The cost of bookkeeping service could be as low as £20 per month or as high as £2000+ per month. What is the reason for such a huge variation in cost? It’s all due to every company having its own different requirements.
The expenses a small company incurs in bookkeeping services will vary based on many factors. The size of the company, life cycle of the company, the number of transactions per month, amount of employees, how payroll is handled, and expense accounts such as credit cards, invoices to be sent out or pay bills as well as the number of balance sheets to reconcile, and so on. In addition to these basic bookkeeping activities, your expenses will be affected by the way your accounting policies, systems, and procedures, as well as requirements for reporting, are set up and maintained. Before deep down into the details first, take a look at what a bookkeeper does:
What Does a Bookkeeper Do?
A Bookkeeper maintains the record of a company’s profits and expenses, assuring that the financial documents are in order. The name implies that they manage the books in a systematic manner. So all the records are ready for use:
- When It’s time to file your taxes or
- When financial information is required to be provided to an accountant, or to the HMRC
The daily tasks of a bookkeeper depend on the organization they’re working for.
For an Independent Person:
Let’s say an independent person, maybe an Uber driver hires a bookkeeper. In this instance, the day of the bookkeeper is likely to be centered around keeping track of drivers’ writing-offs for business. In this way, they’ll be able to save money when it comes time to pay their self-employment tax.
For a larger company:
However, suppose a small or medium-sized company employs the services of a bookkeeper. In this situation, they’ll most likely be spending their time on a greater number of things for example:
- Payroll management
- Bank account and credit card reconciliation
- Analysis of daily transactions
- Management of inventory
Basic Bookkeeping Service Costs
If basic bookkeeping is the only thing your company requires at this point in time then you’ll have to decide if you want to handle the bookkeeping internally or outsource your bookkeeping service. If you decide to employ a bookkeeper, then you’ll be required to decide if the job is part-time or full-time. If you choose to outsource, then there are a number of options to consider, with local bookkeeping companies and local CPA companies that provide bookkeeping services. Let’s take a look at three possibilities your company might consider to fulfill your needs.
- Part-Time Bookkeeping Service Costs
- Full-Time Bookkeeping Service Costs
- Outsourced Bookkeeping Service Costs
Part-Time Bookkeeping Service Costs:
The part-time bookkeepers could vary greatly. The hourly rate for an internal part-time bookkeeper average around £20/hour based on the description of the job and the place of work. They generally perform basic bookkeeping tasks.
If you are able to manage your work and some of the finances each month, but you need additional help, a part-time bookkeeper may be a good choice for your company. They are able to do tasks including putting in receipts and keeping track of employee timesheets, accounts receivable as well as accounts payable. If you hire an employee who is part-time, the managers still need to be able to supervise what the bookkeeper is doing.
Most businesses are trying to instruct office managers or other employees to become part-time bookkeepers. Although this is a viable option and is typically the most affordable option, there are some risks when the part-time office manager’s work isn’t within the requirements.
Full-Time Bookkeeping Service Costs:
The average full-time bookkeeper’s pay ranges from £20,000 and £55,000 per year with benefits and overhead depending on where you live in the UK. Based on Glassdoor the current advertisements in high-cost living cities such as London. indicate that salaries are rising towards £70K. Additionally, you’ll have to put in approximately 20% of your salary for advantages and expenses, such as office space.
A full-time bookkeeper is responsible for daily bookkeeping duties for your office. Making sure your books are in order. The hiring of a full-time bookkeeper in this scenario might be the best option for you.
You can expect a full-time experienced bookkeeper to handle the tasks of billing clients, paying bills as well as managing timesheets and payroll, and the preparation of monthly financial statements. If you are a business owner, you’ll still have to review the final outcomes to ensure that they are accurate.
Outsourced Bookkeeping Service Costs:
Just as with hiring an internal bookkeeper and defining his role, you’ll need to decide what aspects of your finance management are appropriate for outsourcing, including the bookkeeping task. The price for outsourcing your bookkeeping services is between £500 and £2,500 per month based on the number of transactions as well as the complexity of the services you require. One of the benefits of outsourcing is that it allows you the option of tailoring the services you get to meet your specific bookkeeping requirements.
Furthermore, you may outsource more sophisticated managerial accounting and controller tasks to get an entire “virtual accounting department”, that will definitely add to your monthly costs but may be exactly what you require at this time in your growth. If your company is in the growth phase and you are considering transitioning to full accrual-based accounting, which includes managerial and financial reports to help you grow.
In general, you’ll require this degree of financial management not just for you but also for your most important stakeholders like advisors, investors, banks, and other financial institutions. If in-house or part-time bookkeeping isn’t the right option, switching to outsourced bookkeeping or accounting might be the best choice.
How Can We Help?
Pro Tax Accountant’s tagline is “Your Online Tax Accountant in the UK” and every team member is constantly educated in such an approach that makes them an essential part of the organization and is concerned about the success of your company.
However, many people think about the cost of the service and only want to complete their bookkeeping in the cheapest way possible, sacrificing experience and obtaining a poor quality service, which eventually results in regret and a messy bookkeeping system that is filled with inaccurate or incomplete documents, certainly not the kind of thing any entrepreneur would want in their quest for success.
If you’d like to determine whether we’d be the right match for your company, we’d be delighted to hear from you. You can either contact us via phone at 07985 689912, email us at info@ataas.co.uk or book an appointment direct that suits you CLICK HERE