Accounting Cost For Small Business: How Much An Accountant Costs Your Small Business

Business owners are fully aware of the importance of accounting, but how much should they expect to pay for it? A business owner must understand how much, on average, business accounting costs. After all, accounting, as an integral part of a business, is something not to put aside.

To answer the above question, we’ll need to look at small business accounting as a process. We’ll also look at when it becomes necessary to hire a small business accountant or a bookkeeper – someone to do the bookkeeping and accounting for you. Ultimately, we’ll summarize the benefits of implementing a well-oiled accounting structure, outlining the accounting fees and small business expenses that owners need to keep in mind.

So keep reading to learn more about small business accounting cost:

1. What are the peculiarities of bookkeeping for small businesses?

2. How much can accounting cost small business owners?

3. Should I hire a small business accountant for my company?

What are the peculiarities of bookkeeping for small businesses?

Everything you need to know about small business accounting starts and ends with your business bank account. Double-entry bookkeeping, transaction recording, reconciliation, getting invoices paid and bills covered – the entire process is centered around making sure that your bank account is in balance with your books records. That’s why opening a business bank account is a significant first step. 

If you sell services, most of your accounting will revolve around transactions. If you’re in retail, you’ll have to pay a lot of attention to keeping the inventory clean – it’s a whole separate branch of science. If the word inventory alone frightens you, I recommend reading a detailed how-to accounting guide for retail stores.

How does the small business accounting process go?

1. You record transactions in your books. An increasing number of business owners don’t do it by hand and can record the transactions themselves – without using the help of a small business accountant or bookkeeper – by subscribing to accounting automation software like QuickBooks (starting from $25 a month) or Synder, which eliminates the manual data entry for online transactions. 
2. After all of the transactions have been recorded, you can reconcile your accounts, which is very important for maintaining an overview of your financial health, and getting ready for the tax season.
3. When transactions have been recorded and bank accounts reconciled, you can generate important financial reports, such as the balance sheet and profit and loss statement.
4. Invoicing and paying bills, as well as recording the entire process is also a part of the bookkeeping cycle and happens regularly (depending on the type of business).
5. If you have employees, payroll is a big part of the bookkeeping cycle. 
6. Generating correct tax reports, paying the taxes, and maximizing the deductibles is one of the most important imperatives of taking care of your business’ accounting process, as it allows you to keep going, avoid IRS fines, and save as much of what you’re entitled to as possible. 

In short, there’s a lot of routine bookkeeping work that needs to be done for the accounting to unfold. What are the monthly bookkeeping costs you need to anticipate?

How much can accounting cost small business owners?

Actually, there’s no straightforward answer. The cost of accounting might greatly depend on how you keep your books and the character of your relations with accounting specialists. The cost of using accounting software and doing the bookkeeping yourself, turning to an accountant only to deal with small business taxes, will be different from the cost of outsourcing your bookkeeping and accounting tasks to a CPA firm or hiring an accountant part or full-time.

However, we can break down some costs to give you a clearer picture of what your small business accounting expenses can be.

Cost of accounting software

If you run a small service-based business, you might start with a subscription to an accounting software with an easy interface that you can use on your own. Additionally, guided by small business financial coaching, you might need a solution to help you gather transaction data from your sales channel or a payment processor, such as Synder Sync, for instance, not to get buried by manual data entry, have accurate records in the books, and automate bookkeeping. The total recurring accounting fees for a small business this way look as follows:

• QuickBooks Online subscription – from $30 a month;
• Synder subscription – from $11 a month.

Learn more about how Synder’s features can benefit your e-commerce business – book a seat at our webinar.

Average business accountant fees

Alternatively, if you don’t want to deal with bookkeeping or have no time for it (e.g., your billing rate x the time you’d spend on bookkeeping is higher than bookkeeper fees), you might want to delegate the task. At this point, you can get a bookkeeper either by outsourcing the bookkeeping needs or hiring one part-time or full-time. This way, you might expect your small business accounting fees to be around as follows:

• Outsourcing the bookkeeping – from $500 a month,
• Part-time – from $500 a month + benefits,
• Full-time bookkeeper – from $3000 a month + benefits.

According to the SCORE report, average accounting fees for a small business end up being around $1000-$5000 a year. 

When you seek accounting help for a specific purpose, the average you can expect to pay is around $146 to $457, according to Investopedia.

If you run an inventory-based business, you might want to invest in a sophisticated POS that will enter the sales in your accounting software. They vary drastically by the type of business, but services such as Square and Shopify could be a good start. Consult the websites further for a fitting quote.

If you have employees, it’s advisable to hire a bookkeeper at least part-time to manage the payroll.

💡Costs in check? Great! Now, explore the nuances of product mapping in accounting to ensure every financial detail is perfectly aligned.

Should I hire a small business accountant for my company?

The short answer is yes, it’s recommended.

On top of the bookkeeping cycle, many small businesses need the help of an accountant or a CPA. Apart from startups seeking funding, who will need professional accounting help in order to have all necessary reports to present to their potential investors or to apply for a small business loan, many small businesses might only need to hire an accountant once a year, in advance, to help prepare their taxes. It’s also necessary to seek help from an accountant when you’re just starting out and choosing the correct legal type fitting your business.

Besides, there are more reasons that absolutely justify looking for the help of an accountant or bookkeeper. They are as follows:

• Financial data management;
• Compliance with regulations;
• Financial analysis and recommendations;
• Cash flow management.

And while you might cover some of these responsibilities, a good rule of thumb is that every time you’re dealing with the government – hire an accountant.

How much can an accountant cost a company: summary

Even the smallest businesses need to think about bookkeeping and accounting for their business. In order to arrive at the tax date fully prepared, it’s necessary to take care of the bookkeeping regularly (starting from $45 a month), and it’s beneficial to seek help from professional accountants every time you deal with the government (from $150 an hour). 

Even though these costs might seem quite high, you’ll thank yourself for minimizing your tax bill by recording all deductible expenses on a regular basis, avoiding audits, and maintaining a clean financial record necessary to keep your businesses running and growing for years to come.