Whether you do it yourself or hire a professional bookkeeper, keeping track of your finances is so important for small businesses. Effective bookkeeping means you will have a clear picture of your business’s financial position.
Bookkeepers help businesses by:
- Tracking cash flow and financial information with accounting software
- Doing bank reconciliation
- Helping with tax preparation
A bookkeeper is certainly the first necessary step before hiring an accountant and making informed decisions. It also means you can stay on the right side of the law, avoiding non-compliance issues and unwelcomed reprimands from the tax authorities.
Because bookkeeping work is a crucial aspect of running any small business, many business owners choose to outsource to an expert to ensure it’s done accurately.
But how much do bookkeepers charge in Australia?
In this blog, we explore the costs involved in hiring a bookkeeper, the different pricing models they use, the factors influencing their fees, and how you can choose the right bookkeeper for your business.
So, if you’re wondering, “How much does a bookkeeper cost?”, keep reading–this blog is for you!
The Role of a Bookkeeper
The flow of funding in and out of a small business can be chaos without proper bookkeeping. A professional bookkeeping business can help you to maintain accurate financial records. They can help with things such as invoicing and recording expenses for your business and ensuring your books are balanced with all transactions accounted for.
“But, can’t I do that myself as a small business owner?”
Yes, sure you can, but the real question is, will you? You see, financial management systems are only as good as the quality of data entered into them. Have you ever heard of the term “garbage in, garbage out”? There is no benefit in having a system like Xero if you don’t keep it up-to-date.
And without keeping track of your business’ financial transactions, you can forget financial reporting or any indication of your business’ health. Or hiring an accountant who can help you with your business’ tax returns. (Read more: How Much Tax Does a Small Business Pay in Australia?)
As Sharon MacKinney recalls from her personal experience as a sole trader before hiring a bookkeeper, it was almost too late when she realised she needed a bookkeeper to be able to take advantage of accounting services come tax time:
The best time to enter data into your financial management software is immediately. However, many small business owners delay inputting data into their systems because, understandably, they are busy ‘doing the do’ and serving their customers and clients.
Small business owners need to have access to accurate information to make informed decisions. Engaging a qualified bookkeeping business can take the hassle out of the whole bookkeeping process. They will not only maintain your financial records and ‘balance the books’, but they can also generate financial statements and reports that you can rely on to make those all-important decisions in your business. Many bookkeeping businesses can also help with payroll, PAYG (Pay As You Go) lodgements and BAS (Business Activity Statement) lodgements as well.
How Much Do Bookkeeping Services Cost?
While the question “how much does a bookkeeper charge?” is quite popular, it’s not a straightforward answer. The reason is that many bookkeepers charge differently and the pricing for bookkeeping services can vary widely and is typically based on the specific needs and complexity of your business.
Let’s not forget the different types of bookkeepers, like freelance bookkeepers, or in-house bookkeepers.
Instead of hourly billing, bookkeepers may charge based on the volume of transactions, the number of employees for payroll processing, and other factors such as the scope of services required, including BAS preparation and representation.
This approach reflects the real workload involved and ensures that you’re not overpaying for services but are covered for the exact needs of your business.
When considering bookkeeping services, it’s essential to discuss your business’s unique aspects to get a clear understanding of the expected costs.
This way, you can budget effectively while ensuring that all your financial and compliance obligations are professionally managed.
Factors That Influence Bookkeeping Fees
There are three main factors that influence how much a bookkeeper will charge. These include:
1. The Size of Your Business
The cost of bookkeeping is directly related to the size of your business. It probably comes as no surprise that the larger your business, the greater number of transactions you will likely have, and the more complex your needs will be. This means that bookkeeping for a small business with one employee won’t come at the same rate as a larger business with multiple locations and employees.
2. The Level of Service Required
The level of service you require from your bookkeeper will also influence the price you will need to pay for services. Some small businesses want basic bookkeeping services, such as entering expenses and reconciling bank accounts, whilst others may need a great level of service including payroll and/or consultancy and advice beyond simple bookkeeping.
3. How Experienced a Bookkeeper Is
Small businesses can expect to pay highly experienced bookkeepers more than those starting out in the industry. However, experienced bookkeepers can handle more complex work and can provide small business owners with a highly sought-after service.
The most cost-effective option might look different based on the factors discussed above.
Looking for a great bookkeeper near you? Contact us today for a free consultation.
Pricing Models for Bookkeeping Services in Australia
There are four main pricing models that bookkeepers in Australia use, including:
- Hourly rate
- Fixed fee
- Monthly packages
- Annual packages
Let’s take a look at each.
Hourly Rate
It is very common for bookkeepers to work on an hourly rate basis in Australia. In an hourly rate scenario, your bookkeeper will keep track of their time and bill you for hours worked. They will then bill you at agreed intervals (for example, weekly, fortnightly or monthly).
Fixed Fee Per Transaction
Some bookkeepers might charge according to how many transactions are entered or processed each month. Many also provide flat fees for particular things, such as BAS lodgements. This approach works well for businesses that have fluctuating transaction volumes or specific tasks they want their bookkeeper to do for them.
Monthly Packages
Monthly packages are considered a popular model for most bookkeepers. A bookkeeper will typically have several packages to choose from depending on what your small business needs and the level of service required. Many bookkeepers will also be able to tailor a monthly package to suit your specific needs.
Annual Packages
Annual packages are very similar to monthly packages in that your bookkeeper will provide a range of bookkeeping services for a specified rate. The only difference is the timeframe. It also gives you peace of mind that your books are going to be taken care of for the whole year.
Tip: Perhaps it’s worth requesting a tailored package based on your needs, as certain periods of the year require more resources than others–like tax season. Don’t hesitate to compare bookkeeper quotes to ensure you’re happy with what your bookkeeper charges.
Is a Bookkeeper Worth It?
The secret to making bookkeeping cost-effective for your small business is getting the right balance between what you pay and the return on your investment. A bookkeeper can save you time and money, allowing you to focus on your business instead of your books (aka, constant data entry). There are also things you can do to maximise the value you receive from your bookkeeping service.
Firstly, it’s good to organise your financial transactions (your bookkeeper can even help you with this in the first instance). You don’t want your bookkeeper wasting their precious time (that you pay for) to locate receipts or invoices that are lost somewhere so safe you can’t even find them!
It’s also a good idea to use bookkeeping software. Using software streamlines the bookkeeping process substantially, Whilst you will need to pay a subscription fee to use it, it will save you money in the long run.
Regular communication with your bookkeeper is another way you can maximise your investment.
Choosing the Right Bookkeeper for Your Business
Choosing a bookkeeper is a big decision for a small business owner. It’s important to find someone you can trust and rely upon to take good care of your books. The whole point of outsourcing is to make life easier for you – not to give you something else to worry about.
Things to consider when choosing a bookkeeper are:
What do you want your bookkeeper to do?
Do you need a basic bookkeeping service or do you require BAS, PAYG, and payroll services as well? Not all bookkeepers are licensed BAS Agents. So, if you need BAS services, you will need to check your bookkeeper has the right credentials.
What experience will your bookkeeper require?
The more complex your bookkeeping needs, the more experienced bookkeeper you will want to choose. If you need assistance with things like payroll or tax advice, you should engage a bookkeeper who has experience in those areas.
What software do you use in your business?
When you’re researching bookkeeper options, check what software they are proficient in. For example, if you use Xero in your business, engage a bookkeeper proficient in Xero.
Are they a good fit for you and your business?
When outsourcing anything in your business, it’s important to find someone who is a good fit.
Things you might consider when assessing this include:
- Are they effective communicators?
- Can they offer the flexibility you need for your small business?
- Do their values and ethics align with yours?
- Do you think you could work effectively with this person and trust them to do a good job?
Your budget
Of course, your budget and how much you can afford to pay a bookkeeper will also be a key factor in who you choose to hire.
Are Bookkeepers in Demand in Australia?
Bookkeepers are in demand, especially for small businesses that do not have the luxury of having an in-house finance team. One of the main reasons small businesses decide to engage the services of a bookkeeper is compliance. With ever-changing government compliance requirements and strict regulatory conditions in Australia, having an expert bookkeeper in your corner can be very useful. The digital transformation of bookkeeping has streamlined bookkeeping processes, but professional oversight is still necessary. Machines can’t yet replace an experienced human bookkeeper.
Where to find a bookkeeper?
Investment in good bookkeeping practices is an investment in the future of your business. However, all businesses are different and it is a good idea for all small business owners to weigh up the costs and benefits.
When it comes to finding a bookkeeper, you could do a Google search or go directly to a known and trusted brand, such as First Class Accounts. We offer bookkeeping services in Sydney, Melbourne, Brisbane, and numerous other locations around Australia. You can be confident you’ll never be far from a First Class Accounts bookkeeper.
Find a First Class Accounts Bookkeeper near me.
Feel free to contact our friendly team at First Class Accounts to find out more.
