Bookkeeping rates are based on a variety of factors, and can sometimes vary to extremes. When it comes to a small business getting the most for its money, it is important to understand what bookkeeping rates are based upon, and how to find the lowest rates for the best work.
What Are Bookkeeping Rates Based Upon?
Whether your bookkeeper charges a flat monthly fee or an hourly rate, the bookkeeping costs for your small business will depend on a number of issues. The first of these things is the nature of transactions completed by the business; this includes the amount of bills received and paid monthly and the number of invoices submitted to customers each month. Bookkeepers tend to charge higher rates if a business needs its bank account reconciled, although this usually only takes about an hour for a small business. If a bookkeeper is expected to compose a Profit and Loss Statement, Balance Sheet, and Statement of Cash flow, which one usually is, that can raise bookkeeping expenses for your business, but not usually by much.
The rate that a bookkeeper will command also has to do with experience, and location. A bookkeeper will usually try not to charge more than the competition in the area does; however, bookkeepers with years of expertise tend to use that to their advantage and charge a larger rate than a novice would. However, you get what you pay for, and sometimes it is worth paying higher bookkeeping costs to make sure that the work being done is accurate, and that the service is of high quality.
Bookkeeping Rates Also Depend Upon the Type of Bookkeeper Employed
An in-house bookkeeper for a small business can often cost more money, because a salary is not the only thing that must be paid to this employee. A small business owner must also consider the costs of insurance, paid vacation and sick days, and a retirement fund that would go along with hiring an in-house bookkeeper. A freelance bookkeeper’s bookkeeping rates can range from as low as $15 an hour to as high as $100, depending on the factors previously listed in this article. Meanwhile, if a business owner decides to hire an outsourcing bookkeeper, costs may be reduced, but rates will still strongly be determined by the size of the business and workload being assigned to the outsourcing bookkeeper.
Different pros and cons go along with each type of bookkeeper. An in-house bookkeeper may cost more, and take up space within the business, but be more skilled than a freelance bookkeeper may be. Meanwhile, the freelance bookkeeper may cost the least, but use an outdated bookkeeping system, or be non-confidential. An outsourcing bookkeeper may end up costing a little more than the freelance bookkeeper would, but offer unparalleled benefits such as 24/7 online instant access to records.
The Bottom Line
Getting the best Bookkeeping Rate is not always a quick task. It takes in depth consideration of the size of your business, amount of bookkeeping work that needs to be completed each month, and the quality of bookkeeping work necessary to run the business effectively. Different types of bookkeepers will offer different bookkeeping rates, and the only way to decide which type of bookkeeper will be most cost effective for your business is to do some thorough research and consideration. It is important for a small business owner to take his/her time with this, because it can mean the difference between spending more than necessary, and enjoying quality work with huge savings.
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