How Much Should Bookkeeping Actually Cost a Small Business?
Why Costs Matter
Bookkeeping might not be the most glamorous part of running a small business, but it’s one of the most essential. Every dollar misclassified or unrecorded could mean tax penalties, cash flow problems, or poor strategic decisions. So, how much should small business bookkeeping cost? The answer depends on your business’s size, complexity, and whether you go it alone or bring in the pros. In this guide, we break it all down—costs, options, and consequences.
Avoid overpaying, under-managing, or falling into DIY traps—here’s what smart business owners spend & why.
What Does Bookkeeping Typically Include?
Before diving into costs, let’s unpack what bookkeeping services generally offer:
Transaction Recording: Tracking income and expenses.
Bank Reconciliation: Ensuring your records match your bank statements.
Payroll: Processing employee payments and handling taxes.
Financial Reporting: Generating balance sheets, income statements, and cash flow reports.
Accounts Payable/Receivable: Managing invoices and collections.
Tax Preparation Support: Readiness for filing business taxes.
Knowing what’s included helps you compare apples to apples when evaluating pricing.
Average Monthly Costs for Small Business Bookkeeping
Bookkeeping costs vary widely, but here’s a general breakdown:
Service Type and the Cost Range (Monthly)
DIY Software (e.g., QuickBooks) $20 – $70
Freelance Bookkeeper $200 – $500
Small Accounting Firm $500 – $2,000
Full-Service Virtual Bookkeeping $300 – $1,500
DIY vs. Professional Bookkeeping Costs
Using software is cheaper but comes at the cost of your time and possibly accuracy. Hiring a
pro may feel pricey upfront, but it saves hours and reduces risk.
In-House Bookkeeper vs. Outsourced Services
An in-house bookkeeper can cost $3,000–$5,000/month, including salary and benefits.
Outsourcing offers flexibility and fewer overheads, ideal for most small businesses.
Bookkeeping Pricing Models Explained
Understanding pricing models is key to avoiding surprise fees.
Hourly Rates
Bookkeepers may charge $25–$100/hr. This works for sporadic needs but can get expensive
fast.
Flat Monthly Fees
Great for predictable budgets, these range from $300–$800/month for basic services.
Package-Based Pricing
Tiered packages offer varying levels of service—perfect if your needs change with seasons or
growth.
Factors That Influence Bookkeeping Costs
Several factors can significantly impact your bookkeeping bill.
Business Size and Industry
More employees or regulated industries (like healthcare or finance) require more detailed records.
Number of Transactions
A café with 500 transactions a month will pay more than a consultant with 50.
Payroll and Tax Filing Needs
Payroll complexity and tax deadlines increase both the workload and cost.
When Should You Outsource Your Bookkeeping?
You should consider outsourcing when:
You’re spending more than 5 hours a week on books.
Your books are constantly behind.
You’re preparing for tax season, and it’s overwhelming.
You’re missing out on deductions or making financial decisions in the dark.
Cost vs. Consequences: What Happens if You Ignore Your Books?
Neglecting bookkeeping can have serious repercussions:
Tax Penalties: Late filings or incorrect reports cost big.
Cash Flow Problems: Poor visibility into your finances can lead to missed payments or overdrafts.
Poor Decision Making: Without accurate data, planning becomes guesswork.
Audit Risk: Disorganized records are a red flag to auditors.
The ROI of Good Bookkeeping
Investing in professional bookkeeping delivers measurable returns:
Better cash flow forecasting
Reduced tax liability
More funding opportunities (clean books build lender trust)
Time savings that let you focus on growth
How to Choose the Right Bookkeeping Solution
Credentials to Look For
Certified Bookkeeper (CB)
QuickBooks ProAdvisor
CPA (if offering tax advice)
Technology and Tools Used
Cloud-based platforms (Xero, QuickBooks Online)
Automation tools for invoicing and expense tracking
Questions to Ask Before Hiring
What’s included in your service?
How do you handle tax time?
Can you grow with my business?
When it comes to hiring the right bookkeeping service for your company, it is important to see how your future bookkeeper communicates, interacts, and delivers what you need. We at Finveritas Bookkeeping continually keep the communication channels open, for frequent contacts to keep you in the black! We pride ourselves on being easy to connect with and on our response times with each of our valued clientele!
FAQs
1. What is the average monthly cost of a bookkeeper for a small business?
Most small businesses spend between $300–$800 per month on bookkeeping, depending on complexity.
2. Is bookkeeping software enough for a small business?
For very small operations, yes. But as transactions grow, software alone often isn’t sufficient.
3. How often should bookkeeping be done?
At a minimum, monthly. Ideally, weekly or even daily for busy businesses.
4. What’s the difference between bookkeeping and accounting?
Bookkeeping is recording transactions. Accounting is interpreting them for financial strategy and tax purposes.
5. Can I do my own bookkeeping?
You can, especially with software. But it’s time-consuming and risky if you’re not confident.
6. When should I switch from DIY to hiring a professional?
When the time spent or the risk of errors outweighs the cost of outsourcing.
In Summary: Spend Smart, Bookkeep Smarter
Bookkeeping isn’t just about keeping receipts in order—it’s about empowering your business with clarity, compliance, and confidence. Whether you’re bootstrapping or scaling up, understanding the cost of bookkeeping helps you make the smartest financial decisions. Spend wisely now to avoid costly mistakes later.
