconciling bank accounts
- Paying a client’s bills
Apart from all these things, it is a bookkeeper’s job to keep everything organized. That way, when the time to file your small business taxes comes, you can easily access all the data you need.
Bookkeepers may also work with accountants, who are responsible for more advanced tasks, such as assessing the health of a business or generating financial statements.
Basic Bookkeeping vs. Full-Service Bookkeeping (and Accounting)
There are two main types of bookkeeping you should know about when deciding on the type of bookkeeper to hire. These include basic bookkeeping and full-service bookkeeping, where the decision primarily depends on your business goals and requirements.
Basic Bookkeeping
As the name suggests, basic bookkeeping entails the basic stuff, such as payroll, employment taxes, and expense tracking.
- Time and Service: How much time it takes to do basic bookkeeping can vary based on the size and complexity of a business. Nonetheless, it often takes less time than full-service bookkeeping.
- Average Bookkeeper Cost Differences: Owing to the additional education and experience required to be a full-service accountant, the average cost of a bookkeeper is lower than that of a full-service accountant.
Full-Service Bookkeeping
Full-service bookkeeping is everything you would find in basic bookkeeping, with extra accounting services and financial statement analysis.
- Time and Service: Accounting demands a much higher level of time and service simply because accountants are in charge of managing the books and interpreting and analyzing the financial statements to report an overall view of the company’s financial health.
- Average Cost Differences: Due to extensive education and certification requirements, the average salary of an accountant will always exceed that of a bookkeeper.
Whether you go for basic bookkeeping in Santa Monica or full-service bookkeeping and accounting services, either option can help you be better prepared come tax season.
Choose the Right CPA Firm for Your Business
Partner with Jarrar & Associates for expert tax, accounting, and financial guidance tailored to your needs—so you can focus on growth.
Monthly Cost of Bookkeepers for Small Businesses
How much you have to pay for a bookkeeper’s services every month depends on several factors, including the type of service you choose, location, experience, and certifications. Whether you choose an in-house bookkeeper, a freelancer, or an online subscription service, each option comes with different costs and benefits. Now, let’s go over each option so that you can decide which one might be right for your operations.
In-House Bookkeepers
As we have already cited before, the U.S. Bureau of Labor Statistics claims the average pay of an in-house bookkeeper is $47,440 per year or $3,950 per month. This figure can fluctuate depending on location, experience, certifications, etc.
An in-house bookkeeper can be quite beneficial if you seek consistent hands-on support to manage your finances. Since they only work for you, they will gain a deeper understanding of the ins and outs of your financial operations. Plus, you can get real-time updates and quick responses if any problems arise.
The most prominent downside of hiring an in-house bookkeeper is that they are usually costlier than a freelancer or online service, especially when you give them employee benefits, equipment, and office space.
Freelance Bookkeepers
The U.S. Bureau of Labor Statistics states that the average hourly pay for bookkeepers is $22.81 per hour. With freelance bookkeepers, how much it will cost you in a month depends on the number of hours you need their services, as well as their experience, location, and the complexity of the work.
The most prominent benefit of freelance bookkeepers is that they offer flexibility. You can hire them as needed for specific tasks, which is helpful if you do not need full-time bookkeeping. This allows you to keep expenses down and pay only for the services you use.
There are a few trade-offs, though. Freelance bookkeepers often manage multiple clients, so they might not be as readily available as an in-house option. You also lose some direct oversight, which can be a challenge if you need immediate support.
Online Bookkeeping Subscriptions
The monthly fee for an online bookkeeping subscription can vary depending on the service you use. QuickBooks is one of the most widely used online bookkeeping platforms. It charges anywhere between $300 and $700, which is determined by your business’s average monthly expenses over the past three months.
Online bookkeeping services offer the convenience of 24/7 access to your financial data without the overhead costs of hiring a full-time bookkeeper. These services are perfect for business owners who need help but want to keep things simple and affordable.
The Bottom Line
Now that your question is answered, it is time for you to decide whether to hire a bookkeeper and whether it is the best route for your business. Contact Jarrar & Associates CPAs when you need the services of a competent bookkeeper in Santa Monica.
Also Read: Is the Employee Retention Credit Taxable Income?
FAQs
Is hiring a bookkeeper worth it for a very small business or solo entrepreneur?
Yes, even solo entrepreneurs can benefit from a bookkeeper. It frees up your time, keeps your finances organized, and helps you avoid mistakes that could cost you more later.
Can a bookkeeper help with tax filing or is that just for accountants?
Bookkeepers typically organize your financials for tax time but don’t usually file your taxes. They prep everything for your accountant, making the filing process smoother and less stressful.
How do I know if I need basic or full-service bookkeeping?
If you just need help tracking expenses and payroll, basic bookkeeping is enough. But if you want detailed financial insights or reports, go with full-service bookkeeping instead.
Do online bookkeeping services include human support or are they just software-based?
Most online bookkeeping services offer both—automated tools and access to real humans. Plans with live support usually cost more, but they’re helpful if you need real-time help.
How often should I review my bookkeeping if I’m doing it myself?
You should review your records at least once a week. That way, nothing slips through the cracks, and you can catch errors early before they become bigger problems.
