If you plan to hire a bookkeeper, one of the first questions you’ve probably asked is how much does a bookkeeper cost? Bookkeeper salary or cost for bookkeeping services can vary widely, depending on the type of service, experience, qualification, location, and more.
The various pricing models—hourly rate, monthly fee, and salary—will also determine how much a bookkeeper costs.
In this guide, we’ll compare pricing models, cost for bookkeeping services, and other factors. We’ll also dive into how much a bookkeeper costs, how bookkeepers charge businesses for their services and when hiring a bookkeeper is worth it.
- How much does a bookkeeper cost?
- How much do bookkeepers charge businesses?
- Bookkeeping cost and rates
- How hiring a bookkeeper saves businesses money
How much does a bookkeeper cost in 2023?
The average bookkeeper salary ranges from $60,000 to $80,000 or more, not including benefits and other costs.
The hourly rate for a bookkeeper in Australia ranges from $100 to $150 per hour, but can also be more depending on the experience and tasks.
Outsourcing to an online bookkeeping service, often a cost-effective option, has a set monthly fee that ranges from $500 to $2,500, depending on business size and task complexity.
Although these are the averages, the actual cost of a bookkeeper varies depending on a number of factors. Let’s dive into each factor.
How much do bookkeepers charge businesses?
Mainly, bookkeepers use any of these three models to charge businesses—salary, hourly rate, and monthly set fee. To help you choose the right model, let’s look at how each works.
Salary – employee
A salaried bookkeeper is usually an in-house employee. They may work full-time or part-time, depending on your arrangement.
A full-time bookkeeper is ideal for large, international companies with frequent transactions. For example, public companies usually have full, in-house accounting and bookkeeping teams. They also tend to produce annual revenue that’s well over $100 million, so there’s more funding to support it.
An in-house bookkeeping team can provide time and support to focus on revenue-generating activities, but there are significant costs to consider too.
- Base bookkeeper salary
- Cost of hiring and retaining in-house talent (salary, allowances, training and development costs)
- Office space and equipment expenses
- Bookkeeping software costs
In-house bookkeeper salary ($60,000 – $80,000)
The annual salary of a bookkeeper ranges from $60,000 for entry-level to $80,000 for experienced. The median bookkeeper salary is $67,500.
Even if you hire a bookkeeper part-time and spend half the cost of the industry average, it would be about $35,000. Either way, the cost is quite substantial, considering you still need to pay for accounting and tax services.
Generally, the decision to hire an in-house bookkeeper isn’t for cost-cutting purposes, but it can come with its benefits. If your situation doesn’t require an in-house resource, outsourcing bookkeeping usually makes more sense.
Hourly rates – sole traders, freelancers, and consultants
If you engage a sole trader, consultant or freelancer as your bookkeeper, they usually charge hourly rates. The rates vary based on the types of tasks and the expertise you need.
Hourly bookkeeper rates are generally cheaper than bookkeeper salaries because contractors tend to use them. Since a contractor isn’t an employee, you don’t have extra costs for employee benefits and training. You also don’t have to pay for office space and equipment.
However, some freelancers may take advantage of this model. Without an incentive to automate tasks and create efficiencies within your back office, they can drag hours out to increase their earnings.
Hourly bookkeeper cost ($100-$150 per hour)
Hourly bookkeeper costs add up fast. For example, for 20 hours of basic bookkeeping tasks at $150 per hour, you could easily pay $3,000 per month. During busy months or tax season, you could expect to pay even more.
Another drawback of hourly bookkeeping rates is that it’s hard to budget for each month when your bookkeeping hours (and costs) fluctuate.
Set monthly fee – bookkeeping service
Online bookkeeping service providers such as Visory offer a monthly set fee. It’s often the most cost-effective of the three models. You can choose from a range of pricing plans and select one that fits your bookkeeping needs and budget.
For instance, Visory offers three different plans starting at $545/mo. The most basic plan has features such as:
- An expert bookkeeper
- Real-time, accrual-based accounting
- Monthly statements (P&L, balance sheet, and cash flow)
- Quarterly business activity statement
- A receipt and invoice capture tool
Cost for bookkeeping services (monthly fee – $545-$2,500)
Outsourcing is the best alternative if you don’t have the budget or need for an in-house bookkeeper or you simply want to cut down on employee costs. You could also opt for online bookkeeping services instead of hiring freelancers at hourly rates.
Since online bookkeeping services charge a flat monthly fee, you know exactly how much you need in your budget each month. Monthly, in-house bookkeepers cost about $5,625, while most outsourced online bookkeeping services are a fraction of this (about $500-$2,500 per month).
Remember, cost is only one factor to consider. Online bookkeeping services have more flexibility than in-house or freelance bookkeepers. If your business grows rapidly, you don’t have to worry about hiring more talent. Because bookkeeping services have teams of bookkeepers on-hand, they can more easily and quickly scale with you.
To recap, here’s a comparison of the costs for bookkeeping services based on salary, hourly, or monthly rates.
|Type of pricing
|Average cost per month
|$5,625 per employee
|Freelance, sole trader
|$3,000 per month
|Bookkeeping service (Visory)
|Starting at $545 per month
Bookkeeping cost and rates
Besides the contract type, other factors may affect the cost of a bookkeeper, such as:
- Level of experience
- Type of services
- Frequency of service
- Size of your business
When it comes to location, bookkeeper salary and freelancer rates can vary significantly due to cost of living. A report by Indeed shows the average annual salary for a Sydney bookkeeper is about $68,002. On the other hand, the average salary for a Perth bookkeeper is around $63,772.
Tasks and rates
As mentioned earlier, the cost for bookkeeping services can vary by task. Generally, they should handle the below tasks.
- Data entry (record and classify transactions to the appropriate accounts on the accounting software)
- Bank reconciliation (download bank statements and reconcile the accounts)
- Invoicing (prepare, send, and track invoices)
- Track expenses
- Generate reports
- Manage accounts payable and receivable
- Other additional duties as their skills allow
More complex bookkeeping and accounting services come with a higher cost. More complex bookkeeping and accounting services, such as BAS Lodgements, come with a higher cost.
Bookkeeping experience and qualifications
The experience and qualifications of a bookkeeper impact their salary significantly.
For instance, an entry-level bookkeeper should handle data entry, invoicing, tracking expenses, generating reports, and bank reconciliation. If they are skilled in BAS and financial statements preparation, you should expect to pay more, and so forth.
Before hiring, familiarise yourself with the different bookkeeper levels and the duties they can perform. At the same time, look out for their qualifications to help identify the right candidate.
An entry-level bookkeeper should have a Certificate IV in Accounting and Bookkeeping. But to provide business activity statement (BAS) services, they need additional qualifications and experience. These include:
- Experience – 1400 hours of relevant work
- Registered BAS Agent with Tax Practitioners Board
In addition to the above work and education requirements, sole traders, contractors and outsourced providers must hold Professional Indemnity (PI) Insurance.
How hiring a bookkeeper saves businesses money
Maintaining your books might seem manageable initially, but keeping tabs can be challenging as your business grows and transactions increase. Having a bookkeeper or bookkeeping service handle the books keeps you compliant and frees up your time to focus on your main objective – generating revenue.
But that’s not all. Hiring a bookkeeper can save you money in many ways – here are a few of them.
Spend less on accounting
A professional bookkeeper can handle more tasks than you would if you did it yourself. They can keep your books clean and organised, so you spend less time and money on accountants. A bookkeeper can handle this as part of their normal duties, thereby saving what you would spend on accounting services, which are a little pricier.
Bookkeepers are more affordable
Bookkeepers can help you perform some tasks at a far lesser cost than if you were to hire an accountant to do it for you. For instance, some bookkeepers can handle payroll processing, accounts payable, BAS, and prepare financial statements. Generally, they charge less than accountants, meaning you can save significant money.
Focus on activities that generate revenue
Hiring a bookkeeper to handle your books frees up your time and ensures back-office tasks are completed at the highest standard. While you incur the cost of their services, it frees up your time, allowing you to focus on growing your business.
As you bring in more business, the revenue covers the bookkeeping service cost. You also get more time to rest, which minimises the risk of burnout and its potential effect on your business.
Another benefit of a professional bookkeeper is that they’re responsible for keeping your books updated and accurate. With many duties demanding your attention, the risk of making errors is always present. In addition, a bookkeeper is conversant with how to treat different transactions, which can eliminate compliance-related mistakes.
Moreover, their advanced bookkeeping knowledge allows them to be more efficient than you would be performing the same tasks. All these factors contribute to savings for your business.
Easy tax lodgements
A bookkeeper helps track transactions and keep your records up to date. Consequently, you spend less time on tax preparations. They also ensure all the necessary documents are accurate and organized for smooth tax payments and return lodgement.
Get a team of bookkeepers and scale your business
Understanding how much a bookkeeper costs can help you choose the best option for your business. No matter the stage of your business (startup or enterprise), a bookkeeper can handle your books and free up your time, so you can concentrate on growing your business.
Outsourcing is a cost-effective bookkeeping option for small and large businesses. You can find freelancers at a fraction of the cost of an in-house bookkeeper salary, but an online bookkeeping service makes more financial sense. Besides being less expensive than the other two, you get to work with a dedicated team of experts.
Learn more about us and see how much bookkeeping services cost (and how much you can save), when you use Visory as your online bookkeeping service.