The honest answer: it depends, but not on chance. The price of bookkeeping is based on a few factors that you can easily assess yourself. Here, we’ll show you what those factors are, how tax advisors and bookkeeping firms bill, and how to compare quotes fairly.
How tax advisors bill
Tax advisors bill under the German fee regulation for tax advisors, StBVV for short. For ongoing bookkeeping, § 33 StBVV provides for a monthly fee based on annual revenue or total expenses, whichever is higher, set within a fixed range. For payroll, § 34 StBVV sets a fee per employee and pay period, also within a range.
Exactly where within that range a tax advisor sets their fee depends on the scope and complexity of the work. In addition, tax advisors can enter into a fee agreement with you, such as a monthly flat rate. This is common in practice because it allows both parties to plan accordingly.
On top of this, tax advisors charge fees for annual financial statements and tax returns. If the tax advisor does the bookkeeping themselves, the advance VAT return is covered by the bookkeeping fee under § 33(8) StBVV. If a bookkeeping firm handles the ongoing bookkeeping, the tax advisor bills the advance VAT return separately. Annual financial statements and tax returns are needed in any case.
How bookkeeping firms bill
Bookkeeping firms are not bound by any fee regulation and set their prices freely. Monthly flat fees based on the expected workload are common, sometimes also prices per posting or per receipt. For special tasks, such as catch-up bookkeeping or setting up digital processes, there are fixed prices or hourly rates.
At GKM, we price ongoing bookkeeping and payroll individually: after a short questionnaire, you receive a fixed monthly quote. More on the Pricing page.
Important for comparing: A bookkeeping firm does not fully replace the tax advisor. So always add bookkeeping and tax advisor costs together when you compare quotes. The article Bookkeeping firm or tax advisor explains why.
These factors determine the price
Whether a provider bills under a fee regulation or sets its own prices, the workload almost always depends on the same factors. Knowing these factors allows you to better evaluate a quote.
- Number of postings: How many bank transactions, invoices, and cash register entries occur each month?
- Payment methods: every account, payment service, and marketplace must be reconciled
- Receipt quality: Are the receipts complete and in digital form, or do they need to be tracked down and requested?
- Profit determination: with a balance sheet, open items are tracked; with a cash-basis income statement, they usually are not
- Reports: cost centers, projects, or branches make the books more informative but also more work
- International transactions: foreign currencies, shipments abroad, and imports require greater care
- Industry specifics: cash register records in retail, construction services, used cars, or marketplace settlements
- Payroll: number of employees, hires and leavers, collective agreements, premiums, and mini-jobs
- Backlogs: open months or years are brought up to date separately
Two companies with the same revenue can therefore have very different pricing. A consultant with twenty invoices a month requires less work than an online retailer with the same revenue but thousands of orders and five payment service providers.
A practical tip: For a typical month, count your bank transactions, your incoming and outgoing invoices, and your payment methods. With these three figures, you’ll receive a reliable quote from almost any provider, and you’ll be able to compare the quotes.
What payroll costs
Payroll is almost always billed per employee per month. The base price covers the payroll run, notifications to the health insurance funds, contribution statements, and the wage tax return. However, the actual amount of work depends less on the number of employees than on the type of employment.
- Hires and leavers: every registration and deregistration requires documents and checks, especially with high staff turnover
- Fluctuating hours: hourly wages based on timesheets require more work than fixed salaries
- Collective agreements and premiums: wage groups, night and Sunday premiums, or industry funds such as those in construction
- Mini-jobs and short-term employment: earnings limits and time limits must be monitored continuously
- Benefits in kind: company cars, commuter passes, or vouchers are calculated separately
- Certificates: employment certificates, earnings certificates, or wage garnishments add to the workload
At GKM, your quote states the price of payroll per employee per month. It also states what the price includes, so you know exactly what to expect. More on the Payroll page.
What should be included in the price
A reputable quote for ongoing bookkeeping describes exactly what you’re getting. In our view, these services should be included in every monthly flat fee:
- Posting all receipts and bank transactions for the month
- Reconciliation of bank accounts, cash on hand, and payment services
- A list of missing receipts, so you know exactly what to send
- Monthly report with results and a comparison to the previous year
- Delivery of the data to the tax advisor in the appropriate format
Also ask what is not included. Typical additional costs include adding and removing employees from payroll, special reports, certificates for government agencies, or processing months that predate the start of the contract.
The hidden costs of cheap bookkeeping
The lowest price isn’t always the cheapest option. If your ongoing bookkeeping has gaps, you’ll pay the difference later: the tax advisor takes longer to prepare the annual financial statements and bills you for it. VAT errors lead to back payments with interest. And without reliable monthly reports, you’ll spot cash flow problems too late.
Deadlines matter too. If an advance VAT return is filed late, the tax office can impose a late-filing penalty; if the tax is paid late, late-payment penalties apply. This is rarely due to a lack of money; usually it is because the month’s bookkeeping wasn’t finished on time.
Your own time also has a cost. If you spend your evenings sorting receipts, reconciling bank statements, and answering queries, you’re not available for business during the day. Ideally, well-organized bookkeeping takes you just a few minutes a month: upload receipts, answer any accumulated queries, and review the report.
Do it yourself, software, or a bookkeeping firm?
If you are a founder with few receipts, it can make sense to do the bookkeeping yourself with software at first. The programs are affordable, guide you through day-to-day tasks, and transfer the data to your tax advisor. The comparison DATEV, Lexware Office, or sevdesk shows what solutions are available.
As your business grows, the math changes. More receipts, employees, payment methods, or international transactions take time and increase the risk of errors. Once you regularly spend more than a few hours a month on bookkeeping, or your tax advisor has to do a lot of rework for the annual financial statements, it’s worth comparing costs with a bookkeeping firm.
A middle ground is possible: you continue to write your invoices in your own software, and the bookkeeping firm handles posting, reconciliation, and reports.
How to compare quotes
Use these questions to compare quotes on an equal footing:
- Total cost: How much do bookkeeping and the tax advisor cost together per year?
- Scope of services: What exactly is included in the flat fee, and what costs extra?
- Deadlines: By when is the month posted so that the advance VAT return can be filed on time?
- Price adjustment: When and how does the price change as the business grows?
- Term and cancellation: How long is your commitment, and how will data be handed over if you switch providers?
- Availability: Do you have a dedicated contact person, and in which language?
At GKM, you receive a written quote with a fixed monthly price after a short questionnaire. If you don’t have a tax advisor yet, we can name one we work with on request; they send you their own quote. Request a quote.
Sources
Laws and bodies named in the article. The legal texts link to gesetze-im-internet.de, in German.
This article is for general informational purposes only and does not constitute tax or legal advice in specific cases. A tax advisor is responsible for tax-related questions.