If you are comparing bookkeeping services, one of the first questions is usually simple: How much should this actually cost?

There is no single price that fits every small business because bookkeeping workload varies enormously. A consultant with one bank account and a handful of monthly transactions is very different from a contractor running payroll, paying subcontractors, tracking several jobs, and processing hundreds of transactions.

The useful way to compare bookkeeping prices is to understand what creates the workload, what is included, and what you are comparing the service against.

What Determines the Cost of Bookkeeping?

The biggest cost drivers are usually transaction volume and complexity. A bookkeeping company may also consider the number of bank and credit-card accounts, payroll activity, loans, accounts payable and receivable, sales platforms, job costing, classes or locations, and the condition of the existing books.

A business whose books are already accurate and current is generally easier to take over than one that is six months behind with unreconciled accounts and years of inconsistent categorization.

Monthly Bookkeeping vs. Cleanup Work

It is important to separate ongoing monthly bookkeeping from cleanup and catch-up bookkeeping.

Ongoing bookkeeping is the recurring work that keeps the books current: reviewing and categorizing transactions, reconciling accounts, maintaining records, and producing financial reports. Cleanup is corrective work. It may involve months of unreconciled accounts, duplicated or missing transactions, incorrect balances, improperly categorized activity, or books that have fallen far enough behind that the business cannot confidently provide usable records to its CPA.

If that describes your situation, you do not need to fix it before hiring a bookkeeper. See our bookkeeping cleanup and catch-up services.

Why the Cheapest Bookkeeping Quote May Not Be the Cheapest Option

Two bookkeeping quotes can look similar while providing very different levels of service. Ask whether you will have a dedicated bookkeeper, how often accounts are reconciled, what reports are included, how questions are handled, whether cleanup is included or separate, and what happens when your assigned bookkeeper is unavailable.

Price also needs to be considered alongside accuracy and continuity. Cheap bookkeeping that has to be corrected later can become expensive very quickly.

Outsourced Bookkeeping vs. Hiring an Employee

For many small businesses, the more meaningful comparison is not one bookkeeping service versus another. It is outsourced bookkeeping versus hiring an employee.

An employee is paid for the entire workday, including time when there may be little or no bookkeeping to perform. The employer also absorbs payroll taxes, benefits where applicable, vacation and other paid time, recruiting, training, turnover, equipment, and management time.

An outsourced service allows a business to buy the bookkeeping support it actually needs without creating another full-time position. Read more about our outsourced bookkeeping services.

What Should Be Included in a Small Business Bookkeeping Service?

For ongoing bookkeeping, the exact scope should match the business. Common services include transaction review and categorization, bank and credit-card reconciliation, monthly financial reporting, payroll support, accounts payable or receivable support, QuickBooks assistance, and year-end preparation for the business’s tax professional.

The important part is knowing exactly what your monthly fee covers.

Hourly Bookkeeping vs. Fixed Monthly Pricing

Hourly billing can work well for one-time projects, but it makes recurring bookkeeping costs harder to predict. Fixed monthly pricing gives the business a known recurring cost and makes budgeting easier.

Capacity Bookkeeping uses fixed monthly fees for ongoing bookkeeping. We look at the actual needs of the business and quote the work accordingly rather than forcing every company into the same package.

How Much Bookkeeping Does Your Business Actually Need?

A business does not necessarily need a full-time bookkeeper simply because the owner no longer wants to do the books. Many businesses need consistent professional attention each month without needing 40 hours of bookkeeping every week.

That is one of the reasons outsourcing can make economic sense: the business gets professional bookkeeping without paying for unused employee capacity.

Some Businesses Cost More to Bookkeep Than Others

Industry matters. A professional-services firm with relatively simple transactions may require less work than a construction company that needs job costing, subcontractor tracking, payroll, progress billing, retainage, and labor and material allocation across multiple projects. If you are in construction, see our bookkeeping services for contractors and construction companies.

Nonprofit bookkeeping can also require additional tracking for restricted funds, grants, programs, functional expenses, and board reporting. See our nonprofit bookkeeping services.

What About QuickBooks?

QuickBooks is the most common bookkeeping platform we encounter, but software alone does not determine the price. The complexity of the business and the amount of bookkeeping work matter much more. Capacity’s team includes Certified Elite QuickBooks ProAdvisors and also works with many other bookkeeping and accounting platforms. Learn more about our QuickBooks bookkeeping services.

Questions to Ask Before Comparing Bookkeeping Prices

• Will I have a dedicated bookkeeper?
• Exactly what work is included in the monthly fee?
• How often will my accounts be reconciled?
• What financial reports will I receive?
• Is cleanup priced separately if my books are behind?
• Does the company have experience with businesses like mine?
• What happens if my assigned bookkeeper is unavailable?
• Is there a long-term contract?