- May 1, 2021
- Posted by: Simply Finance
- Category: Accounting
The costs of bookkeeping services for a small company or nonprofit can be determined by a number of factors. Number of monthly transactions, number of employees and how payroll is processed, number of spending accounts, credit cards, invoices to send out, bills to pay, number of balance sheets to reconcile, and so on are all factors to consider. Your expenses can be influenced by how your accounting systems, policies and practices, and reporting requirements are set up and administered, in addition to these simple bookkeeping tasks.
Full-Service Accounting vs. Basic Bookkeeping Services
Many small companies in their early stages are preoccupied with enforcement, which includes paying bills, receiving payments, tracking transactions, maintaining payroll consistency, and adhering to state and federal regulations. At some point, the company will reach a tipping point, and you’ll start to emphasize the importance of timely, reliable financial reports and intelligence. To make data-driven decisions, you’ll need more sophisticated bookkeeping, accrual-based accounting, and management or administrative accounting.
So think about whether you only need enforcement – simple bookkeeping – or whether you’re ready to move up to full-service accounting, which can help you increase revenues, boost cash flow, and expand your company. They necessitate very different levels of effort and experience, and as you would expect, full service accounting is far more expensive. Most companies who make the move, on the other hand, quickly recognize the benefit and see a return on their investment.
What is the Role of a Bookkeeper in a Small Business?
Bookkeepers are in charge of meticulously keeping the records on a daily basis. They are responsible for entering all data into accounting ledgers or applications.
They are responsible for keeping track of a company’s financial transactions, preserving documents, and generating financial reports.
Other responsibilities include:
- Bills are entered, coded, and paid.
- Creating and sending invoices to customers.
- Receipt of past-due accounts receivable
- Getting your bank and credit card accounts in order.
- Maintaining Accounts Payable Vendors and Accounts Receivable Clients
- Preparing Account Analysis to assist the CFO/Controller and the Outside CFO.
- Month-End Closing and Audit Support Work Papers
- Documents should be scanned and attached for tax and audit support.
- Client Source Documents (PBCs) Preparation for Audit Support
Part-time vs. full-time vs. outsourced bookkeeping costs
If your organisation only requires basic bookkeeping services at this time, you must decide whether to keep the bookkeeping in-house or outsource it. If you plan to recruit and manage a bookkeeper, you must first determine if the job is part-time or full-time, full-charge. Local bookkeeping services, local CPA firms that provide bookkeeping services, and specialist, national outsourced bookkeeping firms are all options if you plan to outsource. Let’s take a look at three different ways your organisation could meet this need…
|Costs of Basic Bookkeeping|
There are no additional financial costs.
|Part – Time
$400 – $800/ month + benefits
|Full – Time
$3000 – $4,500/ month + benefits
$500 – $2,500/ month
Small and medium-sized businesses may benefit from part-time bookkeeping.
The price of a part-time bookkeeper varies greatly. Internal, part-time bookkeepers earn about $20 per hour on average, depending on the job description and position. They would need to be monitored and handled since they are usually conducting simple bookkeeping services..
A part-time bookkeeper may be a good match for your company if you can handle your job and some of the accounting each month but need a little extra support. They can do things like enter receipts and monitor employee time sheets, as well as accounts receivable and payable. When hiring a part-time bookkeeper, management must also have someone check the bookkeeper’s job.
Businesses also attempt to train an office manager or other capable employee to serve as a part-time bookkeeper. Although this can work and is often the most cost-effective solution on paper, there are risks involved if the part-time employee’s or office manager’s productivity falls short of expectations. And the cost of regulation, which is normally measured in the owner’s period, may be substantial.
Bookkeeping for Small and Medium Businesses on a Full-Time Basis
Depending on your place, the average full-charge bookkeeper salary ranges from $35,000 to $55,000 a year, plus benefits and overhead. Current listings in high-cost-of-living cities like New York or Los Angeles show full-charge bookkeeper salaries approaching $70,000, according to Glass Door. In addition, you’ll need to budget for about 20% of your income in benefits and overhead, such as office space.
Your office’s day-to-day accounting duties are handled by a full-time bookkeeper. The pillar of your company’s financial strength is keeping the accounts in order and up to date. In this case, hiring a full-time bookkeeper might be the best option.
A full-charge bookkeeper is responsible for paying fees, billing customers, handling time-sheets and payroll, and processing financial statements at the end of each month. As the company owner, you may need to double-check the final results to ensure accuracy.
Small and medium-sized businesses may benefit from bookkeeping outsourcing.
You’ll have to determine the aspects of your financial management, including bookkeeping, to outsource, just as you did when recruiting an internal bookkeeper and defining their position. Depending on the amount of transactions and sophistication of services available, the average cost of outsourcing the bookkeeping needs varies from $500 to $2,500 per month. Outsourcing has the advantage of allowing you to tailor the services you receive to your specific bookkeeping requirements.
You may also outsource more sophisticated management accounting and controller roles to obtain a full “virtual accounting department,” which will undoubtedly increase your monthly payments but could be just what you need at this point in your growth cycle. If your company is growing, you should consider switching to full accrual accounting, which includes financial and management reporting that can help you scale. This level of financial management is typically needed not only for yourself, but also for your main stakeholders, such as banks, investors, and advisors.
Many companies are unable to move to outsourcing because they don’t understand how the pieces fit together in this model. However, with today’s technological advances, outsourcing has never been simpler. In comparison to an in-house bookkeeper, outsourcing will offer advanced and less expensive bookkeeping services.
Which Kind of Bookkeeping Is Right for Your Business?
There are significant variations between the three types of bookkeepers and the services they can provide to your company. Determine the method works best for your company and begin addressing the issues, or possible issues, with your books.
When is the right time to turn to accounting services that are outsourced?
Simply Finance will act as an advanced bookkeeping and accounting department for you. With a team of bookkeepers, staff accountants, and controllers based in the UAE, we have the resources you need to support your company and boost cash flow and income.