Learn

Language:

How Much Does an Accountant Cost?

By Kira Gavalakis

Published on 16 Mar 2023 7 min read

You’re probably used to hearing that age-old adage, “it depends!” when answering cost questions, but when we’re talking about business finances, we pride ourselves on giving accurate, not comfortable, information.

The truth about accountants is that there isn’t one fixed price, but the general fees span between $1,000 to $5,000 depending on the services provided. For you to get the best answer, you’ll just have to find a perfect-fit accountant for your business and find out.

Don’t worry though — we’re not leaving you hanging! Let’s get into the details about accountants, including what to do, what they do, and how they work.

When Do You Need an Accountant and What Does an Accountant Handle?

Firstly, let’s handle any confusion upfront about the difference between a few common financial professionals you may have happened upon in your research.

A CPA, or Certified Public Accountant, is an accountant who passed the Uniform CPA Exam and is a licensed and registered CPA. You can determine a CPA’s legitimacy by asking for their CPA number and verifying it on a site like CPA Verify. The main differentiator between CPAs and accountants is that CPAs can legally defend a tax return if the Internal Revenue Service (IRS) has questions. All CPAs are accountants, but not all accountants are CPAs.

An accountant is a financial professional who can perform a medley of financial responsibilities like financial audits, bank reconciliation, and taxes. There are four branches of accounting that both accountants and CPAs can work in: corporate, public, government, and forensic.

Bookkeepers are more day-to-day financial specialists, helping manage a business’s books through data entry, bank reconciliation, and managing financial statements and monthly reports. They’ll typically work with daily finances as opposed to one-off projects like taxes or specialized financial projects.

So, when’s the right time to get what? You’re not technically required to have any of these as a business owner, at least when you start, but if you start hearing yourself say the following, you best be sure it’s about time to explore your options:

• “I don’t have any time to track my books this month. I feel so behind.”

• “Tax season is coming up and I’m spooked. I tried doing my taxes myself once, and it was awful. I can’t have that happen again.”

• “I have some money available to reinvest in my business to make my life easier — and I know my biggest pain point right now is my finances.”

• “I never thought I’d get audited, but it happened. What do I do?!”

• “I know my financial goals, but I don’t really know how to put them into action. I need someone else to help guide my decision-making.”

Let’s break it down. These pain points generally come about in one of three times: when a business owner needs special financial guidance, wants to delegate their financial management, or has to do their taxes. Let’s go a bit more in-depth into these.

When You’re Prepping for Tax Season (1x a Year)

If your business is still in its first year or so, chances are you aren’t thinking about hiring anyone, especially a business accountant, regularly. But those few months in early spring when you have to prep taxes? Businesses large and small can benefit from a tax accountant’s help. During tax season, tax accountants can help with everything from filing tax forms to helping with audits to organizing tax-related documents for you to better manage them in the future.

When You’re Writing Your Business Plan or Managing a Project (As Needed)

Even if you haven’t made money yet, creating a strong business plan could make or break the trajectory of your business (yet strangely, they’re not required to start a business). It’s up to you to take ownership of how you’ll plan your business.

There isn’t one singular way to write a business plan, but My Own Business Institute (MYOB) created a free business plan template that includes two major sections where a stable financial strategy can lead to success:

• Operations — this is where you’d write down how you’ll be able to run your business day in and day out, like what money you’re delegating to contractors or employees or how much you’re spending on business management tools. An accountant can help you visualize how much money is going out versus how much is coming in.

• Marketing and sales — this is where you’d write down how you’d market and sell the product or service of your business. If you’ve had a business for years but are just now writing a business plan, you might have the budget to invest in paid advertising more than you did when you started. An accountant can help you strategize the amount you’re able to invest with the money you intake.

On a Retainer Basis to Help You Manage Your Monthly Finances

When your business scales to a size where you’re able to hire multiple part- or full-time employees, a monthly accountant could help you organize your books and manage your spending, particularly if you lack time to do it yourself.

Think about having a monthly accountant like seeing a dentist. How many times have you gone to your yearly dental check-up just to be told, “you have to floss!” Well of course you haven’t flossed — you only get reminded once a year!

But what if you saw the dentist not once a year, but once a month? Chances are you’d be flossing a whole lot more, knowing that you’ll have to report to them at the end of each month with squeaky clean gums.

Just like having a regular monthly reminder to floss, having a regular monthly reminder of your finances through a monthly accountant will keep you closer to your books than you realize. Plus, tax season can be more of a breeze, as they already have the information they need ready to file. The best part? They’ll never ask about your gums. 

Accountant Costs and Considerations

Consider the different ways you offer your product or service: hourly or per project. If you offer a service, they could pay upfront or use an after-pay method if it’s available. Accountants, too, charge differently depending on the type of project.

Per project — some accountants charge a flat fee for one-time services for projects like business plan creation or tax filing.

Per hour — some accountants charge per hour for more unpredictable timeframes, like business management, payroll, or bookkeeping.

Per month — some accountants who get hired per month will work within a flat retainer-based fee. This is more common with larger budget businesses, as monthly accounting is typically needed for things like payroll. (Small businesses can usually handle these tasks themselves at their start.)

Their Qualifications and Experience

Just like anyone you hire for your business, do your research. Look them up online, ask around for recommendations, and ask them personally about their years of experience and background with businesses like yours. You can also take a look at their website and see if they’re part of a trusted firm.

The Importance of Accounting for Your Business

Sometimes, you don’t necessarily need an accountant at the start of your business. You’ll likely see the need rise the more your business scales. In the beginning, you might just need basic bookkeeping software like Mint to track minimal transactions or a bookkeeping service like doola. Allow yourself to scale by knowing it takes time to hire more team members to help you.

Advantages of Hiring an Accountant

1. Provides sound financial advice for those times in between taxes when you’re not sure how to go about your business financials. They’ve studied topics like business structure and how to scale, what to invest in, and which items to write off. Tip: while an accountant can give you financial advice, consider investing in a financial advisor who can recommend specific action steps to help your business.

2. They help with tax prep, for both large and small businesses, including filling out tax forms, knowing what business type to file as, and how to maximize tax returns.

3. They could help you in a financial situation, like if you were to get audited. Just know that only a CPA can defend a return, not an accountant.

How to Find a Business Accountant

1. Ask for referrals. There’s no better way to get unfiltered advice from friends and community members. Search through a local Facebook group or ask a friend who they use for business accounting and whether they’re happy with the work.

2. Check the directory of CPAs at the American Institute of Certified Public Accountants.

3. Ask business owners with a similar niche for their recommendations. Local recommendations will help you understand your state laws, but also consider accountants who are familiar with working with businesses similar to yours.

Small Business? Start With the Basics: Bookkeeping

If you’re just at the beginning of your business venture, it’s never too early to get started with bookkeeping. With doola specialists right at your fingertips, it’s never been easier to manage, run, and grow your business with financial solutions to scale. 

FAQs