How Much Does a Business Accountant Cost?
While the average full-time accountant who is an employee at a company makes about $40 an hour (calculated based on the average annual salary of $81,660), business accountants can cost between $100-250 an hour, depending upon their qualifications and the tasks they perform. More basic functions, called bookkeeping, can be even more affordable, with outsourced bookkeeping rates ranging between $50-100 an hour.
But before we get into pricing structures, let’s tackle something more general. Whether you’re just starting your business or you’re experiencing some growth, you might wonder, “should I hire an accountant for my small business.” Most businesses can benefit from a financial professional like an accountant to help manage their money and make smart decisions. This article will cover the reasons for hiring an accountant for your small business, as well as the average cost of an accountant for a small business.
Do I Need an Accountant for my Small Business?
Maybe. The truth is, you probably need someone to handle the financial side of your business. If your small business is fairly new or your transactions are relatively simple, you might be able to handle the day-to-day money matters yourself or with a bookkeeper. While these options are often more affordable than an accountant, there are several reasons why you might need an accountant for your business.
A growing small business may need an accountant to help with financial forecasting or to take over more complex financial transactions. Or, if you find yourself needing financial reports, monthly accounting, or cash flow forecasting, it might be time to bring in an accountant. And, if you’re a small business owner who invested your own money in your company, it can be even more important to have an accountant who can help you save your money and make smart financial decisions along the way.
An estimated one-third of small businesses in the US with a budget exceeded it in 2020. While working with an accountant can be more costly than DIY or bookkeeping approaches, it can provide you with an added layer of expertise for your monthly, yearly, and future-focused financials.
More so than just managing compliance, outsourced accounting services can help small business owners make smarter and informed decisions. Finances are at the heartbeat of any organization;, oftentimes business owners need help structuring their financials in a way that ends up being meaningful for their business.
How Much Should I Pay an Accountant for my Small Business?
The short answer is, it depends. A business accountant’s cost is informed by numerous factors, including their skill level, experience, location, and any certifications or credentials they might have. In addition to these factors, the tasks you need done will also weigh into the cost. Generally, executive-level tasks like fractional or outsourced CFO, oversight of financials, and budgeting will run at a higher cost than monthly bookkeeping and accounting, account reconciliations, or financial reviews.
You might find advertisements online for exceedingly cheap accountants, but remember that with most things, you get what you pay for. For high-quality business accountants that are not CPAs, you can expect to pay between $100-$250 an hour, depending upon the criteria we listed above. Or, if you are operating on a fixed, monthly plan with a business accountant, you can expect to pay somewhere between $750-5000 a month.
How Much Does a CPA Cost for a Small Business?
CPAs, or Certified Public Accountants, are highly-trained accounting experts who have passed a complex exam to earn this designation. As such, the average salary of a CPA is much higher than an accountant—with average yearly salaries into six figures. While hourly rates vary for CPAs too, you can expect to pay at least $100 an hour for their services.
In a business setting, CPAs and accountants can handle many high-level accounting tasks that bookkeepers are unable to do. Most of the time CPAs are used for tax purposes. CPAs are able to prepare audited financial statements—which regular accountants cannot do.
How Much Does an Accountant Cost for a Small, Limited Company in 2021?
Generally speaking, small businesses spend at least $1,000 a year on accounting processes. According to a recent study done by SCORE, nearly half of small businesses spend at least $5,000 annually on accounting, with 16% spending at least $20,000.
As with most studies, actual results may vary when it comes to your individual business. For example, in a year when you need to overhaul your accounting processes, you may need to budget more for accounting that year. So, while your own accounting costs may not align completely with these numbers, they should serve as a jumping off point to help you decide how much your business can spend on financial services.
Milestone: Accounting Services to Fit your Business
If you’re tired of looking for a “small business accountant near me,” and coming up with endless search results you can’t decide between, stop searching. Milestone is more than your typical professional services firm. We provide a refreshingly forward approach to your back office, making it easier than ever to manage your financial services with a trusted partner at your side. So, no matter what kind of financial assistance you need—from outsourced bookkeeping to accounting to fractional or outsourced CFO work—Milestone is here to partner with you on your entrepreneurial journey. We’d love the opportunity to learn more about your business and how we can support you. Reach out today to explore how Milestone can help your business.
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