Do I need a bookkeeper?

If you’re looking for a new bookkeeper or considering outsourcing what’s currently being done in-house you may be asking yourself, how much is a bookkeeper really worth?

It’s a complicated question, because you’ve likely seen some companies charging high fees and others charging very low ones. So what’s the difference? Why such a wide range of prices?

Can a low-priced bookkeeper do just as well as a more expensive one? The answer to that question depends in part on your bookkeeper and in part on your business. Here are a few of the factors you need to consider. 

Experience and training

Not all bookkeepers are equal. The skill level of your bookkeeper is related to their experience, and also to their training. In some cases, a more experienced bookkeeper has a huge advantage, as many of the accounting rule and standard have been consistent for years. 

Experienced bookkeepers have seen it all and are often quick to recognize a problem and find a solution. 

On the other hand, there’s training. This can be a formal degree or certificate or continuing education in the industry. If your business is in an industry that’s changing recent training could mean more than years of experience in the past. 

Of course, the ideal bookkeeper has both; years of real world experience and regularly updated continuing education to stay on top of new developments and technology.  

Speaking of technology, it’s both a  blessing and a curse in the accounting and bookkeeping world. Technology can make bookkeeping faster and more accurate, but bookkeepers who rely on it to do their job for them are left with tons of costly mistakes. This is one reason low cost and inexperienced bookkeepers can be dangerous. They may charge a low rate because they can race through the work and rely on the software. In the long run, this is a huge gamble. 

Hourly vs Fixed

How your bookkeeper charges is almost as important as how much he or she charges. Hourly fees are becoming less and less common. Fixed fees per month are increasingly popular. 

When you pay hourly fees for a bookkeeper, you have no way of knowing what to expect. Each month could be a different fee and a different expense for you to factor in to your budget.

Inexperienced bookkeepers may charge by the hour because they’re unsure of how to set a flat fee. Unfortunately, that means you’re paying for the learning curve as they slowly work through your books. 

Some instances do call for hourly rates. If your bookkeeper is performing clean-up on prior periods or establishing the scope of work in the first month of the engagement, hourly rates may be the only fair form of compensation. Once the work is regular, however, make sure you pay a predictable, flat fee. Keep in mind as your scope changes so many your fee.

  

Industry Knowledge

One thing that’s often more important than raw years of experience is industry specific knowledge. A bookkeeper who specializes in your industry has a big advantage over one who serve anyone and everyone willing to pay for bookkeeping services. 

Every industry has unique patterns, certain common types of transactions, and specific tax rules that are relevant. A bookkeeper who knows the industry knows their way around the issues you’re most likely to face in your business. The more specialized the industry, the more important it is to have a bookkeeper with niche experience. 

So, how much is a bookkeeper really worth?

A great bookkeeper is in investment and will save you more money and hassle than you’ll ever spend on their services. They keep your numbers in order so you can make accurate and confident decisions and maximize your results. They also reduce your stress by removing the need to worry about the book all the time. 

If you’re doing the books yourself, thinking you’re saving money, it may be time to reconsider. If your current bookkeeper falls short in the areas above, it’s definitely time to invest in someone who is an asset to your business and not a liability.