New businesses are always concerned about money. All the bills need to be paid, payroll has to be timely and accurate, it takes work to keep up with all the taxes, and the books always need to balance out.
As your business grows, you face even greater bookkeeping needs. Filing taxes when you are self-employed is not too tricky but with employees it’s going to get more complex. Now you need to worry about getting financial reports that are up-to-the-minute accurate so you can make quick, data-driven decisions.
Every business will eventually see the need for advanced bookkeeping services, but the costs of hiring a bookkeeper can be prohibitive. Read on to learn if it’s the right choice for your business.
Hiring a full-time bookkeeper
Hiring a full-time bookkeeper will entail all the same expenses as hiring any other employee. You’ll need to pay salary, taxes, and certain benefits. Full-time, in-house bookkeepers in the United States make salaries anywhere from $28,000 to $65,000 per year.
Add to this the need to provide a working space, IT infrastructure/support, and phone lines or plans, and the cost of a full-time hire can be too much for many small and even medium-sized businesses. Hiring full-time is usually only cost effective if you have a full-time amount of bookkeeping work to get done: at least 35 hours’ worth per week.
Hiring a freelance bookkeeper
Freelance bookkeepers are available all over the internet, and the type of services you need, as well as the hours you have to offer, will determine the final costs. For very basic bookkeeping services, most part-time bookkeepers will charge between $20 and $50 an hour, depending on location.
For more senior bookkeeping that requires accounting skills, you can expect to pay between $40 and $75 per hour. To hire a bookkeeper who is also a certified public accountant to do advanced bookkeeping, you should expect to pay upwards of $100 an hour.
The costs of hiring a freelancer bookkeeper can quickly become prohibitive. Additionally, you need a way to ensure that someone with access to your financials and private business records is trustworthy. Often times, that means either hiring through a company with vetted employees (an added expense) or finding someone to supervise a part-time hire.
Online bookkeeping services
Online bookkeeping services are by far the most financially feasible option for small businesses. Depending on the type of services you need, there are plans available for only a few hundred dollars a month. These plans include phone and email support, and all your bookkeeping is done, and available, online.
With Fully Accountable ecommerce accounting services, you can change plans at any time as your business expands or you have a temporary need for more advanced services. The scalability of using online bookkeeping can be valuable to a small business.
Figuring total costs
According to recent surveys, 72 percent of small businesses are spending $10,000 or less each year on bookkeeping and accounting. Only 16 percent spend more than $20,000 a year. These costs are relatively low, and for most small businesses, it doesn’t make sense to hire a full-time bookkeeper.
54 percent of small business owners are spending at least three hours a month doing their own payroll, with 11 percent spending more than 10 hours. 40 percent are spending more than 80 hours a year just doing taxes alone.
The numbers add up quickly, and if you’re paying freelance bookkeepers, a best-case scenario is $250 a month just to do the most basic tasks for a very small company.
For most small businesses, online bookkeeping services offer the best value and balance between cost and expertise. When you have only a few hours before a deadline, you choose an economical plan.
When needs spike, upgrading is easy. Online bookkeeping is going to be the smart choice for most smaller companies.
