Ac­coun­tant costs: external help for book­keep­ing

The more your business grows, the more important the role of expert, trust­wor­thy con­sul­tants and as­sis­tance becomes - es­pe­cial­ly when it comes to the financial and economic matters within your company. For many busi­ness­es, a good ac­coun­tant or tax con­sul­tant is often in­dis­pens­able, as people don’t want to get into the nitty-gritty of tax returns and tax laws – and for good reason. These are often time consuming and getting these things wrong can end you up in hot water. This article will take a look at what an ac­coun­tant can do for your business, and how much one should cost and why.

First things first: What exactly is the dif­fer­ence between a tax con­sul­tant, and an ac­coun­tant? Why do you need one or the other? These are important questions, because although both can help your business with book­keep­ing, the roles of these two jobs is actually quite different, and the cost of an ac­coun­tant reflects this dif­fer­ence. An ac­coun­tant is someone you hire to offer advice and analysis of your financial state as a business. This is more than someone you hire just as a book­keep­er but con­sid­er­ing the range of book­keep­ing apps that there are out there, this article will not cover the cost and role of an external book­keep­er.

An ac­coun­tant can help you review how your business has done in the last year, and with data from your yearly financial summary can assist you in growing your business further for the next fiscal year. An ac­coun­tant will help you keep your books, and then analyze the in­for­ma­tion from your book­keep­ing in your best interest. Ac­coun­tants are trained and qualified specially to give you pro­fes­sion­al financial advice, and this will be tailored to your business the longer you stick with one. Finding an ac­coun­tant early on in your business is part of building a good support network. Potential services that an ac­coun­tant can offer your business is:

• Profit and loss state­ments: An ac­coun­tant can do this for your business
• Start-up as­sis­tance: If you’re just founding your business, an ac­coun­tant can help you come up with a plan for your finances
• Smart savings: Part of an ac­coun­tant’s analysis will be to see where you’re already saving well, and where you’ve got room for im­prove­ment.
• Budgeting: A trick as old as time, but without proper budgets, your book­keep­ing will in­evitably become chaotic and seem un­pro­fes­sion­al to potential investors.
• Tax returns: One of an ac­coun­tant’s main jobs can be to help you file your tax returns properly, and on time, saving you a lot of paperwork and potential hassle.
• Filing Receipts properly: If you’ve got incoming and outgoing cash flows, you’ll def­i­nite­ly need to store your receipts properly. An ac­coun­tant can help.
• Different types of Book­keep­ing: An ac­coun­tant will be able to help you keep your books, re­gard­less of whether you use single entry accouting or double entry ac­count­ing.

There will be instances when your ac­coun­tant can help you with common areas of taxation. However, you might find yourself requiring the as­sis­tance of a pro­fes­sion­al who is spe­cial­ized in more complex tax advice, and in this case, you may want to hire a tax advisor. A tax advisor can help you un­der­stand the following subject fields when you need par­tic­u­lar advice:

• Business and Corporate Taxation
• Sales Tax
• Prin­ci­ples of Ac­count­ing
• Personal Taxation, as well as In­her­i­tance Tax

The costs of an ac­coun­tant are not regulated or de­ter­mined by local gov­ern­ments, so the answer isn’t as simple as saying a per­cent­age of a purchase price, as with many estate agents, for example. This means that you’ll have to put a bit more work in to figure out how much you want to or can spend on an ac­coun­tant.

Of course, the cost of an ac­coun­tant will also depend on how fre­quent­ly you use an ac­coun­tant’s services, and depending on the type of business you run, this can vary quite a lot. Ac­coun­tants and attorneys typically bill on an hourly basis. And the number of hours they need to spend on your purchase depends on a variety of things, from the size of the deal and the com­plex­i­ty of the trans­ac­tion to how com­pe­tent­ly the seller has kept financial and business records.

Generally speaking, ac­coun­tants and book­keep­ers charge on a per hour basis. How much is charged depends on how taxing (pun intended) the work they must do is. The costs can vary from $60 to $400 an hour, and you’ll certainly find quotes both above and below those brackets. As with most things, you can probably assume that a good ac­coun­tant will cost more than a bad one. However, this also isn’t as simple as that, because factors such as business size, ex­pe­ri­ence, and projects type all influence the cost. If you’re a small business, you may want to look for an ac­coun­tant with ex­pe­ri­ence in advising small busi­ness­es, and it makes little sense to spend $600 an hour on an ac­coun­tant who spe­cial­izes in big business deals, if that isn’t who you are. In this case, you might be better off with a small business ac­coun­tant who charges $150 – saving your business money and most likely getting your business better advice.

It is also worth noting that someone who has worked 25 years in the industry may charge more than someone who is just starting out. Whilst you may have greater peace of mind opting for an ex­pe­ri­enced ac­coun­tant, there is nothing to say that a newly qualified ac­coun­tant won’t be able to make the cut, and you could save yourself money for services that are just as good. One thing to look out for is whether your ac­coun­tant is a CPA or not (certified public ac­coun­tants). A CPA will have had to revise for and pass difficult exams and will be licensed in their operating state. A CPA qual­i­fi­ca­tion is usually a sign of a trust­wor­thy business partner.

In 2015, the non-profit or­ga­ni­za­tion SCORE did a survey of how much small busi­ness­es usually spend on ac­count­ing. The survey showed that the majority of small business owners spent a minimum of $1,000 per year on ac­count­ing ad­min­is­tra­tive costs, internal costs, and legal fees. Of the small business owners in the survey,

• 23% spent $1,000 or less
• 31% spent $1,000 to $5,000
• 18% spent $5,000 to $10,000
• 12% spent $10,000 to $20,000
• 16% spent $20,000 or more

Even though it is hard to give a con­clu­sive answer on how much an ac­coun­tant costs for a small business, this poll shows that you can expect to spend between $1,000 to $5,000 if you are a small business. Note that this data is 5 years old – as expenses have increased, it could be much more these days. As a straight­for­ward start-up business, you’ll need no less than 30 minutes to 2 hours of con­sul­ta­tion, usually more than that, which can rack up to $600 quite quickly. This sort of meeting will go over your business structure, and the types of taxes you need to pay.

But that isn’t all you have to factor in: once you’re up and running, you’ll also need to look at financial analyses and get advice on how to ensure your business’ financial success. This can take another few hours, or more frequent, shorter meetings, racking up another bill for around $600.

The price of an ac­coun­tant might seem daunting at first: Having to spend so much in the first stages of your business can be in­tim­i­dat­ing, but as es­tab­lished business owners will know, it is of vital im­por­tance to have a good ac­coun­tant on your side. Spending money where it matters is a good skill to have, and an ac­coun­tant is one of those expenses that may seem frus­trat­ing but is certainly worth it in the long run.

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