The Real Cost of Outsourced Bookkeeping: A Detailed Breakdown

Bookkeeping is an essential aspect of running a business, but it can also be time-consuming and complex. As a result, many employers are turning to outsourcing accounting and bookkeeping services to save time and resources. 

But how much does it cost to outsource bookkeeping? There is often confusion surrounding the cost of outsourced bookkeeping for employers. In this article, we will provide a detailed breakdown of the real outsourced bookkeeping cost. 

We will explore the typical price ranges for these services, discuss the factors that influence these costs, and highlight the benefits and considerations for businesses deciding to outsource their bookkeeping tasks.

Factors Affecting Outsourced Bookkeeping Costs

Several factors can influence the cost of outsourced bookkeeping services for employers. These include:

Volume of transactions

One of the primary factors affecting outsourced bookkeeping costs is the volume of transactions that need to be processed. The more transactions your business has, the more time and resources it will take for a bookkeeper to manage them. 

As a result, businesses with high transaction volumes can expect to pay more for outsourcing their bookkeeping tasks.

Complexity of accounts

The complexity of a business’s accounts can also impact the cost of bookkeeping services. 

If your company has multiple departments, projects, or revenue streams, a bookkeeper may need more time and resources to manage your accounts effectively. This can result in higher costs for outsourcing bookkeeping services.

Frequency of service

The frequency of bookkeeping services can also affect the cost. Some businesses may require daily bookkeeping services, while others may only need it on a weekly or monthly basis. The more frequent the service, the higher the cost will be.

This is because the bookkeeper will need to dedicate more time and resources to maintaining the company’s accounts. 

Level of expertise required

The level of expertise required for bookkeeping tasks usually impacts the cost. The more complex and specialized the tasks, the higher the cost of outsourcing bookkeeping is likely to be.

Some businesses may only need basic bookkeeping services, such as data entry and bank reconciliation, while others may require more specialized professional services, like tax preparation or financial analysis.

Additional services

The agreed-upon scope of services provided by the outsourced bookkeeping providers can also influence the cost. Some providers may offer additional services, such as financial reporting and budgeting, which can add to the overall cost. 

It is important to carefully consider your needs and choose a service package that aligns with your bookkeeping requirements and budget.

Software and technology

The type of software and technology used by the outsourced bookkeeping provider will increase or decrease the cost. 

Some providers may use advanced accounting software, which can result in higher fees. However, this investment in technology can also lead to more efficient and accurate bookkeeping processes, ultimately saving you time and money in the long run.

Pricing Models for Outsourced Bookkeeping Services

There are three common pricing models used by outsourced bookkeeping service providers: 

• Hourly rates
• Fixed monthly rates
• Value-based pricing

Each model has advantages and may be more suitable for certain businesses than others.

Hourly rates

Hourly rates are the most common pricing model for outsourced bookkeeping services. In this model, businesses pay a set hourly rate for the time spent on their bookkeeping tasks. 

The hourly rates can vary greatly depending on the experience and location of the service provider. According to Worldmetrics.org, the average hourly rate for bookkeeping services in the US ranges from $20 to $50 per hour. 

This may seem like a significant cost, but it is important to consider that outsourcing can still bring businesses significant cost savings compared with hiring an in-house bookkeeper.

Fixed monthly rates

Fixed monthly payments are another popular outsourced bookkeeping pricing model. With this model, you pay a set monthly fee for a specific package of bookkeeping services. 

These packages range from basic bookkeeping tasks to more comprehensive financial management services. The fixed monthly cost often includes a set number of hours or tasks, with additional costs for any extra work required.

The average cost for these packages can range from $500 to $1,500 per month for a small business, according to Worldmetrics.org.

Value-based pricing

The value-based model is a more personalized approach to outsourcing bookkeeping services. Instead of charging based on hours, service providers will assess the specific needs and requirements of your business and price their services accordingly. 

This model is often beneficial for businesses with complex financial needs or those looking for more strategic financial guidance. 

The cost for value-based pricing can vary greatly depending on the level of service required, but it usually ends up being in a similar range to the fixed monthly rate pricing structure, depending on your needs and requirements.

Cost Comparison Between Outsourced and In-House Bookkeeping

Outsourced bookkeeping rates can vary depending on your business size and the complexity of your financial transactions, as can in-house bookkeeping. Let’s take a look at the averages.

In-house bookkeeping costs

The average salary of a professional bookkeeper in the US is around $54,800. However, this cost can increase significantly when considering additional expenses, such as employee benefits, office space, equipment, and training. 

Moreover, if the business has a high volume of financial transactions or requires specialized bookkeeping services, the salary for an in-house bookkeeper could be even higher.

Outsourced bookkeeping costs

Outsourcing bookkeeping to regions where more competitive rates are offered is often more cost efficient than hiring in-house. The average salary for an outsourced bookkeeper from Latin America (LatAm) is around $42,000, representing $12,800 in savings compared with the same role in the US. 

Because outsourced bookkeeping professionals do not work in your office, you also save on office space and equipment expenses.

Additionally, you can often hire accounting providers on a flexible contract basis, meaning you only pay for services when you need them and can avoid the cost of benefits normally paid to a full-time bookkeeper.

How Can You Select the Right Outsourcing Partner?

Before you choose your outsourcing partner, it is essential to understand what makes a good outsourcing partner. Here are five traits that you should look for when selecting an outsourcing provider to make an informed decision:

1. Experience and expertise: A reliable outsourcing partner should have a proven track record of providing high-quality services to clients. Look for providers with experience in your industry or similar businesses.
2. Technology and security measures: The right outsourcing partner will have up-to-date technology and security measures in place to ensure the safety and confidentiality of your financial data.
3. Communication skills: Effective communication is crucial when working with an outsourced team, especially when dealing with financial matters. Look for providers that have clear and timely communication processes in place.
4. Customizable services: Every business has unique bookkeeping needs, so it is vital to find an outsourcing partner that offers customizable services to meet your specific requirements.
5. Cultural fit: When working with a virtual bookkeeper or remote team, cultural fit can play a crucial role in the success of the partnership. Look for service providers that share values and work ethics similar to those of your company. 

Top 3 Companies for Maximizing the Value of Outsourced Bookkeeping Services

To find the best value for your money, it is essential to work with reputable bookkeeping outsourcing services and recruiting firms that specialize in providing outsourced bookkeeping services. In no particular order, here are our top picks:

1. Near

At Near, we pride ourselves on providing comprehensive support to help businesses find the best outsourced bookkeeping services for their needs.

Our dedicated team of experts specializes in recruiting professionals based in LatAm and can assist with the entire hiring process.

We have significant experience helping US companies recruit top remote bookkeepers. For example, we helped a health and beauty e-commerce company hire a bookkeeper five times faster with annual overhead savings of $26,000.

2. SLC Bookkeeping Services

SLC is a Salt Lake City, Utah-based bookkeeping service. It has achieved QuickBooks ProAdvisor Program Elite status and won the 2020 Happiest Award from TINYpulse for professional consulting services.

The firm’s customized outsourced bookkeeping services allow it to create your chart of accounts, establish accounts payable and accounts receivable policies and procedures, design a payroll processing system, and more.

3. BooXkeeping

Nationwide outsourced bookkeeping service BooXkeeping specializes in handling the bookkeeping functions of small and medium-sized businesses (SMBs). It was named Best of Accounting for Client Satisfaction in 2022 and is a Top Bookkeeping Services Provider, according to Financial Services Review Magazine.

The company’s main services include bookkeeping for SMBs, franchise bookkeeping, and white-label services.

Final Thoughts

Outsourcing bookkeeping can be a cost-effective and efficient solution for businesses looking to streamline their financial tasks.

The real cost of outsourcing bookkeeping varies based on factors such as the volume of transactions, complexity of accounts, frequency of services used, expertise required, and software and technology used. 

However, with three flexible pricing models available and the potential savings that come from not having to pay for benefits or office space for in-house employees, outsourcing can provide significant cost savings for employers. 

At Near, we understand the importance of finding qualified professionals at affordable rates. That’s why we specialize in recruiting top remote talent from LatAm to help US businesses thrive. 

Contact us today to learn more about our comprehensive recruitment process and how we can help you find the perfect candidate for your outsourced bookkeeping needs. 

Book a free consultation call to discover how Near can help you hire top remote bookkeeping talent while saving thousands on annual overhead.