Small business bookkeeping introduction

Small business bookkeeping might be one of the most commonly avoided tasks in industry today. Most entrepreneurs start their small businesses because they have a passion for their product or service – bookkeeping is often seen as chore that must be tolerated to stay in business. Because of this, hiring a small business bookkeeping service can be a great way to keep your energies focused on the business, letting an expert take care of the financial details.

In bookkeeping, an accountant keeps a comprehensive record of how much your small business owes creditors and how much is owed to you. The accountant also records how much you have invested in equipment and inventory. Typically, small business bookkeeping includes both accounts receivable and accounts payable, as well as services such as preparing financial statements (such as balance sheets, income statements, and cash flow statements) and taking care of bank reconciliation.

While the costs of small business bookkeeping can run the gamut depending on your company's specific needs, accountants usually charge a flat rate per month for basic services. The cost climbs as the volume of work expands: the more transactions and statements you expect your bookkeeper to prepare and the more frequently you need them, the more you'll pay.

Rates can vary depending on your geographic area, the size of the firm, and the experience and seniority of your accountant. For the most basic bookkeeping services, you can expect to pay $500 to $1,500 per month for a qualified accountant to manage your finances.

In some cases, the accountant will charge an hourly rate until they get a feel for your business and how much time is involved in the work you want done. After a few months, they’ll have a good idea of your needs and you’ll be able to negotiate a long-term flat monthly rate.

For more services that go above and beyond typical small business bookkeeping, such as financial planning, accountants typically charge an hourly rate. Tax preparation also carries an additional cost.