Small business owners who do their own bookkeeping may pat themselves on the back for saving money, but sometimes they wonder if it’s worth it.
How much time spent on bookkeeping each month is too much before it makes more sense to just outsource it to professionals?
We often get asked the following questions by prospective clients:
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- How many hours per month does bookkeeping take?
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- What is the value of my time?
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- When is it better to outsource bookkeeping than to do it myself?
How Much Time Bookkeeping Takes
On average, small businesses that suit our client base usually take between 10-15 hours of bookkeeping each month. If they also handle their billing in-house, it can take up to 25 hours per month.
This doesn’t include any additional time that it would take to go back and fix errors, and it also doesn’t include the time it takes to handle your taxes.
We find that people with bookkeeping experience are more efficient, generally taking about 30 percent less time than someone who has less knowledge.
The Value of Business Owners’ Time
As a business owner, your time is worth a lot. This can be interpreted in a few different ways.
You still want to maintain personal time outside of work, which small business owners tend not to prioritize.
You also have a lot of value that you can add to your business if you spent your time in the right areas instead of accounting/bookkeeping. Do you ever think about how much you get paid for each hour of work? Holy cow… We DO!
When Outsourcing Bookkeeping Is Better
If you factor in your hourly pay rate and the number of hours that your bookkeeping takes you, is the number that comes out reasonable? Would you pay an bookkeeping service that much?
It’s time to outsource your bookkeeping when this formula is true:
The value per hour of your time * The number of hours spent on bookkeeping > The cost of a bookkeeping service
If we’re specifically using Eric Buchholz Bookkeeping in this equation, be sure to plug in our monthly accounting fee. It varies based on several factors, but it ranges from $350 to $850+ per month and averages $675 per month.
Keep in mind that it includes many things, such as:
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- Monthly financial statements and bank reconciliations
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- Year-round tax strategies
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- Annual 1099 filing’s (if you use contracted labor)
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- Unlimited one-off advice
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- and more!
If you’re still not sure about the value, we generally find that spending three to five hours per month on bookkeeping is the cap before it starts to become unreasonable, provided your business is ready to work with an bookkeeper.
Outsource Bookkeeping and Reclaim Your Valuable Time
Now that you know how long bookkeeping takes per month, what your time is worth, and how much time is too much time to spend on your bookkeeping, are you ready to check out monthly bookkeeping services?