Why S-Corp Bookkeeping Costs More
An S-corp has three bookkeeping requirements that a sole proprietor does not:
- Owner payroll reconciliation: The owner must receive a W-2 salary — every payroll run must be reconciled to the general ledger. If payroll is via Gusto or QuickBooks Payroll, the bookkeeper reconciles each pay period to ensure payroll expenses hit the correct accounts.
- Salary vs distribution ledger: The IRS requires reasonable compensation — salary and distributions must be tracked and documented separately every month. This ledger is the primary defense in a payroll tax audit.
- Shareholder basis tracking: Each shareholder's basis is updated annually from the K-1. This is required to correctly calculate whether distributions are taxable.
These three items add 2–4 hours of work per month over a sole proprietor — which is why a $100–$300/month premium is legitimate.
Zero salary audit trigger: If your S-corp shows distributions but no W-2 salary for the owner, the IRS will likely flag it for a payroll tax audit. The IRS expects reasonable compensation (benchmark: 40–60% of net profit). Your bookkeeper must flag if no payroll is being run — and document the salary-versus-distribution ratio monthly.
S-Corp Bookkeeping Pricing — US Market vs Sharma Jyoti and Co
| Transaction Volume | US Market Rate | Sharma Jyoti and Co | Annual Savings |
|---|---|---|---|
| Under 100 transactions/month | $600–$900/mo | $400–$480/mo | $2,400–$5,040/yr |
| 100–200 transactions/month | $800–$1,100/mo | $480–$560/mo | $3,840–$6,480/yr |
| 200–350 transactions/month | $1,000–$1,500/mo | $560–$700/mo | $5,280–$9,600/yr |
What Sharma Jyoti and Co Includes in S-Corp Bookkeeping
- Bank and credit card reconciliation (all accounts)
- Expense coding to Form 1120-S deduction categories
- Payroll reconciliation — each pay period reconciled to general ledger
- Salary-versus-distribution ledger — updated monthly, documented for IRS
- 1099-NEC tracking for contractor payments
- Monthly P&L and balance sheet
- Quarterly estimated tax data for your CPA
- Year-end Form 1120-S CPA workpaper package
Frequently Asked Questions
S-corp bookkeeping costs $400–$600/month at Sharma Jyoti and Co, versus $700–$1,200/month at US providers for the same scope. The higher cost versus a sole proprietor is due to owner payroll reconciliation, salary/distribution tracking, and Form 1120-S workpapers — all included in our standard fee.
S-corps require owner payroll reconciliation, salary-versus-distribution documentation, and shareholder basis tracking — none of which apply to a sole proprietor. These add 2–4 hours/month, which is why a $100–$300/month premium over sole proprietor pricing is legitimate. The premium at Sharma Jyoti and Co is $150–$250/month.
Bank reconciliation, expense coding, payroll reconciliation, salary/distribution ledger update, 1099 tracking, monthly P&L and balance sheet, quarterly tax data. At year-end: complete Form 1120-S workpaper package. Sharma Jyoti and Co delivers all of this at $400–$600/month — your US CPA reviews and files.