How Much Does it Cost to Outsource Bookkeeping?

How Much Should You Be Paying for Bookkeeping Each Month?

The costs a small business or nonprofit incurs for bookkeeping and accounting services in USA or anywhere around the world will depend upon many variables-company size and lifecycle, number of monthly transactions, number of employees and how payroll is processed, number of expense accounts, credit cards, invoices to send out, bills to pay, number of balances sheets to reconcile, and so forth In addition to these basic bookkeeping activities, your costs will be impacted by how your accounting frameworks, policies and procedures, and reporting needs are set up and administered.

Basic Bookkeeping versus Full Accounting services

Many small businesses in the early stages are primarily worried about compliance – paying bills, getting paid, recording transactions, ensuring payroll accuracy and following state and federal regulations. Eventually, your business will pass a boundary and you'll begin to place more emphasis on the requirement for timely, accurate financial reports and intelligence. This is the point at which you'll require more advanced bookkeeping, accrual-based accounting services, and management or managerial accounting to assist you with making data-driven decisions.

So your first consideration is whether you simply need compliance – basic bookkeeping - or assuming you're ready to graduate to full accounting services that will assist you with driving increased profits, improved cash flow and growth. They require totally different degrees of effort and expertise and as you can imagine, the cost for full-service accounting is a lot higher. However, most businesses that make the leap see the value and experience an ROI rapidly.

Also Read: Why to Use Bookkeeping Services For Your Small Business

What Does a Bookkeeper Do for Your Small Business?

Bookkeepers are in charge of maintaining your books closely day in and day out. They generally do all data passage into accounting ledgers or software.

They center on recording the financial transactions of a business through maintaining records, tracking transactions, and creating financial reports.

Different obligations include:

• Entering, Coding and Paying Bills

• Creating and Sending Customer Invoices

• Collecting Past Due Accounts Receivable

• Reconciling Bank and Credit Card Accounts

• Maintaining Vendors for Accounts Payable and Clients for Accounts Receivable

• Supporting CFO/Controller and Outside CFO by preparing:

o Account Analysis

o Work Papers for Month-End Closing and Audit Support

o Scan and Attach Documents for Tax and Audit Support

o Preparing Client Source Documents (PBCs) For Audit Support

Basic Bookkeeping Costs – Part Time versus Full Time versus Outsourced

Assuming basic bookkeeping is all that your company needs at this stage, you'll have to choose whether to do the bookkeeping in-house or assuming that you ought to outsource all the bookkeeping and accounting services in USA or any other part of the world. Assuming you choose to recruit and manage a bookkeeper you'll also have to conclude whether the position is part-time or requires full time. Assuming you choose to outsource, there are a couple of ways to go including local bookkeeping services, local CPA firms that offer bookkeeping services and specialized, national outsourced bookkeeping firms.

Part-Time Bookkeeping for Small to Medium Businesses

The cost of a part-time bookkeeper can vary broadly. Hourly rates for internal, part-time average around $20/hour depending on job description and location. They typically are performing basic bookkeeping obligations and should be supervised and managed.

On the off chance that you can manage your job and a portion of the accounting each month yet need some extra assistance, a part-time bookkeeper may be a good fit for your business. They can take care of business, for example, inputting receipts and tracking employee timesheets, accounts receivable and accounts payable. While hiring a part-time bookkeeper, management actually needs to have somebody reviewing the work of the bookkeeper.

Often businesses attempt to train an office manager or other employee with capacity to turn into the part time bookkeeper. While this can work and is often the least costly choice on paper, there are risks associated assuming the part time employee's or office manager's output doesn't measure up to standards. And the cost of oversight, usually in the business proprietor's time, can be significant.

Full-Time Bookkeeping for Small to Medium Businesses

The current average full charge bookkeeper's salary fluctuates between $35,000 to $55,000 each year in addition to benefits and overhead, depending on your location. According to Glassdoor, current listings in significant expense of living urban communities like New York or L.A. show the salaries creeping towards $70K. In addition, you'll have to add around 20% on top of salary for benefits and overhead including office space.

A full-time bookkeeper handles the day-to-day accounting services and functions for your office. Keeping your books in order and up-to-date is the foundation of the financial strength of your business. Hiring a full-time bookkeeper in this situation could be the right answer for you.

You can anticipate that a full charge bookkeeper should run operations associated with paying bills, billing clients, managing time-sheets and payroll, and processing financial statements at month end. As a business proprietor, you will in any case have to investigate the end results to guarantee accuracy.

Outsourcing Bookkeeping for Small to Medium Businesses

Similarly as with hiring an internal bookkeeper and defining their role, you'll have to conclude what pieces of your financial management make sense to outsource including the bookkeeping capacity. The average price of outsourcing your bookkeeping needs ranges from $500 to $2,500 a month depending on the number of transactions and intricacy of services required. A key advantage of Outsourcing is it enables you to customize the services you get to your bookkeeping needs.

In addition, you can outsource more advanced management accounting and controller functions to get a total "virtual accounting department", which will certainly add to your monthly fees, however could be what you want at this stage in your growth cycle. Assuming your business is moving into a growth stage, you really want to consider graduating to full accrual based accounting services, with financial and management reports that help you scale. Typically you will require this degree of financial management for yourself as well as for your key stake holders including banks, investors and advisors.

On the off chance that either part-time or in-house bookkeeping is not the ideal arrangement, switching to outsourced bookkeeping or accounting services could be your most ideal choice. Many businesses are worried about switching over to outsourcing, not understanding how the pieces fit together with this model. Yet, with today's advancements in innovation, outsourcing has never been easier. Outsourcing can give advanced and less costly bookkeeping service than a typical in-house bookkeeper.

Conclusion

Today there are many various types of back office outsourcing companies, ranging from project-just outsourcing, hourly rates, flat recurring monthly service fees, and a la carte packages to fit each business' one of a kind necessities. In the event that you're growing, the outsourced bookkeeping service ought to have the option to assist you with scaling by adding full service accounting when you are ready for it.

Another advantage of moving your bookkeeping to outsourcing is that you could possibly change the role of an existing employee for example the part time bookkeeper, and move her to a revenue generating role instead of an expense. Free up your good employees to assist you with focusing on growth!

Global FPO(www.globalfpo.com)is an Outsourcing Accounting firm consistently recognized for its exceptional outcomes and strong work culture, with 500+ happy and satisfied clients across. They provide everything from straightforward tax return work, or basic bookkeeping and accounting services in USA or anywhere in the world, to advance & complex Financial Statements to CPAs & Accounting Firms implementing best industry practices & values. Their Accounting solutions are comprehensive, customized to unique business operating model and use “best-of-breed” technology under a strong two-tier reviewing mechanism ensuring minimum risk of error.

Global FPO is a professional outsourcing and consulting organization offering bookkeeping outsourcing services across the globe including USA, Canada, UK, Europe, Australia, New-Zealand, Japan, Dubai and Far East. GFPO experts provide services at competitive prices to our clients in areas of:

1. Bookkeeping & Controller level services

1. Tax Filing,

1. Payroll processing

1. Accounting Advisory and GAAP Reporting

1. Audit and Transformation consulting

To explore more on Global FPOand its online Accounting/ Bookkeeping, Tax Return preparation, Financial Statements, Accounting Advisory, Payroll Processing and related Business Services contact us at:

Phone (USA): +1 (832) 426-2521, +1 (347) 781 5928 or

Email: contact@globalfpo.com.