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How Much Do Bookkeepers Charge for Start-Up Businesses?

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How Much Do Bookkeepers Charge For Start-Up Businesses

Over the past five years, the number of firms in the Payroll & Bookkeeping Services industry has increased by an average of 1.5% each year.

The States with the highest concentration of Payroll & Bookkeeping Services businesses in the US are California (33,540 businesses), Florida (28,718 businesses), and Texas (26,249).

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To help you maintain your company’s financial records, it is imperative to engage a bookkeeper. Whether you’re an aspiring bookkeeper or want to hire bookkeepers, you must be informed of the service charge.

However, this raises the question…” how much do bookkeepers charge for their services?

There’s no one-size-fits-all solution to prices attached to bookkeeping services because there are several factors to consider. Nevertheless, I will share insights into the conflicting information about costs and determining factors.

Key Highlights

🎯 As of 2022, there are about 986,847 bookkeepers in the US

🎯 Women make up 84.6% of all bookkeepers, while men make up 15.4%

🎯 The typical annual compensation for a full-time bookkeeper is currently between $35,000 and $55,000, and the average cost to outsource your bookkeeping requirements is between $500 and $2,500 per month.

🎯 When you’re ready, full-service accounting can be added by outsourced bookkeeping services to assist you in scaling if your business is expanding.

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🎯 There are various bookkeeping services available today, from project-only outsourcing to hourly rates and fixed monthly service prices.

SEE ALSO: How Accountants Can Start a Bookkeeping Side Hustle from Home

SEE ALSO: How a Certified Public Accountant Can Run a Successful Bookkeeping Business

SEE ALSO: 12 Lucrative Side Hustle Ideas Accountants Can Do At Spare Time

How Much Do Bookkeepers Charge?

Business owners are now looking for outsourced accounting services to create financial statements, control bank account activities, analyze financial data, and generate bills for clients. This option seems preferred, direct, and most times affordable.

Recently, accountants are getting creative with their skills by running a bookkeeping side hustle and it is paying off because a lot of smaller businesses and startups cannot afford a full-time accountant on their payroll.

However, as your business grows, the need for a bookkeeper arises. At this time, you’ll need to choose which bookkeeping option would suit your startup business without breaking the bank.

There are three bookkeeping options that startup businesses can employ to handle their financial and organizational needs.

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1. Full-time bookkeeping ($35,000 to $55,000p.a)

A full-time bookkeeper handles your company’s day-to-day accounting operations. However, depending on where you live, the typical annual charge for a full-time bookkeeper ranges from $35,000 to $55,000p.a, with benefits and overhead.

Additionally, bookkeepers’ incomes are edging closer to $70,000 in locations with a high cost of living, such as New York or L.A.

A full-time bookkeeper can handle tasks like processing monthly financial statements, billing customers, managing timesheets and payroll, and paying bills.

However, you might still need to review the final products as the business owner to ensure correctness.

2. Part-Time Bookkeeping ($15 to $20 per hour)

Similar to full-time bookkeepers, a part-time bookkeeper’s pay differs and ranges from $15 to $20 per hour, depending on the position and location.

In the United States, a part-time bookkeeper earns $39,000 annually or $20 / hr. The starting salary for entry-level bookkeeping jobs is $33,540 a year, while the average yearly salary for experienced workers is $53,625.

A part-time bookkeeper might be a suitable fit for your business if you need a little extra assistance to handle your work and some of the accounting each month.

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They can perform tasks including entering receipts and monitoring employee timesheets, accounts payable, and accounts receivable.

Management still needs someone to check the bookkeeper’s work when hiring a part-time employee.

3. Bookkeeping Outsourcing ($500 to $2500p.a)

For small organizations and startups, outsourced bookkeeping offers an accounting department’s complete range of services.

You will need to determine which aspects of your financial management, including the bookkeeping function, makes sense to outsource (just as you would hire an internal bookkeeper and outline their position).

Depending on the volume of transactions and the complexity of the services needed, the average monthly cost to outsource your bookkeeping needs is between $500 and $2,500.

One of the 7 main benefits of outsourcing is that you may tailor the services you get to your specific bookkeeping requirements.

Full-time Bookkeeping Salary Break down by State

StateMean Salary p.aMean Salary Per Hour
New Hampshire$40,170$20.27
New Jersey$46,860$22.53
New Mexico$47,600$18.08
New York$45,590$21.92
North Carolina$39,590$19.03
North Dakota$38,220$18.38
Rhode Island$44,120$21.21
South Carolina$36,860$17.72
South Dakota$33,970$16.33
West Virginia$34,550$16.61

Factors That Influence Bookkeepers’ Charge

As previously stated, there’s no one-size-fits-all solution to charges because of the following influencing factors:

1. Level of Education  

Your educational background is important to keep in mind because customers will be more confident and willing to spend more if you have a degree. To be a bookkeeper, you don’t need a bachelor’s degree.

Although an associate degree from a nearby community college is ideal, several institutions also provide bookkeeping certifications that you can obtain faster.

2. Certifications for Bookkeepers

The American Institute of Professional Bookkeepers (AIPB), National Association of Certified Public Bookkeepers (NACPB), and QuickBooks ProAdvisor certificates are three must-have bookkeeping credentials that upsell a bookkeeper.

Thousands of bookkeepers have completed numerous programs, thereby increasing their potential earnings.

3. Location

For instance, the average hourly rate for bookkeepers in New Mexico is $18.08, while Washington has $21.92. The average pay for bookkeepers varies in each state.

4. The Kind of Bookkeeping Services Offered

In general, bookkeeping services involve reconciling bank and credit card accounts, creating monthly financial reports, and handling all facets of accounts payable and receivable.

If you are skilled enough, you could raise your billable rate by providing payroll services in addition to bookkeeping.

5. Experience as a Bookkeeper

Even if having a degree or a bookkeeping certification will help you to find a job, having actual work experience is just as important.

Your confidence in your abilities will increase as you gain more experience performing actual bookkeeping work, resulting in greater billable rates.

Final Thoughts

Your choice of how much to charge your clients or pay a bookkeeper depends on several criteria. You’ll know more about what to anticipate in terms of an hourly rate once you assess the typical compensation rate for your area, level of education, and certifications.

Along with the types of bookkeeping services, proficiency with accounting software and professional experience are also important.