Monthly Bookkeeping Fees
The most common early question we get from construction company owners and contractors looking for bookkeeping help is:
How much will it cost to clean up the books and provide reliable ongoing bookkeeping?
We charge an hourly rate to evaluate your books and fix the problems we find. Once we’ve developed an understanding of your business and goals we’ll establish a monthly fee for ongoing support.
Hiring a part-time or in-house bookkeeper without experience doing construction industry accounting may save you a few dollars in the short-term, but it won’t serve your long-term interests. A bookkeeper lacking the experience and insights to generate meaningful and accurate financial reports hurts your ability to understand which jobs were the most profitable, and how to grow your business.
How much should I pay for bookkeeping services?
Here is the question!….
Every business is unique. We look beyond the average cost of bookkeeping services and create a package with the greatest value for YOUR business.
The exact price varies, but the industry standard is to pay 1-3% of revenue for internal accounting functions and related support.
Example: if your total annual revenue is $1M, you’re looking at $10,000 to $30,000 per year, or a monthly rate of $800 to $2500.
Where your price falls in that range depends on whether or not you need payroll, bill pay, and sales tax. Other factors include unusually complex books, or special requests. That would push you up into the 3% range.
Straight bookkeeping, just the monthly package, is more in the 1% range. There are exceptions. We have some clients who pay a half percent of revenue, and some who pay more than 3% of revenue, but most fall in the 1-2% range.
One-time fee for cleaning up your books
There is also a “triage and repair” fee most clients encounter. The cost depends on the state of your books when we take them over. Most triage and repair fees fall in the $2,000 to $5000 range, which is spread out over the first 90 days. After cleaning up the books we fall into a standard monthly fee in the 1-2% of revenue range.
How do your rates compare to paying an in-house bookkeeper?
The most important variables are whether you need full time or part time bookkeeping and whether or not your bookkeeper is being hired as an office manager and administrator. Annual salary for full time bookkeepers who perform other office duties can range from $30,000 to $50,000 (plus taxes & plus benefits).
Many entrepreneurs will outsource their bookkeeping because of the technical nature of financial accounting. Hiring an individual bookkeeper or using a temporary placement service is common, but turnover can be detrimental to the integrity of financial statements. In addition, low cost, hourly bookkeepers often do not have the technical expertise to handle more sophisticated issues like sales tax filings and certain audit procedures.