Bookkeeping rates are governed by numerous factors,
and they often fluctuate considerably. If you run a small business and operate on a tight budget you will want to get the best value for your money. Having an understanding of the factors that influence bookkeeping rates will help you to obtain the services you need at a reasonable expense.
Bookkeeping Rates: Determining Factors
Whether you are paying your bookkeeper on an hourly or monthly basis, your bookkeeping expenses will be affected by several factors. The largest factor will involve the number of transactions your business is engaged in each month. For example, the number of customer invoices that are processed, the number of bills that need to be paid, the number and type of employees you have, and the complexity of your inventory control system.
Type Of Services Rendered
The cost of your bookkeeping services will be dependent upon the services that you require. For instance, if you need to reconcile bank statements, they will generally charge you more. Other services they will charge you for include balance sheet submission, profit and loss statements, cash flow statements, employee payroll and benefits, and inventory control. In addition, the size and complexity of your business must be taken into consideration. Clearly, some businesses are much more complex than others, and require a bookkeeper with much greater expertise than a relatively simple business.
Location, Experience and Expertise
Clearly, the location of your business can have an impact on your bookkeeping costs. If you are located in an expensive urban setting like Sydney or Melbourne, you can expect to pay higher rates, due to the high cost of living in these areas. However, if your bookkeeper does not need to be physically present at your place of business, and you can communicate with him or her electronically, these higher costs can be avoided.
Certainly a bookkeeper with several years of experience will charge more than someone who is relatively new to the field. In addition, some bookkeepers have the expertise to handle large and more complex businesses than others. You really need to have a good handle on the complexity of your business operations to determine if you need someone with additional expertise. If you need someone with this expertise, you will have to pay for it, but this may not be necessary if your business is not overly complex. In some instances where your business operations are very complex, you may need a bookkeeper who will work in conjunction with an accounting firm.
Type of Bookkeeper Employed
If you employ an in-house bookkeeper it may end up being quite costly for you, because in addition to their salary, you will likely have to provide them benefits such as insurance, paid vacation, and additional benefits. You will also have to provide them with office space and the computing resources they need to do their job.
The rates charged by freelance bookkeepers can range for $15 to $100/hour depending upon the level of expertise that is required for your business.
However, you do have an additional option. You can outsource your bookkeeping to a bookkeeping firm. This is likely to reduce your bookkeeping expense considerably, and alleviate the need for you to provide them with in-house office space and computing resources. The rates charged would still be driven by the complexity of your business and the number and types of transactions that need to be processed.
There are several pros and cons that are associated with hiring each type of bookkeeper. A highly skilled in-house bookkeeper is likely to be the most costly, but they will be available to confer with you personally during all business hours. Freelancers can be less expensive, but they will likely be performing work for several clients simultaneously, and you will not have personal access to them at all times. In addition, they may not be able to perform all the work you need done according to your time schedule.
Outsourcing your bookkeeping to a bookkeeping firm has several advantages. First of all, you will be dealing with an entire team of bookkeepers that have expertise in various areas of the field. They will have all of the computing equipment and software needed to perform your work, along with the expertise and knowledge to utilize this equipment. Furthermore, if one bookkeeper falls ill, or goes on vacation, there will be others in the firm to do your work, so that your business will not suffer. If you hire an in-house bookkeeper or freelancer that becomes ill, it may disrupt your business.
Obtaining a, suitable bookkeeper with the experience and expertise you require and at a reasonable expense is not a simple endeavor. It requires a considerable amount of research and an in depth assessment of the types of services you require, and their complexity.
In order to minimize your risk, and obtain thebookkeeping servicesthat your require, it is a good idea to outsource your bookkeeping to an experienced and professional bookkeeping firm. You are likely to reduce your bookkeeping expenses with a bookkeeping firm. In addition, you will have access to a team of experienced bookkeepers and you will not have a disruption of service if one bookkeeper falls ill, or goes on vacation, and if your need for bookkeeping services increases with the growth of your business, a bookkeeping firm can easily handle the additional workload.