If you are an organization that has never worked with bookkeeping services for small business before, you may not be sure quite what to expect. There are a lot of different options and providers available, all of which have all sorts of different fee structures. The total cost to you as the owner can be roughly calculated based on your own information about pieces of data like the total volume of your transactions, whether or not there is information regarding employees to be recorded, job costing, and many other factors. In general however, most providers fall into one of two broad camps when it comes to fees: Hourly, and Flat Rate.
• Hourly contractors – Usually providers will charge based on their own education and experience; feel free to ask them how they arrive at the rate they request. There are a few specific things to keep in mind here. If they are charging below the average rate, they may be inexperienced; that doesn’t mean they don’t have formal training, just that they are new to bookkeeping. If they charge significantly less than average rates, recommend that they take a bookkeeping test so you can get a clear idea of their skill level. You don’t want to risk an audit just to save a few dollars.
• Fixed price contracts – The other main fee structure for bookkeeping services for small business is fixed price contracts. In cases like these, you will typically discuss with the bookkeeper what the fee will be, and agree upon a monthly charge in advance. Many times, they will itemize out what is included, such as a certain amount of transactions, and fixed amounts to cover time spent on issues such as reporting or statement preparation. You can also expect to pay a one-time fee to set up your account with a new provider, and be asked to make a deposit as well.
Whichever price structure a contractor uses, make sure to inquire as to their business references, level of education, and experience. If you do so, you can save yourself significant hassle later, by screening out bookkeeping services for small business that don’t fit your particular requirements and situation.