When running a business, keeping track of the day in, day out, and overall financial health of your company is of the utmost importance, whether you run a startup, a small business, or a large corporation. However, with the potential of errors and penalties, it is crucial to stay on top of your bookkeeping and might be worth bringing in help. But can you afford a bookkeeper’s salary?
Every business owner has a million and one things to worry about. A skilled bookkeeper can help you avoid fines, fraud, or compliance issues. If you’re thinking of employing a bookkeeper for your business, we’ll break down everything bookkeepers can do and some factors that figure into the cost of hiring one.
What Do Bookkeepers Do?
Bookkeepers are professionals who assist in account preparation and document daily financial transactions. There is a certain amount of clerical work associated with bookkeeping and herein lies the difference between bookkeeping and accounting. While bookkeepers are responsible for recording daily transactions, accountants use this compiled information to generate financial models and make expert interpretations on what financial moves to make and when for the biggest returns. Bookkeepers’ focus is on the day to day and accounts focus on the long-term strategy, the bigger picture.
If you need help from a bookkeeper than an accountant, here is a brief list of the many day-to-day financial tasks they can help you with:
- Client billing
- Payroll and withholding taxes
- Receipt organization
- Monthly financial statement preparation
- Recording expenses
- Past-due account management
- Everyday expenditures and bill payment
- Recording forms of income
- Balancing bank accounts
- Deposits/other transaction confirmation
When needing to hire a bookkeeper, however, there are several cost factors that feed into how much it’ll cost to engage a bookkeeper:
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1. What Do You Need a Bookkeeper For and How Long Do You Need Them?
The first step in determining how much a bookkeeper will likely cost your business is determining what services you will need them for. Bookkeepers can handle many financial aspects of your business such as generating financial reports, handling accounts payable/receivable, and handling payroll. Make a list of all the services you’ll be needing as well as how frequently you need these tasks done.
The next step in estimating how long you’d need bookkeeper services for? Would you need them for ongoing projects or only occasionally? Making the decision on hiring a bookkeeper on a per-project basis or hiring one on an ongoing basis can affect how much it will cost you to hire a bookkeeper.
2. What Experience and Expertise are You Looking For?
There can be some cases where bookkeepers’ roles overlap with that of an accountant depending on expertise, certification, and on-the-job experience. However, if you find yourself needing a bookkeeper with this higher-level expertise, it will likely cost you more. Advanced training, specialized experience, advanced degrees or certifications will affect a bookkeeper’s rate and something to consider for your budget. The top three bookkeeping certifications you may see are:
- Certified Bookkeeper (CB) from the American Institute of Professional Bookkeepers (AIPB)
- Certified Public Bookkeeper (CPB) from the National Association of Certified Public Bookkeepers (NACPB)
- Quickbooks ProAdvisor from Intuit (the makers of Quickbooks)
Some bookkeepers are trained in specific industries and are experienced with the nuances in each industry. Bookkeepers with experience in job sectors such as law, health care, non-profit, or retail have specialized knowledge, and may be a better fit for your business but can also affect how much it will cost to bring onto your team.
The following are typical bookkeeper salaries and rates on Upwork based on freelancers in North America with over 1,000 hours and 90% success rate:
|Type of Bookkeeper||Average Hourly Rate|
|Bookkeeper (Data Entry, Excel)||$10-35|
|Senior bookkeeper (Some accounting skills)||$40-75|
|Bookkeeper and Accountant||$20-150+|
3. Does Your Business Have Any Complexity?
Consider your business’s financial or tax situation. If your business has complex factors at play such as multiple locations in multiple states or a varied number of vendors or contractors, you might need a bookkeeper that has had experience or has the knowledge to deal with them. This expertise and the ability to handle more complex and, at times, more sensitive financial information might make hiring the right bookkeeper more expensive.
Furthermore, if you’re looking for a bookkeeper that already knows the software your company is working with, you might be paying more for that knowledge and experience as well. Look at what systems you have in place and determine if your bookkeeper will need knowledge on any specific system or software. If you want to move to a new software or system, keep in mind that it may take your new bookkeeper some time to get up to speed and may need a higher hourly.
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4. State by State Considerations
Along with the above factors, the state in which you need to hire can also affect the average bookkeeper salary. Looking at the Occupational Employment Statistics from the U.S. Bureau of Labor Statistics, bookkeepers charge the most in the state of Alaska where the average salary is $48,640 per year and $23.39 per hour. South Dakota is on the other end of the scale with local bookkeepers charging $33,970 and $16.33 per hour. Overall, the national average for bookkeepers are $40,662 per year and $20 per hour.
Bookkeeper Salary State By State Breakout
Many factors can affect how much it will cost you to bring a bookkeeper onto your team. The tasks you need them for, for how long, complexities you’re expecting them to handle, and the state your business is in might all affect how much money you’d need to set aside in your budget.
If you’re in need of a bookkeeping solution but aren’t sure the best route for your business, consider speaking with an expert at ScaleFactor to discuss online bookkeeping software and to schedule a demo.