Small business owners who do their own accounting may pat themselves on the back for saving money, but sometimes they wonder if it’s worth it.
How much time spent on accounting each month is too much before it makes more sense to just outsource it to professionals?
CSI Accounting & Payroll has done monthly accounting for small businesses for over 50 years, and we often get asked the following questions by prospective clients:
- How many hours per month does accounting take?
- What is the value of my time?
- When is it better to outsource accounting than to do it myself?
How Much Time Accounting 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. Do you ever think about how much you get paid for each hour of work?
When Outsourcing Accounting Is Better
If you factor in your hourly pay rate and the number of hours that accounting takes you, is the number that comes out reasonable? Would you pay an accounting service that much?
It’s time to outsource your accounting when this formula is true:
The value per hour of your time * The number of hours spent on accounting > The cost of an accounting service
If we’re specifically using CSI in this equation, be sure to plug in our monthly accounting fee. It varies based on several factors, but it ranges from $500 to $1,000+ per month and averages $675 per month.
Keep in mind that it includes many things, such as:
- Monthly financial statements and bank reconciliations
- Year-round tax strategy
- Annual tax preparation and filing
- Unlimited one-off advice
- and more!
If you’re still not sure about the value, we generally find that spending three to five hours per month on accounting is the cap before it starts to become unreasonable, provided your business is ready to work with an accountant.
Outsource Accounting and Reclaim Your Valuable Time
Now that you know how long accounting takes per month, what your time is worth, and how much time is too much time to spend on your accounting, are you ready to check out monthly accounting services?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with CSI by clicking the image below:
