Every small business owner needs an accountant for business taxes, tax preparation, and day-to-day operations. However, many small business owners believe that accountants are too expensive. So, what exactly is the cost of an accountant for a small business?
The truth is that many variables go into assessing the cost. We’ll take a look at these different variables, explain how accounting costs are calculated, and what exactly should a small business owner expect from their accountant.
But first, let’s explore why you even need an accountant in the first place.
Can You Do Your Own Accounting and Bookkeeping?
Many small business owners do their own accounting and bookkeeping. Some owners enjoy bookkeeping, while others do it to gain a better understanding of their business.
So, while you can certainly do your own accounting and bookkeeping, the question to ask yourself is whether your time as an owner can be better spent running and growing the business rather than doing an activity like accounting that you can get expert help with doing.
Now, let’s look at the different accounting and bookkeeping procedures your business needs to get done.
Accounting Tasks for Small Businesses
Here are some of the typical accounting and bookkeeping tasks that a small business needs to have done.
Experts Who Can Help
Bookkeepers and accountants are the professionals who can help you with your business’s accounting.
Many times, the same person provides both bookkeeping services and accounting services.
Professional Certifications
Several certifications are given to accounting professionals who meet certain education and experience requirements and pass an exam. Keep in mind, though, that there are many highly qualified and competent accountants and bookkeepers who don’t have a certification.
Professional certifications are just one piece of the puzzle you should consider when evaluating whether an accountant or bookkeeper would be a good fit to work with your business.
Here are the most common certifications:
Certified Public Accountant (CPA). The CPA license is considered the gold standard certification for accountants. To obtain a CPA license, an accountant must pass the CPA exam and then acquire a certain number of hours of professional work experience while supervised by another CPA.
After obtaining a CPA license, the accountant must complete 40 hours of continuing education annually.
CPAs can sign audit reports and represent taxpayers in front of the Internal Revenue Service (IRS).
Each state has its own board of accountancy that regulates and oversees the CPAs practicing in that state.
Chartered Accountant (CA). The CA license is equivalent to the CPA license in the United States. The CA license is recognized in the following countries:
Enrolled Agent (EA). An EA is the gold standard for an accountant who specializes in taxation. Like a CPA license, an EA has unlimited rights to represent taxpayers before the IRS after passing an exam.
Certified Public Bookkeeper (CPB). There are several bookkeeping certifications available in the United States that the National Association of Certified Public Bookkeepers governs. In addition to the CPB license, a bookkeeper can obtain certification as a Certified Payroll Specialist, a Certified QuickBooks Advisor, a Certified Accounting Paraprofessional, or a Certified Accounting Analyst.
What Kind of Accounting and Bookkeeping Help Does My Small Business Need?
It can be confusing to decide what kind of accounting and bookkeeping help you need for your business. Here are some tips to help you decide who you should hire:
A part-time employee or contractor. It’s a good idea to hire a part-time bookkeeper or accountant as soon as you start your business, even if you only need 1 to 2 hours of help each week, so you can focus on growing your business instead of crunching numbers.
A full-time employee. You probably don’t need a full-time bookkeeper or accountant until you reach $1 million in annual revenue or around 30 employees. Until this point, you most likely won’t have enough work to keep a full-time bookkeeper busy (although there are exceptions).
So, How Much Does an Accountant or Bookkeeper Cost?
When you hire an accountant or bookkeeper, either full-time or on a contract basis, you’re paying for two things: That person’s certification and credentials and the number of hours required to complete the agreed-upon work.
For a bookkeeper, hourly rates can average between $30 and $80. And for a CPA, hourly rates can fluctuate between $125 and $300.
To help keep the overall cost of an accountant or bookkeeper to a minimum, consider the following tips:
Find Your Small Business Accountant Today
Remember that all your accounting and bookkeeping work needs to be done by someone and that your time as the owner is better spent growing your business, not entering transactions into your accounting system’s software.
Remove the guesswork from all your accounting and tax work by scheduling a free call to learn how 1-800Accountant can make small business accounting easy and affordable.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.