How Much Will A CPA Cost (And Save) Your Small Business?

There are numerous instances where a Certified Public Accountant (CPA) can help your small business. From tax preparation, advisory, submitting your quarterly estimated taxes to the IRS, and even bookkeeping services, a CPA can take on the difficult financial tasks that tie you up and slow you down. But not every CPA and CPA firm is the same, and finding the right one for your business can be a challenge.

If you've been evaluating various CPAs for your business, you know how difficult the search can be. And that's before cost is factored in! Use this guide to help you determine how much a CPA costs, along with other helpful information that will help you zero in on the CPA that's right for you. 

How Much Does A CPA Cost?

What you'll pay for CPA services will depend on numerous factors, with no single factor as important as your business needs. Whether you only need a CPA for a couple of hours a month or more regularly, learn more about CPA billing scenarios here.

• Hourly rate. If you only need a CPA for a few hours each month instead of full-time, using a CPA on an hourly basis can be a sensible option. CPAs typically charge between $150 to $400 per hour for their services. 
• Contracts and retainers. Hourly charges can pile up fast, especially if you have more substantial accounting needs, making a contract or retainer a more attractive option. Like hourly fees, contracts and retainers have a wide pricing spectrum. However, you should expect to receive more preferential pricing when you retain or enter into a contract with your accountant.   
• Flat rate. Virtual outsourced firms can offer different pricing plans, including flat-rate for a couple of hundred dollars per month on average. This is particularly helpful if you have complex, time-consuming financial work.  
• Seasonal. Some CPAs might offer their services on a seasonable basis, with the most popular being tax season. Fees can vary depending on the services rendered and their complexity and might start at $1,000 to $2,000 per project. 

Common Challenges When Hiring A CPA

You might encounter common challenges while searching for the right CPA for your small business. These include: 

• High demand for the most skilled professionals. It's possible that you find the right CPA for your needs, but they're at capacity in general or due to seasonality. If you're unable to use that CPA's service, ask that they refer you to another capable CPA.   
• Lack of benchmark or background on fair pricing. If this is your first time hiring a CPA for your business, the wide spectrum of pricing can be dizzying and can make pinning down the average cost of a CPA difficult. Research and talk to other local business owners to form a benchmark for fair CPA pricing in your industry and region. It's important to understand that fair pricing in Kansas will differ from fair pricing in New York if you work with a local CPA. 
• Determining fit based on a professional’s previous experience. If you've found a CPA you like but still have questions about their experience, research and read reviews. There are Google reviews and ratings you can browse on Trustpilot that will help create a picture of the prospect's previous experience. 

How Much Can A CPA Save Your Small Business?

While refund amounts vary, your CPA's goal should be to minimize your business's tax burden. Once you're established, the annual savings can be substantial. For example, 1-800Accountant saves the small businesses we work with over $12,000 on average annually, allowing them to reinvest that money back into their businesses.

Areas where your prospective CPA can save money for your business include: 

• Preparing your tax return and leading tax planning initiatives
• Tax deductions, credits, and benefits
• Reduction in liabilities
• Financial planning

While saving money is a primary reason you would use a CPA, there are also intangible benefits. Most small business owners will attempt to address financial tasks initially on their own, which can be time-consuming even if you know what you're doing. Great CPAs save time that you can devote to building your business while also giving you peace of mind knowing those important tasks are handled properly. 

What Services Can A CPA Provide?

Some CPAs are generalists, while others specialize in certain areas of accounting. When it comes to services for your small business, your prospective CPA should be able to address the following tasks.

• Tax filing
• Quarterly estimated taxes
• Generating financial statements
• Financial forecasts

Tax Preparation: CPA vs. Tax Preparer

A tax preparer and CPA can prepare and submit your business taxes on your behalf. But which is right for your situation? A CPA typically has more expertise and education than a tax preparer but is also more expensive for the financial services they provide, such as preparing and submitting your business tax return. A tax preparer might be the better choice if your business taxes aren't overly complex.

How To Hire The Right CPA For Your Small Business

Understanding your costs is an important step in the process of finding a CPA. Now, it's time to speak with professionals who specialize in your state and industry. Talk to the tax professionals at 1-800Accountant, the leading virtual accounting firm for American small businesses.

Whether you need business tax preparation services, tax advisory, or any of our professional accounting services, we have affordable flat-rate pricing solutions to help your business stay compliant. Schedule a quick consultation – usually 30 minutes or less – to learn more.