Guide
There's a specific number of hours a month where doing your own books starts costing you more than paying someone else to do them. Here's how to find yours.
Most contractors decide whether to hire a bookkeeper on a gut feeling. That's the wrong way in. This is a maths problem, not a mood. You've got a recoverable hourly rate on the tools or running jobs, and a bookkeeper has a monthly fee. Once you know both numbers, the break-even point falls out automatically.
Break-even hours = monthly bookkeeping fee ÷ your recoverable hourly rate.
Your recoverable rate is what an hour of your time is actually worth when it's billed to a job, not your take-home wage divided by hours worked. If you don't know that number, run it through the hourly rate calculator first, because everything below depends on getting it right.
Worked example: a bookkeeper quotes $325 a month. Your recoverable rate is $85 an hour.
$325 ÷ $85 = 3.8 hours.
That's it. If your own bookkeeping — categorising expenses, reconciling the bank feed, chasing receipts, running payroll, prepping for the accountant — takes you longer than 3.8 hours a month, you are losing money by doing it yourself. Every hour past that point is an hour you could have spent on billable work worth more than what you're saving.
Nobody tracks bookkeeping time properly, which is exactly the problem. A quick scroll through bank transactions on a Sunday night feels like "twenty minutes." Add it up over a month — categorising receipts, matching invoices to payments, sorting out a mis-entered deposit, printing reports for the accountant at tax time — and it's usually two to five hours, done in scattered fifteen-minute blocks that never get logged anywhere.
Try this for one month: keep a simple tally sheet by the laptop. Every time you touch the books, write down the start and stop time. Most owners are shocked at the total. If you land at five or six hours against a $325 quote and an $85 rate, you're burning $170 to $255 a month in opportunity cost on top of the fee you're avoiding.
Bookkeeping fees scale with how much activity is running through the business, not with revenue directly. More transactions means more categorising, more reconciling, more chances for something to slip through. Here's roughly what the market looks like for a service-based contracting business:
| Monthly transaction volume | Typical monthly fee | What's usually included |
|---|---|---|
| Under 100 transactions | $150 – $300 | Bank reconciliation, categorisation, basic monthly report |
| 100 – 300 transactions | $300 – $550 | Above plus AP/AR tracking, sales tax prep, cleaner books for tax time |
| 300+ transactions, with payroll and job costing | $550 – $1,100 | Payroll processing, job-costed reports by project, more frequent check-ins |
Where you sit on that table depends on crew size, how many suppliers you buy from, and whether you're running payroll through the bookkeeper or a separate service. A one-truck operation with a handful of recurring suppliers sits at the low end. A crew of six with payroll, multiple job sites and material accounts at three suppliers is firmly in the top band.
The break-even calculation above only counts your time. It doesn't count the cost of mistakes, and mistakes are where DIY bookkeeping actually bites. Three show up again and again in contracting businesses:
Do this in three steps:
If your real time is below break-even, keep doing it yourself, but keep tracking, because transaction volume creeps up as the business grows. If it's above, hiring out isn't a luxury. It's the cheaper option.
There are cases where hiring makes sense even under the break-even line. If you're consistently late on filings, if you genuinely don't know which jobs are profitable, or if a bank reconciliation error has already cost you real money once, that's a sign the risk side of the equation matters more than the time side. A bookkeeper isn't just buying back your hours. They're buying down the chance of an expensive mistake.
For a wider view of what to hand off versus keep in-house as a contracting business grows, the small business operations kit covers the same trade-off across other back-office tasks, not just bookkeeping.
The Small Business Operations Kit ($19) turns guides like this one into fill-in-once worksheets: rate card, quoting sheet, job costing, payment terms and follow-up templates.