How much does an accountant cost

How much does an accountant cost?

The job of an accountant is far beyond bookkeeping and recording transactions. It is an evaluation technique that:

Reflects the business performance

Accounting is a process of recording transactions conducted by a business. It shows the position of a business, depicts its profit or loss position, and proportionate real growth.

Identifies discrepancies

Accounting goes a step further in discovering functions and areas where goals could not be met with. It unleashes deviations from set goals with the aid of which an entrepreneur can refresh his future planning.

Conducts backward engineering to locate deviations

The specialized function of accounting includes intense evaluation to determine the accurate reasons for deviations.

Strengthen future strategies

Given the reasons for shortcomings, an entrepreneur has an opportunity to rejuvenate his master plans and strengthen future business strategies.

As business flourishes, one feels an urgent urge to upkeep finance functions extra support. Therefore, the finance procedure may be earmarked as an end function for an assessment period but the first step towards future strategy building.

Accounting conventionally includes a range of services viz:

  • Bookkeeping and VAT Return
  • Management of accounts and Annual accounts
  • Corporate tax return
  • Personal tax return
  • PAYE & CIS Payroll
  • Advice on tax planning, Business Plan and budget
  • Expert opinion on financial planning & control

Cost Determinants of an Accountant

To relish the essential services of resolute accounting, one needs to hire an accountant depending on:

Business model

When a business aims for accelerating growth and seeks diversification or expansion, an urgent need for outsourcing the function of accounting rises. An entrepreneur must relieve himself to concentrate on the future development of the business.

Nature of business

A business that nurtures numerous transactions regularly soaks the entrepreneur’s time in routine accounting matters. In such cases, an accountant must be immediately appointed to procure valuable time for business growth and advancement.

The volume of turnover

The higher the turnover, the greater are the profits. To promote consistent business growth and ensure a big chunk of gain, you must boost turnover.
This requires a focused strategy and meticulous implementation of plans. So be it, let the entrepreneur focus on promotion and handling of turnover whereas allowing the accountant do the stereotypes of record-keeping and bookkeeping.

Scope of business (local, regional, national, international)

The scope of business defines the requirement of an accountant. The local-level business activity may involve a small scope of operations and may have fewer employees. The entrepreneur may manage accounting functions by himself.

If the boundaries of business have been expelled at a regional or national level, the entrepreneur will seek the assistance of an accountant.

When the business sees a broad horizon across nations, a specialized service provider must.

Services required

In case a firm is satisfied with just conventional accounting services, then the cost of appointing an accountant will be considerably low. On the contrary, if you need specialized services, the accountant needs to get handsome money.

Generally, conventional services include posting transactions, filing returns, monthly payrolls, annual accounts, etc. Special services would add more flavours and costs above the primary charges. Such value-added services would include tax planning, financial planning, investment advice, raising and investing of capital, etc.

Size of business (small, medium, large)

The scale of operations is yet another criteria for determining the need for an accountant. When the operations are local or the number of transactions is small, an entrepreneur may handle accounting functions by himself or opt for conventional services from a hired accountant. When the business size is medium, the entrepreneur seeks special services from an expert accountant.

A business firm with a large operation scale will invariably need an accountant’s special services.

How much does an accountant cost per hour?

Accounting is a specialized profession and not merely a task where remuneration is calculated based on the quantum of work. Most business firms pay an accountant a monthly fee. Several corporate houses may also reward them with an annual package and incentives for motivation. However, one may also pay an accountant hourly or individual services. Following are some criteria that determine an accountant’s remuneration on hourly terms.

*Services Scale of business Fees(per hour)
Basic accounting Small £25-£35
Specialized services (tax planning, etc.) Medium £125-£150
Intense specialized services (financial planning, etc.) Large £200-£400
*Scale of business Turnover Fees(per hour)
Small Up to £50000 £150
Medium £100000-£150000 £400
Large £250000-£300000 £600
*Number of employees Up to 100 £200(per hour)
Up to 400 £500(per hour)
500-700 £700(per hour)

Thus, one can assess that the accountant’s hourly rate is higher if you need specialized accounting services besides the conventional functions.

Also, paying better from the pockets to an entrepreneur is affordable when the business turnover is higher.

More business profitability inclines for greater competency of accountants and a more extensive cuisine of services provided by the accountant.

Another vital variant determining an accountant’s remuneration is the number of employees in an organization. The human resource requirement is naturally more significant when the size and scope of the business are considerable.

The entrepreneur can diligently work upon a functional matrix of the above factors to have the services of an accountant suitable to the business.

Cost of accountant for small business (FAQ)

We have witnessed that there are different criteria to reward an accountant. In addition, small business firms have particular queries and requirements related to accountants.

Why do small business firms need an accountant?

Generally, small firms believe that they have a comparatively narrow scope of operations, and so an accountant adds to the cost of business, but this is a tunnel vision approach. The appointment of an accountant relieves an entrepreneur from routine accounting jobs and finds time to expand or diversify business instead.

An expert tip can also go a long way in tax planning, designing financial strategies, etc. So let us not treat as cost of an accountant as an extra cost but basic service complimenting business growth.

What does my accountant expect from me?

A business firm expects numerous services from an accountant, but an accountant also poses certain expectations from an entrepreneur.

  • Timely record-keeping of transactions
  • Maintaining appropriate books and registers to record transactions.
  • Filing of documents chronologically for sequential arrangements of record-keeping
  • Procurement of all receipts, vouchers, etc.
  • Maintain registers to record the daily flow of cash in and out of business.
  • Providing the books, registers, statements to the accountant as and when demanded.

Up-to-date record keeping facilitates accounting procedures and aid an accountant to complete his duties efficiently in the stipulated time period.

What does a small business firm expect from an accountant?

A small business entrepreneur, when appoints an accountant, pays a piece of his hard-earned money to him. The business firm has a set of expectations from the service provider.

They expect accurate accounting that reflects proper business health, advice on tax planning, identifying deviations in business activities, financial planning &control tips, precise tax filing, vat returns etc. An entrepreneur would not reward an accountant reluctantly if his expectations are met.

What are the job specifications an entrepreneur should look for in an accountant?

An entrepreneur would look for the mandatory qualifications required to qualify as an accountant. There are also some other specifications that make a selection of an accountant full proof.

The accountant must have enough experience to support the credibility of the services provided. The service provider must have sufficient staff to render prompt services. An easily accessible accountant is like an emergency help to resolve tax issues, monthly pay-offs, financial planning, etc.

The bottom-line summary is that the service of an accountant is not a cost but an essential aid that boosts the business to the next level. It is that cherry on the cake that adds value to the cuisine.

How frequently should accounting reports be discussed with the accountant?

Although accounts are generated for an assessment year, it is advisable to frequently review and discuss accounting reports with the accountant. Likewise, an entrepreneur must periodically sit with the accountant to grab a bird’s eye view regarding business growth.

This helps him to inculcate timely corrective action before the assessment year-end and cope with contingencies. The period of such assessment review meets maybe every month or once in three months (quarterly), depending on the nature and volume of business transactions.

Should an accountant be replaced often?

Generally, there may be times when an entrepreneur may not be satisfied with accounting by the accountant. The accountant may not be rendering prompt or timely services, reports may include errors, missed out deadlines of filing returns, etc. Hence, the entrepreneur may prefer to discontinue the services and look for another option in such a case.

However, in case of minor errors, it is advisable to discuss the issues with the accountant and rectify them. In case of repeated discrepancies, an entrepreneur may opt for replacement.

It is generally advisable to continue with the same accountant for the long term. This will help the service provider to understand the intricacies of business better. In addition, the accountant will be able to absorb the long term vision of the entrepreneur better and guide him towards the goals.

Would an entrepreneur lose control if the accounting is done by an outsider?

Actually, “NO”… one gains more control over financial functions. This attributes due to up-to-date financial statements at your fingertips. In addition, an entrepreneur will have more time to focus on other detailed issues for growth and advancement.

Can other people access the data of the firm?

No one can access the firm’s data without the permission of the entrepreneur. Accounting firms offer full-proof security regarding data of business firms.

It counts into the ethics of accounting business to ensure such privacy and security of firm’s data. Therefore, even as data travels through the internet, it is password protected.

How much time does a firm save if an accountant is appointed?

Generally, even a medium scale business requires at least two-three hours a day to upkeep accounts of the business. A firm operating on a large scale may still need more regular time.

  • You can utilize this to save time more productively towards further decision-making and creative issues. The accountant has a contractual obligation to ensure continuity of services.

What books must be maintained by the entrepreneur?

The accountant insists that a firm maintain certain basic books that assist in accounting functions.

  • Journal – Accounting entries are recorded in the journal. Thereafter transactions are posted in the general ledger.
  • General ledger – It is a book where the transactions are recorded in the debit–credit pattern from the primary entries recorded in the journal.
  • Cashbook – All the receipts and payments related to cash must be recorded in this book. You must make chronological recordings of all inflow and outflow of money in this book for ledger postings.
  • Sales journal – It includes all the entries regarding cash and credit sales chronologically.
  • Purchase journal -The purchases of business, whether in cash or credit, need to be recorded in this book.

Are you finding the right bookkeeper?

The right bookkeeper for a business possesses knowledge and expertise in year-end accounting proceduresAlso, the accountant must have a prompt and experienced team to deliver results accurately and within the stipulated period.

Conclusion: Accounting Cost

Thus, If you are into business-real time business, then accounting is a yardstick of success and a stepping stone to planning. In the short term, managing accounting personally may seem cost-saving.

Still, in the long term, it saves time and money and gives enough space for the entrepreneur to be intensely creative and focus on critical issues.

“To hire or not to hire” is the question in the frame. And the conspicuous answer to this dilemma is that hiring an accountant will resolve many problems of the entrepreneur and is an essential service in present times.

You May Like:

Accounting Fees for Small Business in 2022

Year-end Accounting Checklist for Small Business

Inhouse VS Outsourced Accounting Which is better?

  • error: Content is protected !!