Article by Navneet
Founders around the world are asking: What are standard bookkeeping rates?
Like most things in life, there are no easy answers, but with this article we’re going to make it a whole lot easier for you.
Such a simple question gets complicated because a number of factors can significantly affect how much a bookkeeper will demand in their bookkeeping services price.
Where is the bookkeeper based? How much experience does the bookkeeper have? What bookkeeping price packages are on offer? Will they be in-house or not?
All of these questions lead to different bookkeeping monthly rates.
As a founder you are interested in one thing: Am I underpaying and going to get shoddy work or am I overpaying (and still getting shoddy work)?
Read on to find out exactly how much you should be paying for high quality bookkeeping work.
Table of Contents
How Much Does A Bookkeeper Charge Per Hour?
While the simplest solution is to get an in-house bookkeeper, there are a ton of unseen costs that come with it. For a small and growing business this adds unnecessary baggage.
For example, don’t be surprised if the total cost of an in-house bookkeeper ranges from 1.25x to 1.4x their annual salary. Think of all the additional things you have to pay for to hire someone in-house: Payroll, contributions and making sure their workspace is suitable. They all add up.
Moving on from that costly option, we have a few paths we can examine: Outsourcing to a contractor, outsourcing to an agency, or (our personal favourite) a virtual bookkeeping service.
Freelance Bookkeeper Hourly Rate 2021
Today outsourcing has become a bit of a buzzword. From political debates to freelancing, outsourcing has become a huge part of doing business. Bookkeeping isn’t immune to this and there are no shortage of options on freelance platforms.
For example, on the largest freelance exchange, Upwork.com there is a huge amount of bookkeepers from all over the world. Bookkeeping prices range from $50 an hour for bookkeepers based in countries such as the United States, Canada and the UK down to $15 an hour for bookkeepers based in foreign countries such as the Philippines and Ukraine.
There is something attractive about getting a bookkeeper for so cheap, after all what could go wrong with bookkeeping – it’s not coding, right?
But we have to warn you: If you pay peanuts, you’ll get monkeys.
How Much Do Virtual Bookkeepers Charge? How Much Should a Bookkeeper Charge per Hour?
While on the surface bookkeeping may not seem essential to the survivability of your business, having bad books can turn into a nightmare if you ever need an accountant to conduct a specialised review.
Combine this with a long list of bookkeeping services and you may find yourself at a big disadvantage if you don’t invest in good bookkeeping.
The quality with cheap outsourced bookkeeping often leaves something to be desired and outsourced bookkeeping rates reflect that. While cheap up front, they can lead you to costly mistakes down the line. Even the more expensive freelancers mentioned above come with their own issues.
When you have a contractor or freelancer, you might save on costs but there are still a lot of the operational headaches like training for your specific business, hand-holding and in general making sure that you’re both on the same wavelength.
As these freelancers often have dozens of clients, you might also not get the proper amount of attention your business deserves.
Independent Bookkeeper Rates 2021
That brings us to the next option: a virtual bookkeeping service. Think of all the flexibility of a freelancer with all the proper attention to detail of a full time employee.
Here too you can find many options and our rule about stinginess still stands.
A virtual bookkeeping package can cost anywhere between $150 to $600 a month for tiny businesses with only a couple dozen transactions with the higher end providing services in addition to standard bookkeeping.
These providers are experts in providing a full suite of bookkeeping services in a virtual package, so you can expect to get the same treatment that you’d expect from a high quality in-person bookkeeper.
This also means they won’t expect any handholding – most already have the experience to handle virtual bookkeeping without bothering the owners.
Additionally, thanks to their low overhead, many of these firms offer specialisation in multiple fields. This is a huge advantage, as a bookkeeper who understands your industry well won’t just be balancing your books; they’ll be recommending ways to streamline your business too.
Clearly – virtual bookkeeping is our preferred solution.
As a founder, you get all the expertise of a traditional bookkeeper at a lower average monthly bookkeeping costs and with the flexibility that an ecommerce business demands.
We’re going to go through some examples of bookkeeping cost per month and associated yearly salaries, rather than the bookkeeper hourly rate traditional bookkeepers demand in four of the largest English-Speaking markets.
This isn’t a definitive bookkeeping services price list but it should give you a very good idea of what to expect.
Bookkeeping Price Packages in Canada
Starting with the Great White North, you can expect to pay between $300-$800 Canadian Dollars for monthly bookkeeping packages. This range accounts for price increases based on company size and the amount of bookkeeping needed.
Additionally, virtual bookkeeping packages may offer different services for additional fees. You can find packages that offer bookkeeping software training, full tax preparation, and cash flow planning. It pays to shop around to see which package best suits the stage of life your business is in.
Canadian Bookkeeping Rates 2021
Let’s contrast this with the traditional in-house bookkeeper in Canada.
You can expect to pay an average hourly wage of $20.79 in Ontario, not including contributions and other associated costs. All in all, the yearly cost of a bookkeeper can top between $42,000-$55,000 before any additional costs associated with hiring an employee.
For further comparison of other states, the median wage of an Albertan bookkeeper amounts to $23.11/hour, and $18.71 for a bookkeeper in Nova Scotia.
Bookkeeping Price Packages in the USA
Thanks to the scale of American business, you have plenty to choose from and with that comes a lot of competition on price for bookkeeping services.
A typical package can start as low as $175 and go up to $500, with high end providers offering monthly packages with add ons such as company formation, tax planning and even personal tax assistance. Remember, this is for small firms with only a few dozen transactions per month.
A more standard package includes the basics: software, monthly reports, payment reconciliation and payroll management.
American Bookkeeping Rates 2021
Now because of how huge the US is, you’re going to see a lot of wage differences based on which state you’re based in. Here is a quick reference guide for in house bookkeeper annual salaries by state:
|Alabama average yearly bookkeeping salary:||$37,640|
|Alaska average yearly bookkeeping salary:||$48,460|
|Arizona average yearly bookkeeping salary:||$42,510|
|Arkansas average yearly bookkeeping salary:||$36,780|
|California average yearly bookkeeping salary:||$48,460|
|Colorado average yearly bookkeeping salary:||$43,750|
|Connecticut average yearly bookkeeping salary:||$48,950|
|Delaware average yearly bookkeeping salary:||$43,660|
|District of Columbia average yearly bookkeeping salary:||$55,970|
|Florida average yearly bookkeeping salary:||$41,220|
|Georgia average yearly bookkeeping salary:||$41,360|
|Hawaii average yearly bookkeeping salary:||$42,900|
|Idaho average yearly bookkeeping salary:||$38,930|
|Illinois average yearly bookkeeping salary:||$43,880|
|Indiana average yearly bookkeeping salary:||$39,400|
|Iowa average yearly bookkeeping salary:||$40,100|
|Kansas average yearly bookkeeping salary:||$36,580|
|Kentucky average yearly bookkeeping salary:||$38,580|
|Louisiana average yearly bookkeeping salary:||$38,060|
|Maine average yearly bookkeeping salary:||$39,810|
|Maryland average yearly bookkeeping salary:||$46,420|
|Massachusetts average yearly bookkeeping salary:||$49,040|
|Michigan average yearly bookkeeping salary:||$39,970|
|Minnesota average yearly bookkeeping salary:||$44,820|
|Mississippi average yearly bookkeeping salary:||$38,220|
|Missouri average yearly bookkeeping salary:||$39,890|
|Montana average yearly bookkeeping salary:||$36,520|
|Nebraska average yearly bookkeeping salary:||$38,840|
|Nevada average yearly bookkeeping salary:||$40,110|
|New Hampshire average yearly bookkeeping salary:||$42,370|
|New Jersey average yearly bookkeeping salary:||$47,300|
|New Mexico average yearly bookkeeping salary:||$38,560|
|New York average yearly bookkeeping salary:||$47,220|
|North Carolina average yearly bookkeeping salary:||$40,040|
|North Dakota average yearly bookkeeping salary:||$38,560|
|Ohio average yearly bookkeeping salary:||$40,530|
|Oklahoma average yearly bookkeeping salary:||$39,360|
|Oregon average yearly bookkeeping salary:||$43,240|
|Pennsylvania average yearly bookkeeping salary:||$40,950|
|Puerto Rico average yearly bookkeeping salary:||$23,670|
|Rhode Island average yearly bookkeeping salary:||$46,110|
|South Carolina average yearly bookkeeping salary:||$37,490|
|South Dakota average yearly bookkeeping salary:||$34,650|
|Tennessee average yearly bookkeeping salary:||$41,400|
|Texas average yearly bookkeeping salary:||$41,920|
|Utah average yearly bookkeeping salary:||$40,150|
|Vermont average yearly bookkeeping salary:||$42,890|
|Virginia average yearly bookkeeping salary:||$43,400|
|Washington average yearly bookkeeping salary:||$46,700|
|West Virginia average yearly bookkeeping salary:||$35,300|
|Wisconsin average yearly bookkeeping salary:||$39,780|
|Wyoming average yearly bookkeeping salary:||$39,470|
Bookkeeping Price Packages in the UK
Moving onto the European Anglo-sphere we have UK virtual bookkeeping packages.
Within the UK you can expect packages that range in price from £200 to £750 per month. This again accounts for the different sizes of businesses.
The standard packages offer payroll management, monthly reports, VAT reporting and assistance with any questions you might have. The more premium packages also include forecasting and strategising services as well as more specialised tax planning advice for an additional fee.
British Bookkeeping Rates 2021
To see how a virtual bookkeeping solution stacks up versus hiring a standard bookkeeper in the UK we’ve decided to look at the average annual salary for a bookkeeper in the UK’s major cities.
|London average yearly bookkeeping salary:||£26,000|
|Manchester average yearly bookkeeping salary:||£25,000|
|Birmingham average yearly bookkeeping salary:||£22,000|
Bookkeeping Price Packages Australia
To round off our list we’re going down under: Australia. Here, virtual bookkeeping packages can range between $159 to $499 Australian Dollars per month.
In a basic package you can expect your monthly bookkeeping tended to, quarterly financial statements, support and software set up. In the more premium package you will find consulting services, projections, tax services and more, for a price.
Australian Bookkeeping Rates 2021
In order to compare whether virtual bookkeeping is worth it in Australia let’s look at the average salary for an in house bookkeeper in some of the major cities.
|Sydney average yearly bookkeeping salary:||AU$56,776|
|Melbourne average yearly bookkeeping salary:||AU$54,616|
|Perth average yearly bookkeeping salary:||AU$58,876|
|Brisbane average yearly bookkeeping salary:||AU$59,540|
That wraps up our list of bookkeeping rates and as you can see, founders stand to gain plenty by opting for a virtual option instead of in house.
Ecommerce Bookkeeping Services: How Are Bookkeeping Rates Calculated?
Because every business is different and it’s impossible to make a one-size-fits all approach to these rates, it’s important to understand what goes into them.
We hinted at this above where you can expect to pay more the larger your business is, as there are different bookkeeping rates per transaction but there are other factors that can impact a bookkeeper’s rate.
When you hire a bookkeeper, you aren’t just paying for someone to keep track of transactions. You are paying for payroll servicing, tax understanding and that bookkeeper’s expertise. That expertise can be from experience, or expertise in a specific niche.
For example, it’s no surprise that a bookkeeper sporting a Chartered Professional Accountant (CPA) designation is going to charge more than one who doesn’t. Is a CPA certification necessary for your business?
Well, it depends.
At some point, your business will most likely need to get a CPA, so you could view this as cutting steps out of the whole process. Outsourced accounting pricing is bound to be cheaper too but other founders may want to wait until their revenues are larger to start hiring CPA’s.
In the same vein, hiring a bookkeeper with no real world experience may save some dollars upfront but cause future problems. That’s why we offer full bookkeeping account cleanup services for ecommerce, literally to clean up the mess left behind by others.
The next piece of the puzzle is industry experience – we don’t have to tell you that every industry has its own nuances. Part of the reason for hiring a bookkeeper is to streamline your business, you don’t want a bookkeeper who won’t know how to treat your company and will bombard you with questions rather than help.
That’s why an industry with more nuances than most may command higher rates and ecommerce definitely has its fair share. Think of all the software, platforms, reports etc, that you would have to teach your mom about if she were to start doing your books.
Thankfully there are virtual bookkeeping services such as Etail Express that target ecommerce specifically and guarantee a minimum experience level cutting all the guesswork out of your search.
Recommended Bookkeeping Solution:
I could go on and on about why founders are better off dropping the old world solution of hiring an in house bookkeeper and moving on to virtual bookkeeping services to get more bang for their buck instead.
I could talk about the extreme flexibility it offers founders to scale their bookkeeping needs as their business grows.
Or, I could mention the comfort of getting a professional bookkeeper who can work independently without babysitting through a virtual bookkeeping service. Don’t you have enough on your plate already?
But I’ll just keep it to this: This is a solution with founders in mind. Flexibility with niche knowledge specifically aimed at your industry means you’re not just getting your books handled: You’re getting access to a high quality deep base of knowledge, too.
Take 2 minutes to see how our virtual ecommerce bookkeeping service will reduce your management load, and ensure that high quality bookkeeping work is done on time in the background while you’re busy doing other things.