The cost to hire a bookkeeper can vary greatly depending on things such as your location, whether you choose a freelancer vs a bookkeeping company, the bookkeeper’s experience, and their possible certifications. On average, in the United States, a bookkeeper typically makes around $20 per hour according to the Bureau of Labor Statistics. If you hire a freelance bookkeeper who is new to the field with limited experience and no certifications, they are going to cost a lot less than a bookkeeper who is certified, has experience in your specific industry, and has been a bookkeeper for a while.
It also depends on your business’s bookkeeping needs. If you only need someone to do the most basic bookkeeping like recording and organizing your books, it will cost less than if you want them to track invoices, do regular reconciliations, track payroll, etc.
There are some bookkeepers who will charge you a flat rate instead of an hourly rate. If you choose to go with a bookkeeping service, such as Remote Books Online, you will not be charged by the hour, but rather by the number of accounts and transactions your business encounters in a month. As a business owner, you must first know what your business needs, then research and find the right bookkeeper or bookkeeping service for you.
Are there any tasks that a bookkeeper cannot perform?
A bookkeeper cannot file taxes on your behalf without having a Preparer Tax Identification Number. A bookkeeper also does not interpret or analyze the data they supply, that is an accountant’s specialty.
A bookkeeper tends to stick with recording and organizing the financial data and then using the data to prepare the financial statements. They can also help with verifying receipts and issuing invoices.
Are there different kinds of accounting?
There are many different types of accounting. The most common types of accounting are tax accounting, managerial accounting, and financial accounting.
Can a bookkeeper call themselves an accountant?
No, a bookkeeper cannot call themselves an accountant. To become an accountant, there are educational requirements. A bookkeeper does not require any degree or certification. Although, it would be wise to hire a bookkeeper who has taken the initiative to become certified.
Can a bookkeeper do tax returns?
A bookkeeper’s job traditionally involves recording and organizing all your financial transactions and preparing your financial statements. While some bookkeepers do offer the service of preparing and filing your tax returns, it is quite uncommon. The bookkeepers who can do your taxes on your behalf must have an IRS Preparer Tax Identification Number (PTIN) to be authorized to prepare tax returns in the United States. It is important to find out when looking for a bookkeeper what services they do offer and what qualifications they have to perform those services.
So, while there are a few bookkeepers who can do your taxes for you, most businesses employ a bookkeeper for the daily year-round tasks to keep their books up-to-date and accurate then turn to a qualified accountant, such as a Certified Public Accountant (CPA), for all tax preparation and filing. An accountant typically has more tax knowledge than a bookkeeper and will be more up-to-date with all tax laws and potential deductions. Keep in mind, that an accountant cannot do their job properly without those up-to-date records your bookkeeper kept all year. Paying an accountant to do a bookkeeper’s job can get expensive very fast, as they will charge much more for their time.
Can a bookkeeper pay my bills on my behalf?
Yes, a common bookkeeping task that most bookkeepers offer is managing your accounts receivable and accounts payable. This means they will make sure you are both getting paid and paying your bills.
Can a bookkeeper prepare tax returns?
Many bookkeepers offer tax preparation services, which means they make sure all your financial documents are prepared and ready for tax filing. Not all bookkeepers can prepare your tax returns for you though, but some may offer this service, it just requires the bookkeeper to have a preparer’s tax identification number.
Can a CPA work remotely?
Yes, a Certified Public Accountant (CPA) can work remotely. As much of a business’s financial documentation is already digitized, your accountant does not need to work in-house. A CPA can look at all of your financial records from anywhere in the world and provide you with information and advice to make the best decisions possible for your company.
Can bookkeeping be done remotely?
Yes, it can, and it has become an increasingly popular choice to outsource your bookkeeping needs online. Deciding to go with a remote bookkeeper typically costs less and you have a better chance of finding a bookkeeper with specific knowledge of your business.
Can I do my own bookkeeping?
Yes, especially if your business is small and has few transactions. The dilemma is do you have the extra time to complete your books accurately and regularly. You must weigh the value of your time as a business owner with the cost of outsourcing your bookkeeping.
Do bookkeepers do payroll?
Some bookkeepers do offer the service of completing your payroll, but payroll can be a complicated process. Each employee’s gross income must be calculated using their hourly wage and any unpaid time off or overtime worked must also be considered. Then deductions should be calculated, in their specific order, followed by any contributions, such as to a retirement account. Not to mention that each employee can change their W-4 (withholding statement) whenever they deem necessary, changing aspects of how their paycheck will be calculated. Payroll can quickly become more stressful than it is worth, which is why it is mostly outsourced. Luckily, this process can also be automated nowadays with payroll software making the process even smoother.
Most bookkeepers simply input the data into your books after a payroll service completes the payroll and sends the documentation to you. A bookkeeper will post the payroll information to the corresponding journal to track it properly. Those wage expenses will also be shown on your income statement under operating expenses. It is important to track how much you are paying employees as it can help you when determining if you have the extra funds to hire another employee. It is also crucial to reconcile your payroll regularly to make sure there are not any errors occurring.