You've started a business?
You've perfected your products
You've polished your sales pitches
And now you're ready to be successful!
One problem - when you start making money, you need to make sure you're in control of that money.
That means you need an accountant.
Read More: The Basics Of Accounting
Just like one of my clients did, only last year:
They had been in the PR industry for 6 months when they realised they were losing control.
They had clients rolling in, but they also had money rolling out!
And if you don't have a grip on your bank balance, you could end up making a mistake that could cost you.
But as much as they wanted an accountant to keep control of their cash, they knew that an accountant would cost them:
We are struggling with our budget as it is
How much does an accountant cost?
(I don't know about you but spending money to save money just doesn't make sense to me...)
They wanted me to find them a solution.
And I did.
But it took me 37 hours - yes, 37 - to source a solution to their accounting needs whilst also beating their budget.
So, to save you time on sourcing your own accountant that suits your purse strings, I thought I'd do it for you.
That's right - this is your ultimate guide to how much an accountant costs!
This article will take you through
- How to pay your accountant
- How much an accountant's individual services costs
- What factors influence the cost of an accountant
- Our top-rated accounting firms
- How to save on the cost of an accountant
And if you're still feeling stuck, I've answered some Frequently Asked Questions to combat any of your queries.
It's all well and good to know how much an accountant costs...
Fact is paying too much - or even too little - can make or break your business.
But how you pay them that can do just as much damage!
That's why I deemed it fit to run through the methods behind paying an accountant.
How else are you going to work out which will suit your business best?
You could pay a fixed fee for a package
The most common method of using an accountant is by paying a fixed fee for a series of accounting services.
Each accounting firm provides its own set of packages which include different services and thus come with different fees.
My client was still getting used to owning a PR business and wanted something that was easily adaptable to their budget.
That's why I suggested a package!
Fit with a fixed fee, they knew what they were getting, and could budget the rest of their business-related costs around their accountant.
You could pay an hourly rate
Instead of a fixed fee on a regular basis,you can also pay your accountant on an hourly basis.
This could be for one-off services, or bespoke accounting.
This often involves business plan advice or tax planning - both of which come with a higher price tag.
However, this is a rare payment method for accountants; they typically charge by the job, not the hour.
You could contract them on either a monthly or yearly basis
Fixed fees can either be paid on a monthly or annual basis.
For businesses with a smaller budget, a monthly basis might be more suitable if you can't fork out for the annual cost up front.
My client stuck to this advice:
They used to pay on a monthly basis but they are now planning to switch to an annual fixed fee in the upcoming year.
Thanks to their recent success, they finally have the room in their budget to commit to their accountant!
It might not be a deciding factor in your business' success, but one thing is for sure:
How much you spend and how you spend it determine your business' future.
Tailoring your accounting service to your business' needs can guarantee a high-quality service, and a low-cost accountant.
Sounds good to me!
Now we've covered how you fork out for the costs, how about we actually cover the costs of accountants?
You own a business, right?
You don't have time to calculate accounting fees...
You don't have time to assess your accounting needs...
You barely have time to complete your to-do list!
That's why I've decided to make things super-duper simple.
I'm going to lay out the individual accounting costs for the major tasks completed by accountants so you can see how it all adds up.
Not only will you be able to see what accountants can provide for your business, you can determine the tasks you need to outsource to an accountant.
And by working out which tasks you can do yourself, you can even see where you can save!
(Don't worry, you can thank me later...)
Depending on the turnover or size of your business, this can cost between ||$||192.53||$|| and ||$||770.10||$||.
This is one of the most expensive costs and is a key, yet complicated, task.
This will cost ||$||385.05||$||.
If it is not outsourced and done incorrectly, it can result in hefty fines which can comprise between 0% and 30% of the extra tax owed.
Depending on the size and turnover of your business this can cost from ||$||192.53||$|| to ||$||256.70||$||.
If errors occur, this can result in fines that amount to 100% of the tax under-stated or over-stated.
Depending on the size and turnover of your business this can cost between ||$||256.70||$|| and ||$||641.75||$|| a month.
Incorrect payroll can attract fines and cause problems among your employees.
The latter might even end up costing you more!
Here are the other tasks that can accountants offer:
Analyzing business plans
Negotiating business deals
Auditing financial information
Compiling reports and financial statements
Presenting the business' budget
By assessing the tasks you need to get done - and have no chance of doing yourself - you can effectively budget your accounting needs.
Also, by seeing the individual costs, you can avoid overspending on your accounting.
Now, go get your mental maths on!
Accounting is complicated, isn't it?
I can barely only an Excel spreadsheet, let alone calculate my tax return!
As accounting is clearly not a simple task, it follows that the cost will not be an easy answer either.
This is because there is a collection of factors that influence how much an accountant costs.
And each factor relates this - how long it takes your accountant to do the accounting.
So, to help you understand your bill better, I've compiled these factors here:
What sector do you operate in?
Some sectors have a greater need for accountants...
And greater need suggests more intensive tasks are required...
And more accounting done means a bigger bill!
The hospitality and retail sectors are subjected to the highest accounting bills as they both witness a high amount of transactions every day.
Also, certain sectors will have a greater chance of high turnover and this is a factor which increases the cost of accounting.
As my client worked in PR, financial transactions weren't at the centre of their business.
Thus, they had lower accounting fees than my retailing clients!
How many staff do you employ?
The greater the number of staff employed, the greater the size of the business, right?
This means that both the profitability is likely to be greater and any accounting tasks like payroll will have to be on a bigger scale.
Or, the smaller the company, the smaller the bill.
Lucky for my client that they had 6 employees when they first got out of the start-up gate!
What is your business' turnover?
It's a basic principle of business: if you want to buy more of a product, you're going to have to pay more!
The same goes for accounting.
Earn a lot of money? That's more to manage
That's more hours put in by your accountant And that's a bigger bill!
The greater the turnover of your business, the greater the scale of the accounting tasks needed to be undertaken.
What is the size of your business?
Small businesses can often manage their own accounting (or parts of it, such as bookkeeping).
They also have fewer accounting needs compared to bigger businesses which often have a higher turnover. Thus, the smaller the business, the lower the bill.
It's for this reason that I place so much importance on tailoring my client's accountant to their needs:
My client's business was a small business when they first came to me for advice.
I guided them to an accountant that fit their budget and was qualified to support small businesses.
You now know what could be pushing up or pulling down the price of your accounting.
And this means that you can assess the price of your accountant in much greater detail!
Whether it's saving on a lower rate or forking out for a costly bill, you can be in control of your costs.
Hold on a second...
Isn't that your accountants' job?
I could tell you why accountants can be so expensive
And I could just leave you to get on with your costly accountant...
But I've decided to make things that much easier for you.
I've had enough clients tell me that they don't have time to find an accountant. And they don't have time to do their accounting, either!
So, I thought that I'd save you time on the search, and compare the top-rated accountants for businesses of all shapes and sizes.
And - of course - I've compared their prices.
|Cogneesol||Fusion Business Solutions||Salient Accounting and Finance|
Reviewers loved the efficiency of the accountants and the multilingual assistance for any forms and data in different languages.
Reviewers loved the vast pool of talent on offer and the highly-qualified professionals that can provide accounting for your business.
Reviewers raved about the reliable support on offer and even claimed they could reduce the cost of your accounting!
Their rate is ||$||25||$|| an hour.
To determine the price of a project, you will have to get a quote.
Their rate is ||$||25||$|| an hour.
The minimum price of a project is approximately ||$||1000||$||.
Their rate is ||$||50||$|| to ||$||99||$|| an hour.
The minimum price of a project is approximately ||$||1000||$||.
They are a global provider of business management solutions, and work with small and large businesses alike.
In particular they focus on technological solutions to your needs.
This firm mainly works with SMEs, but they also works with a wider variety of businesses.
They specialise in administrative jobs as they are a virtual assistant agency.
This firm focuses on financial advice for larger enterprises, business partners and individuals.
Their most popular tasks include wealth planning and taxation issues.
You know how much an accountant costs...
You know what the top-rated accounting firms are for your business.
And you even know what will influence your own bill!
But I thought that I'd take things another step further:
I've brought together our top tips for saving on the cost of your accountant.
1. Organise Financial Records
It's time to swap your costly accounting fees for software!
Whether it's Xero or QuickBooks - whatever software organises your financial records can speed up the process of accounting.
And less time accounting means a lower bill.
Bookkeeping is the most popular task subjected to the DIY treatment, and it is a cost-effective solution to your financial needs.
Makes sense, right?
Then why not reduce the amount of tasks your accountant has to take on and try your hand at some basic tasks yourself?
3. Take Your Finances Online
Everything is online now - including your finances.
So, isn't it time to swap your human accountant for software that can do it for you?
This quick solution to your accountancy needs will certainly get you your money's worth.
Read More: Wikipedia on Accounting
How do I know if an accountant is qualified?
There are a number of qualifications that your potential accountant should be showcasing.
The minimum qualification is the AAT. The higher level qualifications include the ACA (Associations of Chartered Certified Accountants) or CIMA (Chartered Institute of Management Accountants) which allow you to become a chartered accountant.
Accountants can also belong to professional organisations such as the Institute of Financial Accountants.
What's the difference between accounting and bookkeeping?
Both of these processes tend to get confused because they are both closely related.
Bookkeeping is the process of gathering your business' financial information, and accounting is the process of analysing it and producing the relevant documentation.
Nevertheless, bookkeeping is often included within the definition of accounting.
Should I opt for monthly or annual accounting?
Monthly accounting officially triumphs over annual accounting.
Accountants are finance experts - if they spot a fix in your finances that could've made your year more profitable at the end of the year, it won't be of much help.
Monthly accounting, on the other hand, gives you access to financial advice on a much more frequent basis.
What is outsourced accounting?
Outsourced accounting is when a third party takes care of your business's accounting. Typically this means a virtual assistant - a remote-working freelancer - who specialises in accounting takes the reins.
Do I need an accountant for my small business?
This depends on the complexity of your finances. Typically small businesses and sole traders have relatively simple bookkeeping needs and can thus do their own accounting (to an extent).
However, it is advised that small business owners use an accountant for financial advice and streamlined finances.
By now you should know the individual costs stacking up to your final accounting bill
And you should even know how to save on an accountant!
But now it's over to you:
What accounting task are you eager to ditch?
And given the tailored nature of accounting to your business - how much does your accountant cost?