How much do bookkeepers charge for startups?
For small business owners, keeping track of assets, liabilities, income, expenses, and taxes can be challenging. For this reason, business owners employ bookkeepers or contract out bookkeeping work. But how much do bookkeepers charge for startups?
Bookkeeper rates can vary depending on several variables, including location, business intricacy, the volume of transactions, and the exact services required. It also varies greatly depending on the bookkeeper’s qualifications and experience level, as well as the complexity of the requirements. Let’s see the difference between basic bookkeeping and full-service bookkeeping, what the bookkeeper does for your startup and their costs.
Basic Bookkeeping vs. Full-Service Bookkeeping
Basic bookkeeping typically includes essential financial tasks to maintain accurate records of business transactions. It includes,
- Keeping track of income, expenses, assets, liabilities, and equity.
- Capturing and categorizing transactions such as sales, expenses, and payments.
- Generating basic financial statements, that is, income statements and balance sheets.
- Matching bank statements with recorded transactions to ensure accuracy.
- Assisting with organizing financial information for tax purposes.
Full-service bookkeeping provides a wide range of support which goes beyond the basics. It includes,
- Tracking and managing payments, collections, and invoicing.
- Monitoring inventory valuation, cost of goods sold, and inventory levels.
- Calculating and managing employee wages, tax withholdings, and payroll tax filings.
- Providing information on the budgeting, cash flow management and financial health of the company.
- Assisting with tax filings, including annual tax returns, payroll taxes and sales tax.
- Generating detailed financial reports, customized to the business’s needs.
What Does a Bookkeeper Do for Your Startup?
Bookkeeping provides startups with a solid foundation for financial management, decision-making, compliance, and growth. It improves transparency and helps in identifying financial strengths and weaknesses. Startups can preserve a clean, systematic record of their financial activities by using bookkeeping.
Your startup’s bookkeepers keep track of all of its financial activities, including sales, purchases, expenses, and payments. They track invoices, payments, and collections to make sure that bills are paid on time. They also reconcile bank statements with the transactions that were recorded. Additionally, they process payroll, compute wages, withholding taxes and deductions, and file payroll tax returns.
The general ledger, financial reports including income statements (profit and loss statements), and balance sheets are all maintained by bookkeepers. Bookkeepers can help with budgeting, cash flow management, and discovering trends or potential areas for financial improvement in your startup.
1. Hourly Bookkeeping Cost for Startups
A part-time bookkeeper might be a suitable fit for your business if you can handle your work and some of the accounting each month but could use a little extra assistance.
A part-time bookkeeper may vary greatly in price. Part-time pay ranges from $15 to $20 per hour, depending on the position and location.
2. Full-time Bookkeeping Cost for Startups
A full-time bookkeeper handles the day-to-day accounting functions for your office. In this case, hiring a full-time bookkeeper can be the best course option for you.
Depending on where you live, the typical full-charge bookkeeper’s annual income ranges from $35,000 to $55,000 plus benefits and overhead.
3. Outsourcing Bookkeeping Cost for Startups
The major advantage of outsourcing is to customize the services you receive to your bookkeeping needs. Consider shifting to complete accrual-based accounting if your company is entering a growth phase.
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.
For startups, outsourcing bookkeeping makes sense because it has several advantages that help them succeed. Startups may find that outsourcing bookkeeping is less expensive than hiring an internal bookkeeper. Employer costs including pay, benefits, training, and office space are all eliminated by outsourcing. It helps free up valuable time, allowing business owners to concentrate on key operations.
One Accounting is a leading provider of bookkeeping services in Toronto.
For a free consultation, get in touch with One Accounting!