05 Dec Cost Evaluation For Accounting And Bookkeeping Services

All kinds of businesses need accounting and bookkeeping services to run their operations and stimulate business investment. Large organizations essentially use internal solutions that many smaller businesses cannot afford. Because of this, the majority of SMEs prefer to outsource accounting. There are a few queries that come up here: How much is it charged to hire a controller, accountant, or bookkeeper internally? What is the cost of an outsourcing accounting department? Which is ideal for my business?

You might need to hire a full accounting department, depending on the size and stage of your company’s lifecycle. Small- and mid-sized businesses (SMBs) generally have 1 to 5 employees working in their financial departments, each of whom has a specific job function, such as accountant, bookkeeper, accounting supervisor, CFO, and controller.

Without further hesitation, Get the solutions first!

Approximate Cost To Outsource Accounting In 2022

Cost is a major consideration for many small and medium-sized businesses when selecting an accounting and bookkeeping service.

In-house Accountant: A full-time accountant makes about $60,000 annually, compared to a fully internal bookkeeper’s $45,000. When two employees are added together, the total cost, excluding overhead, exceeds $100,000.

Cost to Outsource Accounting: Depending on the services needed, monthly fees for outsourced bookkeeping and controller services for small and medium-sized companies can range from $2,500 to $5,000.

Even at the high end of the range, $5,000 a month will indeed cost your business $60,000 a year, which is considerably less than what hiring an accountant as well as a bookkeeper would cost.

Annual Cost To Outsource Accounting Vs In-house

In-house

More than $100,000/per year

Outsourcing

Highest $60,000/per year

How Much Does It Cost To Outsource Bookkeeping?

The bookkeeping for many small business owners is contracted out to an accountancy firm. With an average monthly fee varying from $250 to $2,000 depending on the number and volume of transactions.  Outsourced bookkeeping costs are comparable to those forced by a contract bookkeeper.

Cost Difference: Accountant Vs. Bookkeeper Vs. Controller

Between an internal accounting team and an outsourcing service, there are significant cost differences. But the base salary of a complete in-house accounting team is shown in the chart below.

In-house Team Member’s Base Salary (Minimum)

Accountant

$57,000/annually

Bookkeeper

$40,000/annually

Controller

$105,000/annually

Full Outsourcing Accounting Cost Summary

The average annual salary for an internal bookkeeper is $74,000, according to research. Additionally, the annual expenses for the entire internal accounting team exceed $250,000. However, for only $50,000 to $60,000 a year, you can hire a full accounting team that includes a bookkeeper, staff accountant, and controller.

So, Which One Is Ideal For You?

We understand that in-house accounting is far more expensive than an outsourcing solution. But if you run a large organization then in-solution would be beneficial for you.

On the other hand, if you are a freelancer, maintain a startup, or are an SME owner then outsourcing accounting will be the right choice for you. Because it will be more cost-effective and affordable for you.

According to a survey, the following factors dominate business owners’ decisions:

1. Cost-cutting: Cost-cutting was cited as the main justification for outsourcing by 70% of businesses.

2. Scalability: Outsourcing was chosen as a scalable solution by 40% of businesses. Accounting services that are outsourced can expand and grow with your company.

3. Speed of Market: According to 20% of businesses, using an outsourced team was their main justification for doing so.

FAQs

1. How do you quote bookkeeping services?

Ans: Cost-plus pricing is a fundamental method for setting the price for your accounting services. Using this method, you calculate how much you must charge customers in order to turn a profit by adding a percentage to the cost of providing your services.

2. What are standard bookkeeping fees?

Ans: Following closely behind is New South Wales, where the average cost for similar bookkeeping services is around $35/hr. In Victoria, bookkeeping services typically cost around $37 per hour.

3. How much can I sell my accounting practice for?

Ans: How Much Is My Accounting Firm Worth? The current market rate is between 1.1 and 1.3 instances of gross revenue. The historical average is close to 1.4 times gross, and some sales are as low as one, but these are extreme examples.

Let’s Outsource Accounting With Us

The hourly rate for bookkeeping services at Eicra is $60. Our flexible Accounting Foundations Package, which includes a number of services like bookkeeping, bank/credit card mergers, and payroll, costs $250 per month. Invoice computation can also be outsourced to Eicra, allowing us to handle all of your accounting records. Talk to our experts, if you have further inquiries.