This analysis is only an estimate but helps determine if an investment makes sense for your business. When you get to this stage, you might wonder how to outsource these tasks to someone with more expertise—like an accountant. Accountants can help you save time and can assist with financial planning, tax preparation, and error prevention. While you will need to part with some money to obtain the services of an accountant, hiring an accountant means you will access the expert knowledge required to grow your business. By thoroughly assessing an accountant’s credentials and references, and understanding the service agreement, you can confidently select the right accountant or accounting firm for your business needs.
But one way to paint a better picture of how much you’ll spend on accounting services is through a cost-benefit analysis. In this article, we’ll explain how accountants calculate their costs and the average cost of an accountant to help you decide if hiring an accountant is the right decision for your business. We’ll show you the benefits of hiring an accountant, how to determine their fees and alternatives to hiring one if their cost is beyond your budget.
Business Size and Complexity
You’ll also need to track tasks like calculating capital gains, asset deductions, and fringe benefits tax. Consider looking for accounting software with advanced features such as mileage tracking, invoicing, and time tracking. Accounting software could be a more budget-friendly option, even if you have to hire someone to manage the platform. Also, you can make mistakes that put you in trouble with the IRS, which will often cost you more time and money than when you hire a professional. Accurate accounting helps you do a lot, including maximizing tax deductions and making better financial decisions. In addition to formal qualifications, consider asking for referrals from colleagues, friends, or online review platforms.
When you know how to read your financial statements, you can find ways to increase your profit, and catch problems before they grow. When you hire a CPA, you’ll have a detailed record of all financial transactions. If your business is relatively small (or more of a side hustle), you may be able to handle your accounting on your own. Get free guides, articles, tools and calculators to help you navigate the financial side of your business with ease. The magic happens when our intuitive software and real, human support come together. You can verify your accountant’s credentials by contacting the Board of Accountancy of their licensing state or by using the CPA verify tool.
- This is why most individuals prefer to entrust their finances to a certified public accountant (CPA).
- On average, small businesses spend $1,500 to $6,500 per year on accounting services.
- Whether you want to stay (or get) on track with bookkeeping, business payments and expenses, cash flow, or financial development, don’t underestimate the value an accountant can bring to your business.
- By employing a retainer model, companies can ensure they have reliable access to accounting services and potentially negotiate a lower hourly rate.
The average cost of an accountant
Adam received his master’s in economics from The New School for Social Research and write-up service definition his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. The accountant might require you to invest in new software to help facilitate the job.
Is it worth it to hire an accountant for your business?
For more information, check out the best online bookkeeping services for small businesses. The annual cost of hiring a personal accountant will depend on the type of services needed and the frequency with which they’re required. Some individuals may only need an accountant for tax preparation or occasional financial planning advice, while others may require ongoing services. To determine the annual cost, multiply the hourly rate by the estimated number of service hours needed throughout the year.
Can I prepare my company’s taxes myself?
Accountants take the information compiled by a bookkeeper to provide greater financial insights. Their role is more strategic, with a goal of optimizing the business’s overall efficiency. Based on the section above, you should have a good idea of what the average CPA fees should be based on the firm, location, and experience of your CPA. Inquire approximately how many hours they believe the work you enlist them for should take and see if the number is reasonable. Because of the additional education and certification that a CPA holds, they are able to command a higher rate than a general accountant, whose median hourly rate is only $20.01.