As a new business owner, you’ll soon find that your business needs the services of a few experts such as a Denver CPA. While you may want to handle everything yourself to save money, some things are just better off outsourced. Bookkeeping is one of those. Bookkeeping is one of the basic requirements for a business that wishes to grow and thrive. Being a complex service, you are better off outsourcing to experts who can help you save time while you focus on other important aspects of the business. By understanding your options and the cost of this service, you can easily weigh the pros and cons and decide on which one works best for you.
Bookkeeping vs. Accounting
As a business owner, you’ll soon learn that these two terms do not mean the same thing. Every small business needs bookkeeping services to stay on top of its financial information. Bookkeeping services help you stay on top of those small responsibilities, bills, and sales that your business is faced with. Over time, and as your business grows financially, you may then choose to hire an accountant.
Accountants deal mostly with detailed financial reporting with state and federal regulations in perspective. For established businesses, you will need an accountant to look over your financial records, prepare taxes, and offer financial insights.
One of the great things about bookkeeping and accounting services is that you may not need to change your service providers. Most businesses that offer bookkeeping services also offer accounting and tax solutions. They can even advise you when it is right to hire an accountant for your business needs. Now that you understand why your small business needs a bookkeeper and not an accountant, you should also know what a bookkeeper does or their services.
What Do Bookkeepers Do?
Small businesses need bookkeepers for a lot of reasons. Their responsibilities are woven such that they maintain the small business’ financial books while also keeping track of their income and expenditure. Bookkeepers ensure that all sales or spending are tracked accurately and entered into specific accounting software like QuickBooks.
In summary, bookkeepers are saddled with the responsibility of staying on top of every financial decision and transaction made by small businesses. They collect the information and use it to produce financial reports that give the business owner an insight into the business’ wellbeing.
Some of the tasks of a bookkeeper include;
- Bill payment
- Data entry
- Inventory management
- Facilitation or collection of past due payments
- Preparation or organization of key financial documents
- Maintenance of accounts payable and accounts receivable (vendor & client lists)
- Financial reconciliations
Now that you understand what a bookkeeper does and how they contribute to your small business, you should also know what they charge. To better understand the cost of bookkeeping services, we compare the cost of an in-house bookkeeper and outsourcing the service.
Bookkeeping Services Cost vs. The Cost of Outsourcing
Many newly launched businesses choose to save costs by handling their bookkeeping needs in-house. In-house bookkeeping services, in this case, means that they handle things themselves. Although this may appear to be a cost-effective solution, sooner or later, business owners find that it is harder to keep track of income and spending. They eventually have to choose between two options, to hire a bookkeeper or outsource.
The right decision between these two options depends on a range of factors. However, the cost of the bookkeeping services depends on factors like;
- The bookkeeper’s experience level
- Service type. Whether the bookkeeper has been hired as a part-time employee, full-time employee, or the task has been outsourced to a bookkeeping and accounting service provider.
- The amount of work to be done each week
- The expected responsibilities of the bookkeeper
Small businesses that can’t afford a full-time bookkeeper may hire a part-time employee to handle the job. This can help them to save costs while also getting their bookkeeping needs sorted.
Cost of hiring a part-time bookkeeper
Part-time bookkeepers often work about 20hrs a week or less, depending on the small business needs. A bookkeeper may charge $20/hr or more depending on the tasks involved and the job location. Bookkeepers who have to travel a distance or have a large workload may charge higher to do their job. If you are looking to save costs, you can hire a part-time bookkeeper to help you with the workload.
Cost of hiring a full-time bookkeeper
If your small business has grown to the point where it now has more transactions to handle, it is best to consider a full-time bookkeeper. Full-time bookkeepers work about 40 hours a week or more. In most cases, bookkeepers charge around $35,000 and $55,000 annually for a full-time role managing your small business accounts. In some locations with a high cost of living, you may need to pay the industry average of about $70,000 to secure the services of a full-time bookkeeper. In addition to the salaries, you’ll also need to provide about 20% extra in bonuses and benefits to the employee. With a full-time bookkeeper on duty, you can rest assured that your day-to-day transactions will be handled appropriately.
Cost of outsourcing your bookkeeping needs
Outsourcing your bookkeeping needs comes with many perks. For most small businesses, outsourcing is the intersection of cost-effectiveness and service. This service may cost between $500 and $2,500 a month, depending on the volume of transactions your small business handles. With outsourced bookkeeping, you don’t need to worry about creating an office for your part-time or full-time bookkeeper. You can also save money on employee benefits as with full-time workers.
Another advantage of outsourcing is that bookkeeping service providers have enough hands to handle your growing books. This means that you no longer need to worry about hiring extra hands to do the job or employee satisfaction.
You should crunch your business numbers before deciding which option is best for you. If you are unable to make a decision, it’s best to outsource. You can get information on bookkeeping services and outsourcing your bookkeeping needs at https://etacpa.com/denver-cpa/
Elite Tax & Accounting, LLC
4600 S Syracuse St., Suite #650 Denver Colorado 80237,