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Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services

How Much Does Bookkeeping Cost For A Small To Medium Sized Business?

Understanding virtual bookkeeping along with accounting processes is paramount to any business. Companies are moving toward virtual bookkeeping services out of convenience and cost savings. This is a more modern way of managing records for a business with the use of digitization and cloud storage. Find out more about how virtual bookkeeping services and accountants compare and which is best suited for your company at this time.

What is a Virtual Bookkeeping Service

One of the most popular forms of automation for businesses is virtual bookkeeping services. A virtual bookkeeper is a digitized form of various levels of bookkeeping and accounting practices needed by businesses. Most small businesses start out with a basic bookkeeping service that is online, while enterprise-level corporations tend to use managerial accounting services.

Finding the right virtual bookkeeping service depends on the business and its end goals for bookkeeping and accounting. At the very start, every small business should set up a basic bookkeeping program, which is available with a virtual bookkeeping service.

A software program like QuickBooks or NetSuite is practically the standard for these services. These are also popular programs with company owners who are not bookkeepers or accountants, which is a great sign. Plus, company owners can continue utilizing financial data from the software, i.e., QuickBooks, even if they no longer use their service.

Costs for In-Person Bookkeepers and Accountants

Virtual bookkeepers compare to in-person bookkeepers and accountants in a number of ways. The cost of a full accounting department on the payroll versus that of a part-time bookkeeper who works fully remotely is astronomically more than you want to pay in 2022. Now is the time to avoid overhead and streamline processes in the back office.

Hiring a part-time bookkeeper when first establishing a business is a smart investment. They are able to set up all financial reports and documents, as well as manage any filing and tax details for a company from day one.

Hiring a part-time bookkeeper hourly, in the beginning, reduces any excess cost in case there is less demand than expected. This best determines a budget for bookkeeping, so business owners and managers stay on track with spending. Yet, a part-time bookkeeper is like a full-time bookkeeper and that will be covered in a moment, which is hired in-house as an employee.

As an employee for a company, the company is responsible for providing a salary, benefits, and a physical location to work or remote work accessibility.

Outsourced Bookkeeping Costs in Comparison

Outsourced bookkeeping costs anywhere from $500 to $7,500 per month. This is slightly more expensive than a part-time bookkeeper. However, the company pays for only those services that are used by the outsourced bookkeeping service, so technically there are additional cost-savings.

The most common services of outsourced bookkeepers include virtual bookkeeping services, cloud-based bookkeeping, and the use of accounting software to manage a company’s financial data.

This is considered the more modern way to manage bookkeeping and accounting. It also provides greater flexibility. A virtual bookkeeper is remote and available much more than an in-person bookkeeper.

The use of a remote bookkeeping service also eliminates a lot of costs for a company. This includes payroll and taxes for part-time or full-time bookkeepers, as well as employee benefits at the company.

The more expensive option is a full-time in-person bookkeeper who earns $3,000 to $4,500 a month, along with benefits. This is when you may also need to hire an accountant or accounting firm. Typically, accounting services cost the same each month as determined by a flat rate for service tiers.

Having an entire accounting department within a company is becoming less common thanks to the benefits of flex work and telework options like virtual bookkeeping. However, corporations in the financial sector, especially, and other industries are required to have an accounting department for oversight purposes.

Here is where companies could supplement a full-time accounting department while outsourcing payroll or other services.

Benefits of Virtual Bookkeepers

A virtual bookkeeper benefits a small to medium-sized business in several key areas. There is little investment in getting started with a virtual outsourced bookkeeping service. Everything is managed digitally and online, and all documents and information are shared via a computer and software like QuickBooks or NetSuite.

This makes understanding reports and data easier for most business owners, as these programs are available to those not skilled in bookkeeping or accounting.

Virtual bookkeepers also require no additional setup or investment with in-house bookkeeping and full-time accounting departments. Simply start scanning receipts and invoices, send vendor information, and set up reports.

Before you know it, you are already on your way to getting your information established for quarterly reports.

Bookkeepers Versus Accountants

The primary difference between bookkeepers and accountants is the level of financial detail involved with the service provider. A bookkeeper deals with recording and organizing finances, including receipts and invoices. An accountant is responsible for analyzing and summarizing financial data.

Generally, a company will hire both a bookkeeper and an accountant at some point in order to be able to best interpret financial data and reports. A certified public accountant (CPA) has more advanced training in accounting processes compared to a bookkeeper who is specialized in taxes or payroll, for example.

Choose AccountingDepartment for Outsourced Bookkeeping

Let AccountingDepartment do a full takeover of your company accounting department today. We handle bookkeeping and accounting, as well as serving as your controller and advisory service provider. Contact us today to access our technologically savvy accounting services.

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