How long does bookkeeping take for a small business?

As a small business owner, you know that bookkeeping is an essential task for tracking your financial transactions and keeping your finances organized. 

But you might be wondering how long it takes and whether it’s something you can handle on your own or if you need to hire someone to do it for you. 

In this article, we’ll explore how long bookkeeping takes and provide tips and strategies for making the process as efficient as possible.

How long does bookkeeping take for a small business?

Bookkeeping typically takes a few hours per month to several hours per week. 

A small business with just a few monthly transactions will likely have a much easier and quicker process than a larger business with dozens or hundreds of transactions. 

How many hours a month does bookkeeping take?

Generally, an average small business takes around 10 to 30 hours per month to keep its books. However, it can take as long as 15–25 hours per week.

The amount of time required for bookkeeping can vary depending on several factors. 

These factors include the size of the business, the number of transactions, the complexity of the company, and the accounting method used.

Let’s take a closer look below!

Simple and Straightforward Transactions

For a company with a limited number of transactions and a straightforward financial structure, basic bookkeeping can take a few hours per month. 

This includes recording financial transactions, reconciling bank statements, and preparing basic financial reports.

Complexed Accounting

However, for a business with a larger number of transactions or a more complex financial structure, bookkeeping can take several hours per week or even more. 

This may involve more advanced tasks such as preparing budgets, forecasting, adjusting journal entries, sales tax, and analyzing financial data.

It’s also important to note that bookkeeping is not a one-time process but an ongoing task that requires regular attention and maintenance. 

Therefore, it’s important to set aside a regular time each week or month to keep the books up-to-date.

How to estimate the time spent on bookkeeping?

As mentioned previously, bookkeeping is an ongoing process, and the time required may vary monthly. 

Estimating the time spent on bookkeeping can help you plan and budget accordingly. 

Let’s dive into a few ways to gauge the time spent completing a month’s bookkeeping.

Track time

One way to get a sense of how long bookkeeping will take for your small business is to track how much time you spend on bookkeeping tasks each week. 

This will give you a base to work from and help you identify areas where you can streamline your process. 

For example, if you spend a lot of time manually entering data into your bookkeeping software, you might consider switching to a system that allows you to import data directly from your bank statements or other financial documents.

Bookkeeping Frequency

Another factor that can impact the amount of time you spend on bookkeeping is the frequency with which you do it. 

Some business owners prefer to do their bookkeeping either daily, weekly, monthly, or on a quarterly basis. There’s no right or wrong answer here – it’s simply a matter of what works best for your business. 

However, keep in mind that if you let the work pile up, the time to complete the task will be longer.

How to be efficient with bookkeeping?

One way to make the bookkeeping process more efficient is to use accounting software. 

There are various options available, ranging from simple spreadsheet-based systems to more robust software packages with features such as tracking cash flow, accounts receivable, and payroll. 

Some of the benefits of using accounting software include:

• Automation: Many bookkeeping software programs allow you to automate tasks like data entry, which can save a significant amount of time.
• Accuracy: By using a software to record your financial transactions, you can reduce the risk of errors and ensure that your records are accurate and up-to-date.
• Reporting: Many bookkeeping software programs come with built-in reporting tools that can help you track your finances and understand the health of your business. You can generate financial statements such as the balance sheet, income statement, and cash flow statement.

Of course, there are also downsides to using bookkeeping software, including the learning curve involved in getting started.

Outsource bookkeeping

Another option for small businesses is to hire a bookkeeper or accountant to handle their bookkeeping tasks. 

This can be a good option if you don’t have the time or expertise to be hands on and prefer to focus on other aspects of your business. 

The cost of hiring a bookkeeper or a certified public accountant will depend on the complexity of your financial situation and the extent of the bookkeeping work that needs to be done. 

However, many small business owners find that the time and energy saved by hiring a professional with an accounting or bookkeeping business is well worth the investment.

Tips on making the best use of time to focus on making more money.

To further optimize the bookkeeping process, it’s important to stay organized and focused. 

Here are a few tips to help you make your record-keeping tasks as efficient as possible:

• Set aside a specific time each week or month. By establishing a routine, you’ll be more likely to stay on track and avoid falling behind.
• Gather all of your financial documents in one place. This will make finding the information you need easier and avoid wasting time searching for documents.
• Use a bookkeeping app, software, or template to help you stay organized. This can be especially helpful if you’re just starting or switching to a new system.
• Choose the correct accounting method. There are two main accounting methods; cash and accrual method. 
• Consider automating tasks like data entry or receipt scanning. There are a variety of tools available that can help you streamline your workflow and save time.
• Keep your business and personal finances separate. Whether you’re paying bills, small business taxes, or fees, make sure you use the correct bank accounts to make those payments. 

How to manage bookkeeping in 4 steps

Set up a system: 

The first step in managing your record-keeping is to set up a system that works for you and your business. 

This could be as simple as using a spreadsheet to track your financial transactions or as complex as using specialized software. 

Whatever system you choose, make sure it’s something you’re comfortable using.

Stay organized: 

To manage your bookkeeping effectively, it’s important to stay organized. 

This means keeping your financial documents in one place, such as in a file cabinet or online storage system. 

It’s also a good idea to establish a regular routine, such as setting aside time each week or month to review and update your financial records.

Record transactions accurately: 

Accurate record-keeping is essential for managing your bookkeeping effectively. 

This means taking the time to record your financial transactions correctly, including invoices, receipts, expenses, and bank statements. 

By keeping accurate records, you’ll be able to track your profits and losses, make informed business decisions, and prepare for tax time.

Review and reconcile your records: 

Finally, it’s important to regularly review and reconcile your financial records. 

This means comparing your records to your bank statements and other financial documents to make sure everything is accurate and up-to-date. 

By regularly reviewing and reconciling your records, you’ll be able to catch any errors or discrepancies and ensure that your bookkeeping is accurate and complete.

By following these four steps, you can effectively manage your workflow and keep your finances organized and up-to-date. 

With a little effort and attention to detail, you can ensure that your books are accurate and efficient, which will help you make better business decisions and focus on growing your business.

Conclusion

In conclusion, the amount of time it takes to do bookkeeping for a small business will depend on various factors, including the size of your business, the complexity of your financial transactions, and the frequency. 

By using a software, hiring a professional, and staying organized, you can make the process as efficient as possible and focus on growing your business. 

Don’t be afraid to seek help if you need it – a bookkeeper or accountant can provide valuable support and guidance as you work to keep your finances organized and up-to-date. 

So, it’s important to set aside the time and resources to keep your business running smoothly.