For many small and medium sized businesses, the challenge of managing finances is one of the hardest aspects of running an operation. Bookkeeping – how businesses apply their documentation procedures to record financial transactions – is a necessary evil that is not thought of until tax return time or cash-flow is an issue.
Professional bookkeepers can alleviate some of the stress regarding tax time, regulation and law compliance, and a clear strategic direction as a business owner. But many owners are often left with the question – How much should I hope to pay?
This blog explores the different details of pricing when it comes to bookkeeping, the types of services offered, and what value for money might mean in all of this.
Value of Professional Bookkeeping
Before discussing costs, it may be worthwhile to examine what bookkeeping can do for you. Knowing you have organized financial records can:
1. Allow you to see where your income and expenses are going;
2. Ensure compliance with local taxes;
3. Identify profit erosion or inefficient processes;
4. Prepare you if you are audited; and
5. Support better, data-driven decision-making.
Good bookkeeping is the operationally beneficial glue in your business’s financial health, whether you are just starting out in business or if you are established.
Factors That Might Influence the Cost of Your Bookkeeping
Bookkeeping is not a one-size-fits-all service. Price can vary significantly depending on a few factors. Here are the things that may impact your bookkeeping bill:
1. Size and Complexity of Business
Typically, larger businesses have more transactions, multiple streams of income, and complex reporting needs. More transactions means more work, which results in higher cost.
2. Frequency of Service
Some businesses only want reports on a monthly basis, while others may want reports weekly, or even daily. The more often you engage bookkeeping services, the more it will cost you.
3. Software and Technology
Cloud-based solutions such as Xero, MYOB, and QuickBooks can minimize the amount of manual work completed so may lower costs for you. That said, some bookkeepers may charge a higher fee for implementing or managing multiple software programs used in their service delivery.
4. Payroll Processing
If a bookkeeper is managing payroll (i.e. calculating your employee wages and tax, superannuation) this will have a cost as well. Payroll can become complicated when the number of employees increases, or you hire staff with more complicated work types and arrangements (contractors, casuals, full-time employees).
5. Additional Services
Some bookkeepers offer additional services, such as Preparation of Business Activity Statements (BAS), managing budgets, liaising with accountants. These types of additional services are likely to attract additional costs as well.
Common Bookkeeping Pricing Models
Most bookkeepers charge using one of these pricing models:
Hourly Rate
This is the model that is most common for freelance bookkeepers, or on an ad-hoc basis support. The hourly rate can range per hour depending on the experience of the bookkeepers, certifications held and the location.
Fixed Monthly Fee
Many modern bookkeeping services pricing are now using Packages based pricing models. Because there is quite a range here, rates will be dependent on how many hours of service you need, and the level of complexity that may be required to deliver the service. Fixed pricing can help with budget, renewing certainty for business owners.
Project Pricing
Some businesses may only need help with bookkeeping on a project basis (like cleaning up the books before tax time). Typically these project prices are quoted based on both scope and urgency.
In-House or Outsourced Bookkeeping – Which is More Cost-Effective?
In-House Bookkeeping:
Having a bookkeeper full-time will provide direct access/control, but this comes with the additional costs of:
- Salary
- Superannuation and leave
- Office space/equipment
- Training and software licenses
Outsourced Bookkeeping:
This solution gives the advantage of flexibility and is often a cheaper option. You are only charged for what you use, and there is no associated cost for a full-time staff member.
Outsourcing bookkeeping is a very useful option for:
- Startups and small business entities
- Businesses that operate on a seasonal basis
- Businesses that do not have an internal bookkeeping/ accounting knowledge
What is Included in Bookkeeping Services?
When determining which bookkeeping service suits your needs, it is a very good idea to consider what services are actually provided. A standard package of bookkeeping services may typically include:
- Bank and credit card reconciliations
- Accounts receivable and payable
- Payroll
- BAS/IAS lodgements
- Financial Reports (profit & loss, balance sheet and cash-flow)
- Tax (GST) compliance and ATO compliance
Always confirm with your provider what exactly is included in the package and what is regarded as an “add-on”.
Cost Comparison – Don’t Put Cost Above Quality
Sometimes cheaper doesn’t mean better, particularly regarding finances. An under-qualified bookkeeper can create errors that can cost you in lost business opportunities or tax overpayment or penalties.
Instead of trying to get it at the cheapest quote, ask yourself:
- Are they certified (Xero or MYOB partner)?
- Do they understand you and your industry’s compliance requirements?
- Will they grow with your business?
- Do they provide regular reporting and proactive advice?
Accounting integrity and reliability are just as important as price.
The Value of Business Intelligence and Compliance
Many business owners undervalue bookkeeping’ strategic contribution. It’s not just about reconciling transactions an experienced bookkeeper assists with:
- Identifying unnecessary costs
- Bringing overdue invoices to your attention
- Keeping positive cash flow
- Forecasting accuracy
- Preparing financials for funding or grants
In this later example, the bookkeeping rates you pay are not just expenses, think of them as an investment in business intelligence and compliance.
When Should You Reassess Bookkeeping Costs?
It is smart to evaluate your bookkeeping setup at least once a year, or when:
- Your number of transactions drastically increases
- You expand into new markets or open new locations
- Taking on new tax or payroll responsibilities
- You feel that your bookkeeper is not keeping pace and not proactive
A better set of services can save you valuable time and allow better transparency to plan for growth.
Conclusion
Knowing which factors drive bookkeeping prices can help you make confident choices about hiring. Whether you are just starting or are managing a more complex operation, do not forget that great bookkeeping is more than just a line item on a budget it is the groundwork for a healthy, scalable business operation.
If you are considering options, make sure that your bookkeeper will get to know your business, has desirable tech integrations and communicates openly with you. It is not about finding a service, it is about building a partnership.
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