The Cost of Outsourcing Bookkeeping for Small Businesses

Owning a business means that you wear many hats, which can be a daunting prospect. In fact, 60% of small business owners aren’t confident in finance and accounting. These functions are essential parts of a business, and it’s vital business owners have this expertise to manage a company properly. Fortunately, there are solutions that companies can turn to, like using in-house bookkeeping or outsourcing their bookkeeping functions. 

Once you start talking about using services, you may start seeing dollar signs and be worried about how much this will cost you. Let’s take a look at how much these solutions really cost and how they could potentially pay off for you and your business. 

How Much do Bookkeepers Charge?

Outsourced bookkeeping rates are typically priced by volume or number of transactions, and therefore, pricing needs to be customized to fit your business’ unique needs. In general, most bookkeepers fall within a range of $50-$100 per hour for their services.

How much does it cost to outsource bookkeeping?

Many small business owners turn to an outsourced accounting firm to manage their bookkeeping. Outsourced bookkeeping rates are similar to those that a contract bookkeeper charges, with an average monthly fee that ranges from $250-$2,000, depending on the complexity and transaction volume.

At Milestone, our bookkeeping services are $60 an hour. Our customizable Foundations Package for accounting starts at $250 per month and offers a range of functions, including bookkeeping services, bank/credit card reconciliations, and payroll. You can also outsource invoice processing services with Milestone so we manage all your accounting transactions.

How Much Should I Pay for Bookkeeping Services?

There is no one answer for this question—it depends on the complexity of your business and the number of transactions you process each month. If you are just starting out, you may need someone to record your transactions and handle your minimal accounts receivable and payable, adding up to only a few hours of bookkeeping each month. 

However, if your business has many transactions, you may need a more full-service outsourced accounting solution that includes things like running payroll, collections, processing payments, etc. Your budget for bookkeeping should fall within the general $250-$2,000 per month, but there are outliers in that range due to the many variables. 

What Factors Influencer The Cost Of Bookkeeping?

When it comes to managing the finances of your business, making an informed decision on outsourcing bookkeeping services hinges on understanding the factors that influence the associated costs. These variables play a critical role in determining the final price you pay for these essential services. Here’s a breakdown of the key factors affecting the cost of outsourcing your bookkeeping needs:

Business Size and Complexity

The scale of your operations significantly impacts your bookkeeping requirements. A small, single-service company will have fewer transactions and simpler financials compared to a larger, multi-faceted business. This complexity affects the amount of time and expertise needed to manage your accounts, directly influencing cost.

Volume of Transactions

A direct driver of bookkeeping costs is the number of transactions that need to be recorded, tracked, and reconciled. More transactions mean more bookkeeping hours, increasing the cost. This includes sales, purchases, expenses, and any other financial movements within your business.

Level of Expertise Required

Not all bookkeeping needs are created equal. Some businesses require a bookkeeper with expertise in specific industries or familiarity with certain financial regulations and tax laws. The higher the expertise required, the higher the cost, as you’re paying for specialized knowledge.

Use of Software and Tools

The type of bookkeeping software and other financial management tools your business uses can also affect cost. If a bookkeeper needs to purchase or subscribe to specific software to accommodate your business, this cost may be passed on to you. Moreover, if they need to spend time learning a unique system, this could also increase costs.

Services Included

The scope of services required will also dictate the cost. Basic bookkeeping might include recording transactions and financial statement preparation, but additional services like payroll processing, tax preparation, and financial analysis require more time and expertise, thus affecting the pricing.

Frequency of Services

How often you need bookkeeping services—whether it’s weekly, monthly, or quarterly—can also impact costs. More frequent bookkeeping not only ensures your financials are up-to-date but may also lead to a higher overall cost due to the increased hours of work involved.

Customization and Additional Requests

Custom reports, specific financial analysis, or other unique requests outside of standard bookkeeping practices can add to the cost. Tailored solutions that require additional time and expertise will be factored into the pricing.

By considering these factors, businesses can better understand the costs associated with outsourcing bookkeeping services. It’s not just about finding a cost-effective solution but ensuring that the service you choose aligns with your business’s unique needs and complexity. As you navigate the decision-making process, remember that investing in professional bookkeeping can free up valuable time, reduce overhead, and provide access to financial expertise, ultimately supporting the growth and success of your business.

What are the Benefits of Outsourcing Bookkeeping? 

Did you know that 40% of business owners said that bookkeeping and taxes are the worst part of owning a business? With this in mind, it’s no wonder that outsourcing bookkeeping has become a popular solution for many businesses. In addition to the major benefit of not having to deal with these administrative tasks any longer, other benefits of outsourcing bookkeeping include being cost-effective and time-efficient. 

Outsourcing your bookkeeping is cost-effective due to the savings on both the rates and the overhead. Without the need to bring internal employees in to fulfill these functions, your costs go down. In addition, think of how many hours you could free up from your schedule—your time as an executive is worth a lot—and delegating bookkeeping functions gives you the ability to dedicate those hours to executive functions instead. 

Remember that statistic about how business owners aren’t confident with accounting? Here’s another major benefit of outsourcing these accounting functions: access to expertise. Bookkeeping has to be correct in order for your accounting to be correct. It makes sense that it would then be managed by people who are accounting professionals.

How Do I Get Started With Outsourcing My Bookkeeping Functions? 

At Milestone, we can help you with all your bookkeeping and accounting needs and provide a customizable and scalable solution that fits you perfectly. Our approach is true collaboration, working side by side with you to help your business be as successful as possible.

Our Foundations accounting package includes: 

• Bookkeeping services
• Vendor invoices
• Credit card transactions
• Bank / credit card reconciliations
• Payroll
• Customer invoices
• Customer payment processing
• Collections

As with all our accounting and HR solutions, this package is fully-customizable, no hassle, and you won’t find yourself locked into a long-term contract. 

With decades of proven experience in accounting and HR, Milestone is standing by to support you and help your business grow. Contact us today to discuss your bookkeeping needs and get started with Milestone.