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What does a good bookkeeper cost?

20 posts by 15 users

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John Blackman

Real Estate Investor from Austin, Texas

Feb 04 '13, 09:12 PM


So I've got a problem and thought the great minds on this site could help me out with my bookkeeping issue.

Our business is starting to grow to the point that keeping the books is taking more time than I want to spend on it. This year we'll be doing more than double the number of projects we did last year which is going to break me with the bookkeeping. So I went out and started looking into hiring one.

My accountant and other builders in the area all had recommendations for bookkeepers, but they all charge $100/ hour. I even found one that charges only $60/ hour. I don't like to think of myself as excessively cheap. I am willing to pay people what their skills are worth. The level of bookkeeping I'm looking for includes making an accurate QuickBooks entry and scanning a receipt to put in a dropbox folder. I'm not looking for a CPA who is going to structure my entities and give me tax advice.

What is a reasonable amount to pay a good bookkeeper? $100/hour is $200,000 a year, more than most executive incomes. I find that rather disturbing as it doesn't strike me as a skill that requires specialized education like a CPA, Lawyer, or engineer. Is bookkeeping so traumatic that no one will do it and you just have to pay that much?

Does anyone have a bookkeeper that charges by the transaction instead of the hour?



Medium_inner10_logo__updated_John Blackman, Inner 10 Capital
E-Mail: [email protected]
Website: http://www.inner10capital.com/invest/
Our Recent Austin Business Journal Article - http://tinyurl.com/Inner10Capital


This post has been removed.

Will Barnard Moderator Donor

Real Estate Investor from Santa Clarita, California

Feb 04 '13, 09:26 PM


Originally posted by Steven Hamilton II:
John Blackman,
Shoot me a message and I'll give your some tips for finding a decent bookkeeper.
Why not post in this thread and share with us all?

I hire my CPA's assistant who comes in once (soon to be more) a month and does this stuff for me. I handle some of it in between like cutting checks when needed and making some quickbook entries. It usually costs me $200 a month for the one visit and she spends about 4 hours in my office. That amounts to $50 an hour and I am fine with that.



Medium_be_logoWill Barnard, Barnard Enterprises, Inc.
E-Mail: [email protected]
Website: http://www.barnardenterprises.com
http://www.InvestorExperts.com


Steven Hamilton II Verified Moderator

Real Estate Investor from Lake Villa, Illinois

Feb 04 '13, 09:37 PM


@Will Barnard,

I didn't want to publicly broadcast what my firm charges.

That said: You can try finding one from craigslist that has reliable references. Ask your Accountant if he has a recommendation. Find a family member who knows basic bookkeeping or who can learn.

Ask around at some small businesses.

-Steven



Medium_hta_logoSteven Hamilton II, Hamilton Tax and Accounting
E-Mail: [email protected]
Telephone: (224) 381-2660
Website: http://www.HamiltonTax.Net
-Steven the Tax Guy Hamilton Tax and Accounting LLC (224) 381-2660


John Mireles

Landlord from San Diego, California

Feb 04 '13, 09:39 PM
1 vote


There's a big difference in pay between a front office data entry employee and a freelance bookkeeper. Most businesses only need a freelance bookkeeper a few hours a week so even if you're paying $100 an hour, it's nowhere near the $200k annual salary you mentioned.

Don't underestimate the value of skilled, diligent bookkeeper. Bookkeeping may seem easy, but wait until you have one make a mess of your books. It can cause troubles for years.



John Blackman

Real Estate Investor from Austin, Texas

Feb 04 '13, 09:43 PM


Thanks everyone for the quick responses.

@Will Barnard, how many transactions do you have in your books after a month? This seems like the perfect metric to use to determine the value of your bookkeeper. Our projects are usually 16-20 weeks in duration and have on average of 200 to 300 transactions for the whole project that need to be categorized.

According to the BLS, it's $16.36/hr on average. http://www.bls.gov/ooh/office-and-administrative-support/bookkeeping-accounting-and-auditing-clerks.htm


Edited Feb 4 2013, 21:54 by John Blackman


Medium_inner10_logo__updated_John Blackman, Inner 10 Capital
E-Mail: [email protected]
Website: http://www.inner10capital.com/invest/
Our Recent Austin Business Journal Article - http://tinyurl.com/Inner10Capital


William Bannister

Commercial Landlord from Oshkosh, Wisconsin

Feb 04 '13, 10:00 PM


One of my property managers does book work for me once per month has helped me out a lot I just pay her what her hourly rate is with over time. She is salary at less then 40k per year with a free vehicle.
Of course you have to have income property to be able to do this and she is not a cpa. How ever most "good" property managers understand how taxes work in regards to real estate. The documents and receipts she puts together for the cpa firm that send out k-1's to partners have never been problematic.
Can you pay a part time employee to organize documents then have cpa firm handle it from there? Just a thought to reduce the 50 to 200 dollar per hour labor we are speaking of.
If you can find someone for 17 to 20 per hour that is good, thats worth it in my opinion.



John Blackman

Real Estate Investor from Austin, Texas

Feb 04 '13, 10:05 PM


@William Bannister that is my plan. I don't need a full time bookkeeper and need an intermediary solution that doesn't cost $100/hour. Your experience will certainly give me some context so I don't pay too much. Thanks.



Medium_inner10_logo__updated_John Blackman, Inner 10 Capital
E-Mail: [email protected]
Website: http://www.inner10capital.com/invest/
Our Recent Austin Business Journal Article - http://tinyurl.com/Inner10Capital


Joe B.

Real Estate Investor from Sacramento, California

Feb 04 '13, 11:02 PM
1 vote


In Northern CA you can find good freelance bookkeepers for $25-30 per hour. You need to look around a bit more.



Jonathan Wolter

San Francisco, California

Feb 05 '13, 02:29 AM


There are several virtual bookkeeping services out there. We're using one for two condo development projects and the active partner involved there is happy with them. First I was a bit skeptical, but the accountant looks over transactions periodically and the company is reputable. You can search online for one with your particular type of investing expertise, or maybe another colleague is using one.

Cheers!



Ted Akers

Private Money Lender from Denver, Colorado

Feb 05 '13, 03:19 AM


I think you want someone local to you that can work from your location. I posted to Craigslist a year ago and recieved around 25 resumes within a week in Denver. I may have gotten lucky but have a good one at $20.00/hr. I did not post an hourly rate, but at that time I had several willing to work in the $15-25/hr. range. My cashflows for fundings are not simple bookkeeping, and I did go through two before settling with this one. For real estate or funding businesses I think you want an above average bookkeeper; so depending on your local market may want to pay above these prices, but $60-100/hour is not necessary.



Jon Klaus Moderator Donor

Real Estate Investor from Garland, Texas

Feb 05 '13, 03:44 AM
1 vote


John, check out bookkeeper zoo. http://www.bookkeeperzoo.com/pricing

I haven't used them, but the model looks intriguing.



Jon Klaus, SellPropertyFast
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Telephone: 214-929-6545
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George P.

Real Estate Investor from ..., Michigan

Feb 05 '13, 06:18 AM


you are next to one of the biggest universities in the US (even the world). why dont you go to UT and post some fliers for students to apply? talk to some professors to see what they;d recommend?

having said that, paying more than $20/hr for this stuff is ridiculous. he is not looking for tax advice. he is looking for an organized person that can do the same task for a few hrs a week/month.

how much would a firm pay that kind of person? more than 25-30k/year? i dont think so.



Pat L.

Real Estate Investor from New York

Feb 05 '13, 06:39 AM


WOW $$$$$

Our 'new guy' does my wife's S-Corp payroll etc for $21 a month, big reduction from Paychex. We had always done our own books but we are going to get the new guy to do it as it's getting to be too time consuming. The cost initially quoted was no more than$75 a month.

The tax returns etc he did for all corps & family members were so reasonable I can't remember the costs. But combined the cost didn't exceed the 'previous accountants' cost of doing one S-Corp return that was 5 months late, with the extension charged to us.

The amazing thing is the 'previous accountant' charges seminar fees for idiots to listen to her tax advice, but she couldn't get her staff of 9 data entry people to get it right ever !!! & in a face to face meeting kept denying our 179 write-offs that were absolutely valid.
She lasted that one year but had come highly recommended by other RE Investors & was NOT taking on more clients as she was too busy????.
Needless to say in 30 years we have been through a lot of accountants, bank managers & attorney's.

Retired from 9-5 at an early age I always did my own books & did the tax returns for all LLC's etc.
However, after THAT 3 day IRS audit, I somewhat survived, the wife insists I go to her accountant from now on to relieve her stress.

Doing your books monthly gives you a wake up call to financial issues that many let slide & I personally want to stay in tune with the intricacies of RE investment tax issues. The offshore ones are even more challenging !!!



Michael Q.

Real Estate Investor from Bakersfield, California

Feb 05 '13, 06:41 AM
1 vote


Remember the saying. " You get what you pay for".

I learned a long time ago that a great bookkeeper / tax account who manages both my ledger and my stradegy is worth every cent. There's too much at risk to cheap out on bookkeeping.



Medium_new_logo_bMichael Q., Yellow Letters
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John Blackman

Real Estate Investor from Austin, Texas

Feb 05 '13, 07:08 AM


Thanks for all of your recommendations everyone. I think we'll end up using a hybrid of providers. I'm convinced now that what I need for our bookkeeping is not anything that complicated. We still have our CPAs to do the heavy lifting, but right now we just need someone to scan receipts and make QB entries with the right price codes.



Medium_inner10_logo__updated_John Blackman, Inner 10 Capital
E-Mail: [email protected]
Website: http://www.inner10capital.com/invest/
Our Recent Austin Business Journal Article - http://tinyurl.com/Inner10Capital


Kenji Kuramoto

Atlanta, Georgia

Feb 05 '13, 11:18 AM
1 vote


John (and others),
While not a regular poster to this site, I came across this discussion and thought I'd weigh in on John's question about the costs of bookkeeping, since this is an area I have experience in. That said, I have to disclaim that I run a firm that provides entrepreneurs access to flexible accounting resources....including bookkeeping services.

So, in response to John's comments:
1. $100/hr for bookkeeping is far too high. So is $60/hr. I'm hoping that your accountant and other builders may have thought you needed something more than just bookkeeping and maybe more like a Controller. A Controller is performing a more sophisticated role that often requires a strong understanding of Generally Accepted Accounting Principals, uses high-level financial reporting and analytical skills, and often complex accounting systems.
2. You're correct that bookkeeping is not a highly technical nor specialized function. In fact, it's more akin to data entry. So you should not pay equivalent rates like you would to a CPA, attorney, or another professional with deep technical experience.

A few of additional thoughts and opinions (for what it's worth):
1. There is huge volatility in the quality level of bookkeepers. Because most bookkeepers are self-employed or contractors there are hidden gems and then there are some real stinkers. Make sure you perform solid due-diligence on these individuals as they'll often have access to all of your business assets (bank accounts, credit cards, etc) and the instances of fraud in small businesses occur far more frequently than the large company scandals that we read about on the pages of the Wall Street Journal.
2. Because the question about costs was framed up in a rate per hour context, I'll initially respond that I'd seek to be paying around $20 - $40/hour for bookkeeping. That said, when you're paying for a largely transactional/data entry role, I believe an hourly rate model has misaligned incentives. That bookkeeper will not be incented to work efficiently or use automation tools if they can make more income by being slower and more manual. I think bookkeeping can be done on a fixed price basis.
3. This view will likely make me unpopular with some people posting here, but I do not think your tax preparer should also be your bookkeeper. Tax preparation, planning, and strategy is a specialized skill that requires technical expertise and, therefore, you should be prepared to pay more than you would for bookkeeping. Not only that, your books should be accounted for with an eye toward producing financial information for you as the owner, your investors, or your lenders...and not just to make filing tax returns easiest for your CPA.

Thanks for letting me post here and I hope that my comments may prove helpful to some of you. Also, thanks for being patient with my long post....I'm passionate about helping entrepreneurs with their accounting function so I can get a bit carried away! :)


Edited Feb 5 2013, 19:44 by Administrator: Ad removed. Please post ads in the marketplace only.


Steven Hamilton II Verified Moderator

Real Estate Investor from Lake Villa, Illinois

Feb 05 '13, 11:23 AM


Do not be cheap on bookkeeping that determines the information to your accountant to prepare your tax return. Bad bookkeeping can be a nightmare to deal with later on.



Medium_hta_logoSteven Hamilton II, Hamilton Tax and Accounting
E-Mail: [email protected]
Telephone: (224) 381-2660
Website: http://www.HamiltonTax.Net
-Steven the Tax Guy Hamilton Tax and Accounting LLC (224) 381-2660


Joshua Dorkin Verified Donor

BiggerPockets Founder from Denver, Colorado

Feb 05 '13, 07:47 PM
1 vote


Folks - I've had to remove and edit several posts in this thread. Please note -- you may NOT recommend your own services in ANY discussion thread here on the site. The only place appropriate to do that here is in our Marketplace.

It is wholly inappropriate to take a thread asking for advice and trying to sell your services in it -- that's called hijacking and is prohibited here. Don't do it.

Back to the OP's post now . . .



Medium_bp-squareJoshua Dorkin, BiggerPockets
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Emily Dixon

Virtual Assistant from Anaheim, California

Mar 04 '13, 12:55 PM


I am in expensive southern california and you CAN find a GOOD bookkeeper for $25/hour. Put an ad out. Check references. Also require experience bookkeeping in same industry to avoid having to spend hours explaining how your business works.

Take the number of hours you have been spending on bookkeeping and divide that by 2. This should give you the number of hours a skilled bookkeeper will take to do your books. If they take longer then that- Kick them to the curb and move on!!!!



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