How Much Does A Bookkeeper Cost?

If you’re running a business, big or small, you’ve probably wondered at some point: “How much does it cost to hire a bookkeeper?” It’s a great question. The answer, however, isn’t one-size-fits-all. Let’s break it down so you can decide what’s right for your business.

What Does A Bookkeeper Actually Do?

Bookkeepers handle the day-to-day financial admin that keeps your business ticking over. Here are some of the tasks they can take off your plate:

• Recording financial transactions (like sales and expenses)
• Reconciling your bank statements
• Managing accounts payable and receivable
• Preparing financial reports so you know where your money’s going
• Tracking expenses to make sure you’re staying on budget
• Helping you stay on top of tax compliance (hello, VAT!)

In short, they’re the unsung heroes of your financial world. A good bookkeeper ensures your records are accurate, so when the tax man comes calling, you’re not scrambling to find receipts stuffed in drawers.

What Affects the Cost of a Bookkeeper?

When it comes to bookkeeping costs, there’s no single answer because it depends on a few key factors:

1. What Do You Need Them to Do?

The scope of work is a big factor. For example:

If you run a small business with straightforward finances, you might only need someone to reconcile your accounts once a month.

If you’ve got more going on (like payroll, VAT returns, and detailed financial reporting), you’ll need a more comprehensive service.

2. How Often Do You Need Their Help?

You can hire bookkeeper’s on an hourly, monthly, or project basis:

Hourly: Perfect for occasional tasks, like catching up on overdue accounts.

Monthly: Ideal if you want regular updates and ongoing support.

3. Experience and Qualifications

The more experienced the bookkeeper, the higher their rates. If they’re certified or trained in specific software like Xero, QuickBooks, or Sage, you’re paying for that expertise as well as their knowledge.

4. Where Are You Based?

Costs can vary depending on your location. A bookkeeper in London might charge more than one in a smaller UK town because of higher living costs. However, most bookkeepers nowadays can work virtually and therefore costs are increasingly becoming the same across the board.

5. In-House vs. Outsourced

In-House: Hiring someone directly means paying a salary, benefits, and other overheads. It’s usually best for larger businesses that need full-time support.

Outsourced: A freelancer or bookkeeping service is more cost-effective for most small businesses.

What Does a Bookkeeper Cost?

To give you an idea, here are some ballpark figures:

Hourly Rates

Freelance bookkeepers often charge between £30 and £60 per hour for basic services.

If they’re more experienced or specialised, expect to pay £50 to £100 per hour.

Monthly Rates

For a small business with straightforward needs, monthly services usually cost between £200 and £500.

More complex services, like VAT returns and payroll, might range from £500 to £3,000 per month.

Full-Time Salaries (In-House)

An in-house bookkeeper typically earns between £25,000 and £35,000 per year. Add benefits like pensions, and the total cost increases.

How Do You Choose the Right Bookkeeper?

The right bookkeeper for your business isn’t just about cost. It’s about finding someone who understands your needs and can help you stay on top of your finances. Here’s how to choose:

1. Know What You Need

Be clear on what tasks you want help with. Do you need someone to manage your VAT returns, or do you just need a monthly reconciliation? Knowing this will help you narrow down your options.

2. Check Their Credentials

Look for qualifications like ICB (Institute of Certified Bookkeepers), AAT (Association of Accounting Technicians) or Accountants qualifications. Experience in your industry is also a bonus.

3. Use Technology

Bookkeepers who use cloud-based tools can save you time and money. Make sure they’re comfortable with the software you’re using.

4. Get Quotes

Don’t just go with the cheapest or first option. Compare rates and services from multiple bookkeepers or agencies to find the best fit for you.

Is Hiring A Bookkeeper Worth It?

Absolutely. A bookkeeper isn’t just an expense; they’re an investment in your business. The right bookkeeper for you can help you save time, reduce stress and help you avoid costly mistakes. Plus, accurate records mean you’re better prepared for HMRC, and that peace of mind is priceless!