How much does monthly bookkeeping cost in Ontario?

It is the first question most owners ask, and it is a fair one. The difficulty is that “bookkeeping” covers everything from entering a handful of receipts to running a full monthly close with payroll, HST, inventory and management reports. Two businesses with the same revenue can need very different amounts of work.

So rather than publish a number that would be wrong for most readers, this guide explains what drives the cost, how firms usually price it, and how to tell whether two quotes describe the same job. We do not publish prices. We scope each engagement and quote it in writing.

Why there is no single honest number

Monthly bookkeeping

Monthly bookkeeping is the recurring work of recording a business's transactions, reconciling its bank and credit card accounts, and keeping receivables, payables and supporting records current so the books are accurate at each month-end.

Any price quoted without seeing your books is a guess. A quote is only meaningful once the provider knows how many transactions you have, how many accounts they must reconcile, what payroll and tax filings are involved, and what condition the books are in today.

The output matters as much as the input. Some providers record transactions and stop there. Others deliver reconciled accounts, accrual adjustments and a month-end package your accountant can rely on at year-end. Those are different services, even if both are called bookkeeping.

Be cautious of anyone who gives a firm figure on the first call. Either they are pricing a narrow scope you have not seen yet, or they will revise it once the real work appears.

The eight drivers of bookkeeping cost

These are the factors we look at when we scope an engagement. Each one adds or removes work every month.

1. Transaction volume. Every sale, purchase, deposit and payment must be recorded and matched. More transactions mean more work, though good bank feeds and rules reduce the effort per transaction.
2. Number of accounts. Each bank account, credit card, line of credit, loan and payment processor needs its own monthly reconciliation. Several cards for several employees add up.
3. Payroll. Running payroll, remitting CPP, EI and income tax deductions, handling vacation pay and preparing T4s at year-end is a distinct body of work. Headcount, pay frequency and the mix of salaried and hourly staff all matter.
4. Sales tax. In Ontario, HST is 13% on most taxable supplies. Preparing returns, tracking input tax credits and handling sales into other provinces all add work, as does filing monthly or quarterly rather than annually.
5. Inventory. Businesses that hold stock need cost of goods sold recorded properly, inventory counts reconciled to the books, and sometimes job or project costing.
6. Catch-up or clean-up work. Books that are behind, or were kept inconsistently, need one-time work before monthly bookkeeping can run normally.
7. Software and integrations. Well-configured accounting software with bank feeds and connected apps reduces manual work. Paper records, spreadsheets and disconnected systems increase it.
8. Reporting frequency and depth. A basic monthly reconciliation is different from a month-end close package with financial statements, aged receivables, variance commentary and KPI reporting.

Catch-up and clean-up

Catch-up bookkeeping brings books that are months behind up to date. Clean-up bookkeeping corrects books that are current but wrong, such as miscategorized transactions, unreconciled accounts or duplicate entries.

The state of your records is often the biggest single variable. Clean, current books with organized receipts cost less to maintain than books that need investigation every month.

Some of these drivers are within your control. Fewer bank and card accounts, receipts captured at the time of purchase, consistent customer and supplier names, and bank feeds connected to your accounting software all reduce the work each month. Others, such as payroll headcount or HST filing frequency, follow from how the business operates and are simply part of the scope.

Business structure matters too. A corporation with shareholder loans, related companies or intercompany transactions needs more care each month than a single-entity business with one bank account. So does a business with several revenue streams that must be tracked separately for margin reporting.

Common pricing models, and their trade-offs

Bookkeeping in Ontario is usually priced in one of three ways. None is right for everyone.

Catch-up and clean-up work is usually quoted separately as a one-time project, because it is a different kind of work from ongoing monthly bookkeeping. Year-end financial statements and corporate tax returns are also commonly quoted on their own.

We generally prefer a fixed scope quoted in writing, because owners can budget for it and both sides know exactly what is included.

What saves money now and costs more later

The lowest monthly figure is not the lowest total cost. These are the patterns we see most often when we take over a set of books.

• Data entry without reconciliation. Transactions are recorded, but bank and card balances are never proven. Errors build up until year-end.
• Everything coded to a few accounts. Expenses land in “general” or “miscellaneous”, so the books cannot tell you where money goes.
• No accrual adjustments. Revenue and costs are recorded only when cash moves, so monthly profit swings and margins are misleading.
• HST filed from rough figures. Returns that do not reconcile to the books create exposure if the CRA reviews them.
• Payroll remittances missed or late. Late source deduction remittances can attract penalties and interest.
• Year-end left to the accountant. If the accountant has to rebuild the books before preparing statements, you pay for the work twice.

Books kept to a standard your accountant does not have to redo are almost always less expensive over a full year than books that need fixing at year-end.

If you are unsure who should be doing which part of this work, our guide to bookkeeper vs CPA vs controller sets out the roles.

How to compare bookkeeping quotes like-for-like

Two quotes are only comparable if they describe the same job. Use these steps before deciding.

1. Give every provider the same factsShare the same information with each: number of bank and card accounts, approximate monthly transactions, payroll headcount and frequency, HST filing frequency, inventory, and the current state of the books.
2. Ask for the scope in writingA quote should list each task: entry, reconciliations, receivables, payables, payroll, HST, month-end adjustments and reports.
3. Check the standard of the closeAsk whether every account is reconciled monthly and whether accrual adjustments are made. Ask to see a sample month-end package.
4. Confirm what is excludedCatch-up work, year-end statements, corporate tax returns, CRA correspondence and advisory time are often outside the monthly fee.
5. Ask what changes the priceFind out how growth in volume, new accounts or added staff will be handled, and whether changes are agreed in writing first.
6. Ask who does the workFind out whether the person you meet is the person doing your books, and who reviews the work.
7. Compare the full-year costAdd the monthly fee, any one-time clean-up, year-end and filing work to see what a full year actually costs.

What our written quote includes

We scope each engagement before we price it. Our written quote sets out:

• The monthly tasks we will perform, listed individually.
• Which accounts we reconcile each month.
• Payroll and HST work, if included, and the filing frequency.
• The contents of your month-end package and when you receive it in the cycle.
• Any one-time catch-up or clean-up work, quoted separately.
• What is excluded, so there are no surprises.
• What would change the fee, and how changes are agreed in writing.
• Who does the work: a partner, with no junior hand-offs.

You can read more about how we run monthly books and close packages on our bookkeeping services page.

The short answer

Monthly bookkeeping in Ontario costs what your books require. Lower transaction volumes, fewer accounts, organized records and well-configured software reduce the cost. Payroll, HST, inventory, clean-up work and detailed reporting increase it. The right comparison is scope against scope, not number against number.

If you would like a scoped, written quote for your own books, request a consultation.

Questions

This guide is general information for Ontario businesses, not advice for your situation. Rules change; talk to us before acting on it.