If you’re a small business owner, you know that your finances are a critical component of keeping your business running smoothly. In fact, keeping accurate and organized financial records can make or break you—especially when tax season comes around. That’s why having a bookkeeper for your business and its day-to-day operations is highly recommended.
Bookkeepers provide crucial services for your business, such as organizing and maintaining financial records, including expenses, accounts payable, and accounts receivable; recording financial transactions; preparing financial statements for accountants; conducting payroll services; and ensuring your business finances are up to date for compliance and tax planning. When a bookkeeper does great work, your accountant will have all the financial information they need to assist your business during tax time, make strategic recommendations to improve your cash flow and perform in-depth financial analysis.
If you’re worried that having both bookkeeping services and a business accountant will be too costly for your small business, we’re here to tell you that having both isn’t just critical for your success, but it’s more accessible and more affordable than you think!
In this article, we’ll cover the factors that influence bookkeeping costs, the cost of having a bookkeeper in Baltimore, and what to consider when looking for a bookkeeper. We’ll also compare different options, such as outsourcing or hiring in-house. Finally, we’ll introduce you to an effective, affordable, all-in-one bookkeeping service that makes small business accounting a breeze and can help you save money.
What Influences Bookkeeping Costs?
As with anything service-based, several factors influence how much they will cost you, and bookkeeping is no different. The three major influences on cost are these:
- Business size
- Transaction volume
- Industry
A larger business will incur more bookkeeping costs. This is largely due to their transaction volume and the number of employees who require items like payroll services, which fall under the bookkeeping umbrella. The bookkeeper will also have to prepare more financial statements and documents to send to the accountant during tax season. More transactions = higher bookkeeping costs.
Industry also plays a role, as some industries require more in-depth organizing and tracking for compliance. This leads to more work for the bookkeeper and may even require a more sophisticated bookkeeping software, ultimately costing a business more. Luckily, a small business will likely have fewer employees and fewer transactions than an enterprise, meaning some of these factors will not influence the cost as much.
Consider Which Bookkeeping and Accounting Services Your Small Business Needs
Bookkeeping can have a broad role and many different facets. Part of the cost of bookkeeping is influenced by which services you require and the level of expertise your bookkeeper of choice possesses. Some bookkeepers may even have tax experience and can take your financial information further when it’s time to file your yearly taxes. If you just need someone to help you keep track of transactions, it will cost less than if you also need help with payroll and creating financial reports.
Unlike being an accountant or certified public accountant, bookkeepers do not need formal education or training. However, many possess bookkeeping certificates and have gone through educational materials to improve their skills. Consider what level of expertise your tasks require, what accounting services your bookkeeper needs to prepare reports for, and hire appropriately.
In-House Bookkeeping vs. Outsourcing Bookkeeping Services
Another aspect that influences the cost of bookkeeping for small business owners is whether or not they choose to outsource their accounting and bookkeeping services needs or keep these roles in-house. Both have their merits.
When you choose to outsource your bookkeeping, it means you have one less role to pay, one less person to organize and train, and one less potential headache when it comes to organizing holidays, etc. Outsourcing erases all those employee pain points that may come up, such as conducting an interview process and finding someone on the same page. It also ensures you’re receiving exceptional service from a finance professional who has been vetted, hired, and further trained by another company. You simply set it and forget it, allowing you to focus on the other demanding aspects of running a small business.
An in-house bookkeeper can also be an excellent choice for a small business. Especially when you’re just starting, you may even be able to do the bookkeeping yourself with the help of basic bookkeeping software. However, as you watch your business grow, it’s a role you should hire for if you choose to keep someone in-house. An in-house bookkeeper can be a great team member, as they’ll know your small business inside and out. They’ll be able to help you reach your financial goals and will follow your reporting preferences. When a company is just starting, an in-house bookkeeper can also help create payroll forms and establish effective business processes that you’ll carry with you as the company grows.
Small business owners will have to decide what works for them. The most crucial part is always to keep organized and up-to-date financial information to provide to an accountant. They’ll need this information during tax time to prepare and file taxes and to help you make other financial decisions.
The Benefits of Outsourcing Your Bookkeeping
Sometimes, outsourcing your bookkeeping can be the most cost-effective choice for your business. As mentioned above, you’ll have access to experienced professionals and sophisticated technology solutions without having to front the bill for software or go through an extensive and expensive hiring and training period. With a professional bookkeeping service, you’ll also be able to scale quickly as your business grows.
Finally, because you’ve taken a significant portion of work off your plate—and have one less department to manage—you have significantly more time in your day to focus on what your business needs to grow.
What To Consider When Hiring a Bookkeeper
If you have decided to hire a bookkeeper, look for these key things:
Qualifications, Experience, and Reputation
Always read reviews or ask for references when hiring. You don’t want to trust just anyone with your business’s finances.
Communication Skills, Technological Proficiency, and Industry Expertise
Most bookkeepers need to understand and be proficient in basic software systems. They should also know the ins and outs of your chosen industry to store the correct information and help ensure regulation compliance—especially when filing taxes.
Ability to Provide Timely and Accurate Financial Reports
Bookkeeping is an important role and can be technical at times. Be sure to assess whether or not your candidate can provide the proper reports within a reasonable timeframe. Those skills will be critical within the role. You’ll also want to test their proficiency in your chosen bookkeeping software, although remember that the right fit for your company can learn some skills during training.
What Does it Cost to Hire a Bookkeeper in Baltimore?
As mentioned, the cost of hiring a bookkeeper depends on a few things, including business size, industry, task complexity, and transaction volume. It also is affected by factors like the bookkeeper’s qualifications and experience. Here’s a quick breakdown for you:
Hourly Wage
You can expect to pay $20 per hour for bare minimum bookkeeping. However, as the complexity and qualifications increase, you may spend upwards of $50 per hour. Bookkeepers with lots of experience, specialized skills, and qualifications may charge more, while entry-level bookkeepers will likely be on the lower end of the spectrum.
Average Monthly Cost
As a small business with very minimal transactions, this can add up to anywhere from $100-$300 per month for basic services. For medium and larger businesses with more complex needs, such as custom reporting, financial forecasting, and tax document preparation, these monthly rates can be anywhere from $300 to several thousand. When it comes to bookkeeping, you often get what you pay for, keeping in mind you’ll also need to hire an accountant or accounting firm for tax preparation and filing.
In-House vs. Outsourced Bookkeeping
As mentioned in the benefits of outsourcing section, there are a few factors to consider regarding the overall cost of hiring in-house or outsourcing. They are:
Salary and Benefits
When you hire in-house, you don’t just pay for their salary. You also have to consider the cost of added benefits, payroll taxes, overhead expenses such as office space and equipment, and, of course, the cost of hiring and training.
Training and Supervision
When you hire in-house, you also have another department to care for. This may require extra expenses in initial training costs and ongoing supervising.
Scalability
When you outsource, you have easier access to resources for scaling your services as needed. This is much more flexible than the commitment of hiring a full-time employee.
Expertise and Efficiency
Rather than saving money by hiring an entry-level bookkeeper, an outsourced bookkeeping service will have an able team of professional bookkeepers with diverse expertise. They will use their skills to provide more efficient and accurate financial management and reports than a single in-house employee. You’ll end up paying for less time in the end.
Technology and Software Costs
Let’s face it: many small businesses rely on basic systems like Excel for their accounting services and financial statements. This won’t give you everything you need for in-depth, sophisticated financial analysis! You’ll likely gain access to advanced accounting software when you outsource, meaning you don’t have to invest in expensive software licenses yourself.
Outsourcing might seem to cost more upfront, especially for a small business. However, when you consider the benefits of not having to pay an ongoing salary, access to expertise, easy scalability, and more sophisticated accounting software, plus more efficient processes, outsourcing your bookkeeping can often be a cost-effective solution in the long run. If you’re just starting your business, chances are you need to focus on your core operations to grow. When trying to manage accounting and bookkeeping internally, you quickly become bogged down by accounting tasks and spend less time on your priorities.
Precise Ledger LLC: Affordable and Professional Bookkeeping Services in Baltimore
If you’re considering outsourcing your bookkeeping, check out Precise Ledger LLC. We’re a leading provider of bookkeeping services in Baltimore. Our competitive pricing starts at just $140 per month for small businesses. We provide access to customized solutions, experienced professionals, and exceptional customer service. With Precise Ledger LLC, we handle all things bookkeeping and accounting with our leading accounting software. All you have to do is start, and we’ll take care of the rest. Afraid your financials are a mess? Don’t worry. We can untangle even the most disorganized or complicated systems to get you back on track for success.
As a small business owner in Baltimore, you understand the importance of accurate and organized financial records. However, the cost of hiring a bookkeeper can be a significant concern. At Precise Ledger LLC, we believe that every business deserves access to professional, affordable bookkeeping services. With our monthly packages starting at just $140, you can enjoy the benefits of working with experienced bookkeepers without breaking the bank. Our team will handle all your bookkeeping needs, from transaction recording and reconciliation to financial reporting and analysis, allowing you to focus on growing your business. Don’t let the cost of bookkeeping hold you back – contact Precise Ledger LLC today to schedule a consultation and discover how our services can help you achieve financial clarity and success.
