In this article, we will explain the costs of hiring a bookkeeper and the costs you could be paying by doing it yourself.
It is easy to think the time you spend bookkeeping is free, but it is not.
By using your own time to do your bookkeeping, it seems like it’s free, but if you are preventing yourself from earning income with that time, it is far from it.
Let’s determine the cost of doing the bookkeeping yourself.
Doing the books yourself: $85/hr x 4 hrs = $340/month
Now, let’s see what it costs to hire a professional.
Hiring a bookkeeper: $95/month (for RemoteBooksOnline)
Looking at this example, it is much cheaper, nearly $200, to outsource your bookkeeping needs to a professional.
In order to determine what is right for you, it would be beneficial to start tacking the amount of time it takes you to complete your bookkeeping needs. You can then use an online calculator to estimate how much your time is worth. With this information you can figure out the cost of doing your own bookkeeping and decide if outsourcing is worth it for you.
Also consider if you use a software to complete your taxes, that cost should be included in your calculations. By adding cloud accounting software to the above example, it would add $30/month towards doing the books yourself. This means there would be an over $200 difference between outsourcing and DIYing in this scenario.
The indirect costs of doing your own bookkeeping.
Now, maybe you are not billing client hours yourself, so it is hard to think you are losing much money by doing your books, but keep in mind, that time might have been used to help grow your business in other ways. Are you the go to for marketing ideas? Do you build personal customer relationships that develop into long-term clients? Every hour you spend on bookkeeping, means you cannot use that time in other ways to help your business succeed and grow.
Think about the other things you do with your time to help your company. Does it bring in at least $115/ month? If so, hiring a bookkeeper would be beneficial to you.
Here are three ways a bookkeeper can save you money
Not only does hiring a bookkeeper free up your time to cultivate your business, but there are also some other ways it can save you money.
It will save you money on your taxes.
A bookkeeper will have the abilities and expertise to confirm all of your expenses are accurate and organized. This will save you time in the tax season and allow you to benefit from all potential tax deductions.
It will save you money on accounting fees.
Hiring an accountant is much more costly than hiring a bookkeeper. If you are not absolutely confident in your booking skills, an accountant could charge you anywhere from $150 up to $400 an hour for work that could have been done by a bookkeeper.
The more clear, concise, and accurate your books are when you send them out to your account, the less it will cost you to file your taxes.
It will keep your business healthier, by not overwhelming you.
Bookkeeping is a detail-oriented, time-consuming job. If you are working over 60 hours a week as is, add bookkeeping to that and you will be depleted. Other areas of your business could easily suffer if you are exhausting yourself with the books. Outsourcing your bookkeeping needs can take a huge amount of stress off your shoulders.