If you own a small business, you have probably asked yourself this question at some point:
How much should I pay for bookkeeping services?
The honest answer is that bookkeeping fees can vary quite a bit. Some businesses may pay only a few hundred dollars per month, while others may pay several thousand dollars depending on the size of the business, the number of transactions, the condition of the accounting records, and the level of support they need.
The better question may be: What should I expect to receive for the amount I am paying?
Bookkeeping is not just data entry. Good bookkeeping gives you accurate financial information, helps you avoid tax-time surprises, and allows you to make better decisions throughout the year.
What Is the Average Cost of Bookkeeping?
For many small businesses, monthly bookkeeping services generally fall somewhere between $300 and $1,500 per month.
A very small business with only a few bank transactions and no payroll may fall near the lower end of that range. A growing business with multiple accounts, employees, loans, credit cards, inventory, or complex reporting needs will likely pay more.
Some larger or more complicated businesses may pay $2,000 per month or more for bookkeeping, accounting oversight, payroll support, financial reporting, and ongoing advisory services.
Bookkeeping may also be billed hourly. Hourly rates often vary based on the experience of the person performing the work and the complexity of the accounting. A basic bookkeeper may charge less, while an experienced accountant or CPA will typically charge more.
What Factors Affect Bookkeeping Fees?
Bookkeeping prices are usually based on the amount of work required, not simply the size of your company.
Number of Monthly Transactions
A business with 50 monthly transactions is generally easier to maintain than a business with 1,000 transactions.
The more activity running through your checking accounts, credit cards, payment processors, and loan accounts, the more time it takes to properly categorize and reconcile everything.
Number of Bank and Credit Card Accounts
Each account must be reviewed and reconciled.
A business with one checking account is much simpler than a business with multiple checking accounts, savings accounts, credit cards, lines of credit, equipment loans, and payment platforms such as Stripe, PayPal, Square, or Shopify.
Payroll
Payroll adds another layer of responsibility.
Bookkeeping fees may be higher if your accountant is also responsible for recording payroll activity, reconciling payroll liabilities, reviewing payroll reports, or preparing payroll tax filings.
Accounts Receivable and Accounts Payable
Some businesses only need basic monthly bookkeeping. Others need someone to send invoices, follow up on unpaid balances, enter vendor bills, schedule payments, and manage cash flow.
The more involved your bookkeeping provider is in the day-to-day operations of your company, the higher the monthly fee will generally be.
Condition of the Books
Clean and organized bookkeeping is easier to maintain than a file that has not been reconciled in several months.
If your books contain duplicate transactions, negative balances, uncategorized expenses, incorrect loan balances, or old accounts receivable, you may need a bookkeeping cleanup before regular monthly services can begin.
Cleanup work is often billed separately because it can require significant time and research.
Reporting and Advisory Services
Basic bookkeeping may include a balance sheet, profit and loss statement, and bank reconciliations.
More advanced services may include:
Department or location reporting
Job-costing reports
Cash-flow forecasting
Budget-to-actual comparisons
Key performance indicators
Estimated tax planning
Meetings with an accountant or CPA
These services provide more value than basic transaction coding, but they also require more time and expertise.
Should I Hire a Bookkeeper or a CPA Firm?
A bookkeeper may be a good fit if you only need help entering transactions, reconciling accounts, and producing basic financial statements.
However, many business owners benefit from working with a bookkeeping provider that understands taxes, payroll, business structure, and financial planning.
A St. Louis business CPA can look beyond whether a transaction was simply entered into QuickBooks. A CPA can also consider whether the transaction was recorded correctly for tax purposes, whether your balance sheet is accurate, and whether there are planning opportunities or potential problems that should be addressed.
That can be especially helpful when your bookkeeping information will eventually be used to prepare your business tax return.
Is the Cheapest Bookkeeping Service a Good Deal?
Not always.
A low monthly price may look attractive, but it is important to understand exactly what is included.
Some low-cost bookkeeping services rely heavily on automation and may provide very little personal review. Others may reconcile your bank accounts but leave loans, payroll liabilities, accounts receivable, or owner transactions unresolved.
Inaccurate bookkeeping can create much larger costs later.
For example, poor bookkeeping may result in:
Missed tax deductions
Incorrect income reporting
Overpaid or underpaid estimated taxes
Problems obtaining financing
Incorrect payroll filings
Expensive year-end cleanup
Delays in filing tax returns
Difficulty understanding whether the business is actually profitable
The cheapest provider is not necessarily the least expensive option over the long term.
What Should Be Included in Monthly Bookkeeping?
The exact scope will vary, but a professional monthly bookkeeping package may include:
Categorizing business income and expenses
Reconciling bank and credit card accounts
Recording loan activity
Reviewing payroll entries
Reviewing accounts receivable and accounts payable
Preparing a monthly balance sheet
Preparing a monthly profit and loss statement
Identifying unusual or missing transactions
Communicating questions to the business owner
Maintaining organized records for tax preparation
A more comprehensive package may also include payroll processing, sales tax filings, bill payment, invoicing, tax planning, or regular financial review meetings.
Before agreeing to a monthly fee, ask for a clear description of what is included and what will be billed separately.
How Much Should a New Business Spend on Bookkeeping?
A new business should avoid overpaying for services it does not yet need. At the same time, it is important to establish a good accounting system from the beginning.
For a very small startup, bookkeeping may initially cost a few hundred dollars per month. As the business grows, the cost will usually increase based on transaction volume, payroll, reporting needs, and complexity.
It is often much less expensive to maintain clean books from the beginning than to pay someone to repair several years of incomplete records later.
A qualified St. Louis small business accountant can help you determine what level of bookkeeping support makes sense at your current stage.
Questions to Ask Before Hiring a Bookkeeping Service
Before choosing a bookkeeping provider, ask:
What services are included in the monthly fee?
Are cleanup services billed separately?
How often will my accounts be reconciled?
Who will be working on my books?
How are questions and unusual transactions handled?
Will I receive monthly financial statements?
Does the provider understand payroll and business taxes?
Will my books be reviewed by an accountant or CPA?
Are tax planning meetings included?
What happens if my transaction volume increases?
These questions can help you compare providers based on value rather than price alone.
When Should I Outsource My Bookkeeping?
You may be ready to outsource your bookkeeping if:
Your books are several months behind
You are unsure whether your financial reports are accurate
Bookkeeping is taking time away from customers and operations
You wait until tax season to organize your records
You do not know how much money the business is making
Your accountant regularly has to correct your QuickBooks file
You are growing and need better financial information
You need help managing payroll, receivables, or cash flow
Outsourcing bookkeeping allows you to spend more time running your business while someone else keeps the financial records organized and current.
What Should You Pay for Bookkeeping Services?
You should pay an amount that reflects the complexity of your business and the quality of the work being provided.
For many small businesses, that may mean paying between $300 and $1,500 per month. Businesses with higher transaction volume, payroll, multiple entities, complicated balance sheets, or advisory needs may pay more.
Rather than focusing only on the monthly fee, consider whether the bookkeeping service provides:
Accurate and timely records
Clear financial reports
Responsive communication
Tax-ready accounting
Experienced oversight
Useful guidance for your business
Good bookkeeping should help you understand your numbers, make informed decisions, and reduce stress at tax time.
Looking for Bookkeeping Services in St. Louis?
If you are looking for a St. Louis business CPA or a St. Louis small business accountant, Hottenrott & Associates can help you evaluate your current bookkeeping, clean up inaccurate records, and establish an accounting process that fits your business.
The right bookkeeping arrangement will depend on your transaction volume, payroll, number of accounts, reporting needs, and the current condition of your books.
A professional review can help determine the appropriate level of service and provide a clear estimate based on the actual needs of your business.