How Much Does it Cost to Outsource Your CPA Firm’s Bookkeeping?

Outsourced bookkeeping services can cost your accounting firm up to $100 an hour or $500 to $5,000 per month. Several factors must be assessed when determining the cost of outsourcing your firm’s compliance tasks. While this might seem daunting or overwhelming, rest assured your potential outsourcing provider navigates these waters daily and would be proficient in making the process more straightforward and seamless.

Maintaining accurate and timely bookkeeping is a task that demands constant attention. As a CPA, your core focus should be on high-value, strategic tasks—navigating financial complexities, offering advisory services, and driving business growth. However, the routine yet essential responsibility of bookkeeping can often consume substantial time and resources. One of the critical decisions you might grapple with is whether to opt for outsourced bookkeeping services or keep them in-house.

Yet, as you consider this option, a crucial question emerges: “How much does it cost to outsource bookkeeping?”

The answer, while not straightforward, can be understood through a comprehensive examination of various factors and pricing models.

Understanding the Cost of Outsourced Bookkeeping Services

This requires a grasp of multiple variables. The cost is not a flat rate; instead, it fluctuates based on factors such as the complexity of your operations, the volume of transactions handled, and the size of your business. In other words, a small business with straightforward transactions will likely pay less than a large corporation with multiple subsidiaries and complex financial processes. Furthermore, the specific services you need—ranging from simple data entry to complete financial management—can significantly impact the overall cost.

The cost of outsourcing bookkeeping is influenced by several factors. These include your firm’s revenue, headcount, the specific services you desire, your industry, and the staffing method of your outsourcing provider. For example, a higher revenue often means more transactions, which would increase the workload and, consequently, the cost.

Similarly, the more employees you have, the more complex your payroll and human resources accounting may be. Your industry may also have specific accounting requirements—for instance, inventory-based accounting in e-commerce or job costing in professional services—that can affect the cost. Finally, the staffing method of the outsourcing firm can impact costs, with onshore teams typically costing more than offshore teams.

Understanding the true cost of outsourcing a CPA firm’s bookkeeping requirements involves careful consideration of various factors and pricing models. At QX Accounting Services, we work closely with you to understand your unique needs, providing a transparent and comprehensive breakdown of costs. Our goal is to offer you not just outsourced bookkeeping but a strategic partnership that enhances your financial efficiency and enables you to focus on your core competencies.

Pricing Models

When it comes to pricing models, the industry presents a couple of common options. Traditionally, outsourced bookkeeping services were charged on an hourly basis, typically falling within a range of $50-$100 per hour. However, many modern firms, including ours, have shifted towards a fixed monthly fee structure.

This approach offers greater predictability and ease of budgeting for clients. Under this model, you can expect to pay anywhere from $250 to $2,000 per month, depending on the complexity of your operations and the volume of transactions.

A broader industry survey suggested that small businesses might spend between $500 and $5,000 per month on outsourced accounting and bookkeeping. Interestingly, the cost can also be approximated as about 1% of your firm’s revenue as it nears $1M, with the percentage generally decreasing as revenue surpasses $3M.

Factors Influencing Cost of Outsourced Bookkeeping Services

Several factors will impact the cost of your outsourced bookkeeping, including your revenue, headcount, desired services, industry, and staffing method. A more comprehensive outsourced accounting solution may include services like running payroll, collections, processing payments, etc., which would alter the cost.

• Volume or Number of Transactions: A key determinant of the cost of outsourced bookkeeping services is the volume or number of transactions that need to be handled. As the complexity and number of transactions increase, so does the price​.
• Range of Services: The range of services required by the business can greatly influence the cost. Services could include general bookkeeping, vendor invoices, credit card transactions, bank/credit card reconciliations, payroll, customer invoices, customer payment processing, and collections. Naturally, more services equate to a higher cost.
• Revenue and Headcount: For certain industries, the revenue and headcount of a business can significantly impact the cost of outsourcing. The more revenue a business generates, the more work the accounting team will need to perform. Similarly, businesses that require a larger workforce may have more complex accounting needs.
• Industry: The industry a business operates can also influence the cost of outsourcing. Different industries have their unique accounting requirements, complexities, and needs. For instance, professional services need to understand job costing, while e-commerce businesses require inventory-based accounting.
• Staffing Method: The location and composition of your team can dictate your price. Outsourcing can be onshore, offshore, or a mix of both. Typically, an onshore team costs more than an offshore one, but a blended approach can provide the benefits of both while mitigating most concerns about offshoring. This is generally the most cost-effective solution.

Benefits of Outsourced Bookkeeping Services

Cost is just one side of the equation. It’s also essential to weigh the benefits of outsourcing your bookkeeping. Here are some reasons to outsource bookkeeping:

• Expertise and Efficiency: One of the primary advantages of outsourcing your bookkeeping is access to a team of accounting professionals who ensure your bookkeeping is correct and efficient. At QX Accounting Services, we offer a scalable solution that can adjust to your business needs as they change over time.
• Cost-effectiveness: Outsourcing is cost-effective because it saves both on rates and overhead. Without the need to hire internal employees to fulfill these functions, your costs go down.
• Time savings: Think about the many hours you could free up from your schedule. Delegating bookkeeping functions gives you the ability to dedicate those hours to executive functions instead.

Wrapping Up

While the cost of outsourced bookkeeping services can vary greatly, it’s crucial to look beyond the price tag and consider the significant benefits it can bring to your CPA firm. By partnering with a reputable bookkeeping outsourcing company like QX Accounting Services, you’ll have more time to focus on your core business functions and gain access to a team of experts equipped with the latest technologies and practices. Choosing the right bookkeeping outsourcing company is an investment in your business. It’s crucial to find a partner that fits your culture and understands your unique business needs.

Choosing the right outsourced bookkeeping services provider for your CPA firm isn’t a decision to be taken lightly. The right partner will be more than a vendor; they will be an integral part of your team, helping you to scale and succeed in your business efforts.

When it comes to cost and pricing models, it’s important to consider what works best for your firm’s needs and budget. The cost of outsourcing bookkeeping services can vary greatly based on the volume of transactions, the range of services required, your business’ revenue and headcount, the industry you’re in, and your staffing method. Understanding these factors and how they relate to your firm’s specific needs will be crucial in determining a budget that suits you.

Pricing models can also play a significant role in your decision. There are two common pricing methods: hourly rates and fixed monthly prices. Hourly rates, while traditional, can often lead to inefficiencies and surprise bills. On the other hand, fixed monthly prices can encourage efficiency and predictability in billing, making it easier to plan your finances. Most accounting teams tend to favor fixed monthly prices, but it’s important to determine which method aligns best with your firm’s financial and operational practices.

Finally, don’t simply view the cost of outsourcing as an expense. Instead, see it as an investment in your firm’s growth, efficiency, and overall success. When chosen wisely, an outsourced bookkeeping services provider can bring value far exceeding their cost by freeing up your time, reducing overheads, and providing expertise in areas you might not have in-house.

Remember, the right partner isn’t just a cost-effective choice but a strategic decision that can boost your firm’s efficiency, scalability, and success in the long run. Now that you’re armed with this information, it’s time to take the next step. Evaluate your firm’s needs, consider your budget, and start the search for the right outsourced bookkeeping services provider for your CPA firm. We’re sure that your search for the best bookkeeping services provider ends with us.

Are you ready to invest in your firm’s future?