When we think about bookkeeping, many people just think of this as something that needs to be done. It’s like a chore. Very much if they want to be compliant, report taxes, or get loans to grow their business.
But, bookkeeping provides a lot more than recording numbers and receipts. Quality bookkeeping provides clarity, strategy, and a means to grow.
But again, for every small and medium-size business, there still is a question: How much should I pay for bookkeeping?
In this blog, we will touch on the real value of bookkeeping, what elements drive the costs, and how to know if you are getting good value for your money, so you can make confident decisions when hiring or outsourcing bookkeeping.
Why Bookkeeping Is More Than Just Data Entry
Bookkeeping today is more than just keeping an up-to-date spreadsheet or reconciling a bank statement. Modern bookkeepers can often be business advisors without the advisor fees, much like the difference between a chiropractor and a physiotherapist who specializes in rehabilitation. They provide information and an analysis of your business that helps you:
- Define your cash flow
- Prepare for tax time with as little stress as possible
- Evaluate and identify those areas of overspending, underperforming or losing margin
- Develop growth strategies with current financed data available to you
When we think of bookkeeping as an investment, it protects your business, keeps you compliant with IRS and your local taxes, and helps you manage smarter cash flow.
The Scope of Bookkeeping Services
Before we consider price, it’s best to understand what is typically covered in bookkeeping services. Depending on your provider, and your business needs, the coverage could include:
- Data Entry & Transaction Processing: Accurate recording of sales, expenses and bank transactions.
- Bank & Credit Card Reconciliations: Making sure things match up with bank statements so nothing is missing or duplicated!
- Accounts Receivable & Accounts Payable Management: Keeping track of amounts customers owe you and amounts you owe suppliers!
- Payroll Services: Processing employee salaries, superannuation, leave accruals, and lodging STP reports.
- BAS & GST Preparation: Making sure you are meeting ATO obligations, and lodging on time.
- Financial Reports: Monthly or quarterly profit & loss, balance sheet & other custom reports.
- Software Setup & Integrations: Setting up bookkeeping software such as Xero, MYOB, or Quickbooks, along with costing systems (POS or inventory).
The more comprehensive the service, the more value there is – and potentially the greater the costs. But it will mean more accuracy, compliance with regulations and peace of mind.
What Makes Bookkeeping Costly?
When considering bookkeeping services, it will be helpful to understand the key cost drivers:
- Business Size and Complexity: A freelancer with a few transactions in a month will have completely different needs from a retail store with inventory and payroll dealing with multiple locations.
- Number of Transactions: The more invoices, receipts, payroll runs, or reconciliations, the more time taken to keep the books in order.
- Frequency of Service: Will you need your books updated weekly, fortnightly, or monthly? The more frequent you require updates, it will typically cost more but will provide you with better real-time visibility.
- Software and Tools Utilised: If your files are using Cloud-based platforms eg: Xero, MYOB, these platforms are designed to have many processes streamlined and decreases labour time, which could decrease your fee, and some providers could bundle software costs into the overall package.
- Level of Expertise Needed: If you require advanced financial reporting or integration with other systems, you may end up with a more experienced (and higher cost) bookkeeper.
- Onshore vs. Offshore: Bookkeepers in your local market could charge you higher amounts than offshore provision, but they have a better understanding of tax laws, legislation, and time zone matters.
Different Bookkeeping Pricing Models
When it comes to bookkeeping pricing, there is no one size fits all solution. Here are the common models:
Hourly Rates: This method charges you for time used and is best for service requirements that are sporadic or irregular, though having an undefined scope can bring surprises. On average you should expect to pay between $30 – $100+ an hour based on the experience of the service provider.
Fixed Monthly Packages: A favourite among small businesses, this model allows you to know how much you will spend to get access to a service type with a fixed fee, which is great for low-level service tiers. For information purposes here are some examples:
- Basic Package: Data Entry, Bank Reconciliation – From around $300/month.
- Standard Package: includes reporting, payroll – from around $500/month.
- Premium Package: BAS prep, forecasting & advisory – from around $750/month+.
Project Pricing: Rates specified for a one-off job e.g. catching up on their backlog, new set-up on Xero, and pre-audit prep. This is quoted based upon the complexity of the tasks and resulting individual hours estimated.
Custom quotes: Customized for businesses with complex business structures and looking for a quote, i.e. multiple entities. Instructing after having a discovery session can provide an advantage.
Red flags When Comparing Costs
Low-cost bookkeepers may look good at face value, just watch for:
- No clear deliverables or timelines
- Little knowledge of Local tax rules or compliance.
- Reporting or regular reporting is not a common feature of the services they provide.
- Tending to use manual tools or outdated tools.
- Lack of professional insurance and perhaps their degree/credentials
Investing slightly more in a skilled and proactive bookkeeper can save you thousands in missed deductions, penalties, or bad decisions.
Assessing the Value You’re Receiving
When looking at your current or potential bookkeeper, here are some questions to ask yourself:
1. Are they responsive and easy to deal with?
2. Are they using cloud-based tools and automating processes?
3. Are they helping me to understand cash flow and financial trends?
4. Do they have my ATO obligations done on time every time?
5. Are they offering proactive advice and not just reactive tasks?
If you answered no to most of these questions, it is highly probable that you are not squeezing full value out of their services, even if their fees seem affordable.
Subjective Factors that Influence Your Bookkeeping Investment
Business owners often miss hidden factors that affect overall value:
- Your involvement: The more planned you are with statements, receipts, and documenting receipts the less time your bookkeeper spends chasing you.
- Technology: Being able to connect with your invoicing systems or point of sale system can dramatically diminish the manual nature of a bookkeeper’s role.
- Specialist Knowledge of your industry: If your bookkeeping specialising in your industry (retail, healthcare, construction), they know the hazards they typically will face and compliance requirements.
When considering bookkeeping service fees, consider the efficiency, accuracy, and strategic value it provides, not just the hourly or monthly fee.
In Conclusion
Selecting a bookkeeper extends beyond a financial commitment; it’s a relationship that impacts your business’s clarity, compliance and growth. Rather than looking for the cheapest option, consider the way their service aligns with your goals, the amount of time they save you and the financial certainty they provide in your everyday operations.
Whether you are a solo entrepreneur, or managing a bigger operation, investing in the right support means ensuring your books are balanced but also serve as powerful tools for growth.