It is a struggle for small businesses to afford extra help. Therefore, small business owners hesitate to decide if they should be hiring accountants. This reluctance is primarily because most business owners are constantly looking for ways to save on unnecessary costs. 

Secondly, there is a wide array of business accounting software available on the market. But is accounting software all you need to manage your cash flow? And if you decide to hire an accountant, how much does an accountant cost for a small business? Read ahead to find out.

Regardless of your skill at using accounting platforms, there could be beneficial insights that you could be missing out on — insight that only an experienced accountant can provide. A professional with an accounting degree will know the latest accounting practices to help significantly with financial management.

Our readers have asked: how much does it cost to hire an accountant for a small business? This article aims to answer that and estimate the accountant fees for small business owners. It also informs when you should hire a business accountant and what to expect.

The Average Cost of Accountant for Small Businesses

The typical hourly rate of accounting services is between 24 and 30 dollars per hour, but can go up to 400 dollars or more. The exact cost depends on the accountant’s skill level, type of business, type of work, size of the firm, and location. Between these figures is the cost range of hiring an accountant on an hourly basis. Service providers may have varied cost structures, with some based on a percentage of business revenue and others being a flat rate with variable overhead costs. If you want your accountant to offer bookkeeping services, prices will be at the higher ends of this range.

When Does Your Business Need an Accountant?

Let’s start with considering what your small business will gain by hiring an accounting expert. Typically, a certified public accountant (CPA) or a business accountant can provide the following accounting services:

  • Setting up bookkeeping and accounting systems,
  • Maintaining financial records,
  • Tax preparation and managing tax returns,
  • Filing your taxes and offering income tax advice,
  • Providing financial statements,
  • Producing accurate audit reports — usually as monthly reports,
  • Offering business advice and creating financial plans accordingly.

Accounting and bookkeeping are time-consuming, difficult tasks. So, although business owners can perform some of these business activities themselves, the added expertise that skilled accounting professionals offer boosts the productivity and efficiency of business bookkeeping and accounting tasks. The cost of accounting will, without a doubt, be repaid in the form of smooth accounting processes, a streamlined business structure, minimal mistakes in financial management, and more.

That’s not all, since accountants can offer financial analysis and provide erudite advice that will help plan your business strategies and revamp your pricing structure for added benefits. 

How to Save Money on Accounting Costs

Depending on what you require from your accounting help, how long you hire an accounting expert may differ. Depending on your business structure, maybe it is best to hire an in-house accountant or create a separate accounting department. But this is an expensive option only for well-established firms that find it feasible to pay the administrative costs for additional office space and accounting service costs. This factors into the average cost of accounting services for small business setups.

For small businesses, it is best to opt for consultation services from an accounting partner that charges according to the hours of consultation. Be vary though, since there may be overhead costs, and some service-based accountants might cost you hundreds of dollars per hour for consultation. You can reduce these costs by pinpointing what you need from your accounting service. If you only want help with bookkeeping, the hourly fee for a bookkeeper is about $25. This number is according to the U.S. Bureau of Labor Statistics. 

Costs also add up depending on an accountant’s experience and qualifications; an accountant with more than 15 years of experience may charge a lot more for carrying out simple accounting responsibilities than a fresh graduate with an accounting degree.

To sum up how you can save costs, it is best to:

  • Highlight what services you need;
  • Contact several accountants and get price quotes from them;
  • Ask for a free consultation; let your accountant assess your needs and explain how they can help you. They will also let you know what the costs will be;
  • Check how long it would take the accountant to set up accounting systems and if it is viable for you;
  • If you only need help with bookkeeping services, ask if the accountant offers lower-cost services to perform a few of these duties;
  • Factor in the long-term cost-benefit analysis of hiring accounting services, and check how long you would like to hire an accountant. 

Did I Hire the Right Accountant?

If you want to assess the hiring and job performance of the accountant you’ve hired, here is a list of qualities you should search for and warnings you should watch out for:

Positive Qualities

  1. They are qualified and with proper references,
  2. They have proven experience in your business sector or have enough knowledge about it and are honest about it,
  3. They base their decisions on proven and relevant information and are responsible,
  4. They have critical observation skills and make minimal mistakes in their services,
  5. They can set viable expectations and deliver on them,
  6. They observe deadlines, 
  7. They set up backups and will not suddenly lose all your financial data.

Warning Signs

  1. They are willing to change numbers and minor details without backing data,
  2. They give you too many details about their other clients; this means they will give details about your financial operations to others as well,
  3. They are not able to answer your questions satisfactorily,
  4. They start making decisions without your knowledge of them.

FAQs

Let’s hope that most of your concerns have been answered in this article about degree small business accountant fees. Readers also ask:

How Much do Small Businesses Spend on Accounting Costs?

According to a survey SCORE conducted in 2015, small business owners spent at least $1000 per year on internal costs, administrative costs, and legal fees. 

What is the Difference Between Accounting and Bookkeeping?

While a bookkeeper will consistently and accurately record business transactions, an accountant utilizes the data provided by a  bookkeeper to provide valuable business insights.

Does a Small Business Require an Accountant?

Small businesses do not require accountants, especially at the beginning of their ventures, since business expenses need to be minimized. But there always comes a time when a business needs to improve its practices by checking new opportunities and evaluating how much it will benefit with the help of accounting services.

The Bottom Line 

Deciding to hire an accountant that will help you with your business is a long-term investment. Undoubtedly, the question “how much does an accountant cost” will linger in your mind along with many other concerns since there are many factors involved in a profitable accounting partnership. It is essential to determine what you will gain from such a service, the skill level you require and weigh the costs and benefits relevant to it. 

If you decide to hire an accountant, you need to make sure that they are the right person for your business goals and needs. While hiring, a diligent business owner would check the specific fees, experience, qualifications, and services an accountant will provide to their firm. If you choose wisely, you will save a lot of time and energy while also streamline your financial structure with the help of an accountant; this outweighs the costs in the long run.