Are you planning to hire an accountant for your small business?
First things first, you’ve made a smart decision. Your business’s finances should be handled by an expert; otherwise, you risk mismanaging them. Bear in mind that a whopping 82 percent of the small businesses that fail do so because of poor financial management.
However, you also don’t want to spend more than your business can afford. This brings us to the question: how much does an accountant cost for a small business?
Continue reading for deeper insight on small business accountants.
How Much Does an Accountant Cost for a Small Business?
We’d love to give you a ballpark figure, but that’s not possible. There’s no standard or fixed cost for having an accountant working for your business.
There are a number of variables that’ll determine your accounting costs – More on this coming up.
On average, though, expect to pay about $35 an hour for the services of an experienced accountant.
The Factors That’ll Determine Your Small Business Accounting Costs
Now that you’ve got a rough idea of how much you’re going to spend on accounting fees, let’s focus on the factors that will determine how much you’ll pay.
In-House Employee or Outsourcing?
When you need an accountant, you have two options: hire an in-house employee or outsource the function to a company that offers accounting services.
In most instances, outsourcing is way cheaper than hiring an employee. With an in-house worker, you won’t just be paying them a recurring wage. There are other indirect costs of having an employee, such as providing a workstation in your office space.
But when you outsource, you just pay the service, nothing more. There are several accounting outsourcing companies, so shopping around can get you an even cheaper quote.
Plus, you can terminate the service whenever you wish if your business can no longer afford it. On the other hand, firing an employee isn’t so simple.
The Size of Your Small Business
Business finances are pretty much like personal finances.
When you have a small amount of money, you can easily keep track of what’s coming in and going out. However, if you start dealing with millions, things can get super complicated.
If your business is fairly large and its cash flows are complex (maybe you’ve loans, unpaid invoices, merchant accounts), your accountant is going to work harder than they would if your business had simpler finances.
Generally, the more your business grows, the costlier accounting gets. Even if you’re doing accounting in-house, you’ll realize that you need to hire more accountants or bookkeepers.
Accountant Qualifications
Some accountants have associate’s degrees in accounting, others have a bachelor’s degree. Others are Certified Public Accounts (CPA).
Obviously, it will cost you more to hire a CPA than a regular accountant.
Know the Cost of Accounting for Your Small Business
So, how much does an accountant cost for a small business?
It really depends on a range of factors. What’s certain, though, is accounting, like any other professional service, doesn’t come cheap. With this guide, you now have a clearer understanding of small business accounting costs.
Keep reading our blog for more small business tips and advice. For more tips on accounting and CPA services, visit the Finance section of the Bootstrap Business Blog now.
