accountants cost, software, budget

Accountants Cost in Small Business

Accountants Cost in Small Business

The accountants cost for their accounting services in small businesses depends on the industry, size, location, and other key factors. While many small-business owners opt to do their accounting and bookkeeping, there may come a time when you decide to hire out these services. Accountants can help you improve the financial health of your business, create reports that can help you secure funding, and prepare your taxes accurately and efficiently.

So, how much do accountants cost for small businesses? The answer depends on the size of your business, industry, and other factors. This article will discuss the average cost of accounting services for small businesses.

What does an accountant do?

An accountant looks at a business’s bookkeeping data to provide financial insights, such as reports, financial planning, and tax forms. They also help business owners reduce taxes, reach financial goals, and increase cash flow. Above all else, an accountant advises small business owners on optimizing and improving their finances.

Here are some of the most common responsibilities of an accountant for small businesses:

  • Financial data analysis
  • Financial statement preparation
  • Tax planning
  • Tax return preparation
  • Business forecasting

Does your small business need an accountant?

It may be time to hire an accountant if you are seeking funding, need help preparing taxes, or need financial advice as you start or scale your small business.

Accountants can ensure your financial reports are accurate and optimized, so you can minimize taxes, increase cash flow, and grow your business. Having an accountant to help you prepare tax returns or any government form is especially helpful.

How much will accountants cost?

Accountants and certified public accountants (CPAs) charge different amounts based on their years of experience, location, and the industry they’re serving. So, if you’re a small-business owner needing non-specialized accounting services, you can expect to pay an accountant anywhere from $150 to $450 hourly on average.

According to a recent report from Score.org, most small businesses spend $1,000 to $5,000 annually on accounting fees and services.¹

What is the difference between accounting and bookkeeping?

Accounting and bookkeeping go hand in hand, but they are two distinct roles. What’s the difference?

A bookkeeper records business transactions and day-to-day operations. They manage bills, payroll, invoicing, and transactions with suppliers. Most bookkeepers monitor cash flow, create budgets, and manage accounts payable and receivable.

Accountants take the information compiled by a bookkeeper to provide greater financial insights. Their role is more strategic, to optimize the business’s overall efficiency.

How much does accounting software cost?

Small-business accounting software can be a great alternative if you’re not quite ready to hire an accountant but don’t want to tackle finances completely on your own.

Most small-business accounting software costs $0 to $150 per month, with basic plans starting at $0 to $40 per month. These plans allow small-business owners to easily track income and expenses, create and send invoices, and create financial statements and reports.

The more expensive plans include additional features including inventory tracking, customized financial reporting, payroll, and others.

Some of the best small-business accounting software options include QuickBooks, Xero, and FreshBooks.

Accountants for small businesses FAQ

How much does accounting cost for a small business?

The cost of accounting for a small business varies widely depending on the industry and size of the business. However, more than 50% of small business owners surveyed pay at least $5,000 in accountant fees annually.

What is a reasonable for accountants cost?

About half of small-business owners pay at least $5,000 annually for accounting fees, so you can use this as a reasonable benchmark price. Keep in mind, though, that if you run a smaller business, your rate will probably be lower. Alternatively, if you run a larger business, rates could be higher.

What do accountants do for small businesses?

Accountants help small businesses improve their financial efficiency, cash flow, tax processes, and more. Here are some of the standard tasks for a small business accountant:

  • Financial data analysis
  • Financial statement preparation
  • Tax planning
  • Tax return preparation
  • Business forecasting

How much do accountants cost per hour?

The average accountant charges $150 to $450 hourly, depending on factors like their years of experience, the type of work, the size of the business, and the location. Some accountants cost may be a flat fee along with additional, variable rates.

Are accountants expensive?

The takeaway for accountants cost

The cost of hiring an accountant for your small business depends on location, industry, and the size of your business. Most accountants cost between $150 and $450 hourly— although lesser amounts can be available for repeat and large volume customers.

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