The Cost of Hiring an Accountant for a Small Business

The Cost of Hiring An Accountant for a Small Business

INTRODUCTION ■ ■ ■ ■

It may be possible to manage some accounting tasks by yourself or through some accounting software, but hiring an accountant can be a better alternative.

Common reasons to hire accountants from India include managing business taxes and financial audits.

Besides being complex, these tasks are timeconsuming, and any error can prove to be a costly affair.

Choosing the services of an accountant for your new firm can be the best because you would have a certified professional who will have the experience to work on these processes.

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An accountant will not only assist you with the physical accounting work but also offer the right financial advice to run your business.

Owners of about 50% of SMEs or small business enterprises spend over $5,000 each year on expenses related to accounting.

It is quite difficult to calculate the exact cost of hiring an accountant for a small business because there can be many factors involved, such as the type of project you are outsourcing, the fees for specific tasks, the frequency of accounting requirements, and so on.

Some of the factors that can influence your decision to hire an accountant for a small business will be discussed in the following slides.

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IN-HOUSE Vs OUTSOURCING ■

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It is up to you to decide whether you want to hire an in-house accountant or outsource the recordkeeping tasks. This decision will definitely impact your accounting costs.

Based on your business requirements, you can hire an in-house accountant on part-time as well as full-time basis. Hiring in-house is an expensive option as you would be adding the accountant to your company’s payroll and various employee benefits.

Outsourcing, on the other hand, would mean that the accountant would be a freelancer who will work on your bookkeeping tasks whenever required. They will usually work from their own home or office and communicate with you through online messaging platforms like Skype and WhatsApp. You won’t need to put them on your payroll.

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PRICING STRUCTURE ■ ■ ■

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The cost of hiring an outsourced accountant would depend on his pricing structure.

According to the National Federation of Independent Business, the fee structures used by most accountants are: hourly, proposal-based, and fixed-fee.

Finalizing an hourly pricing structure would mean that you will have to pay per hour for the services offered.

The hourly rate can be anything between $150 and $500.

In a proposal-based fee structure, the accountant will give you an estimate of the time he would invest in a particular project in advance.

In case of a fixed-fee structure, a monthly fee will need to be paid for ongoing accounting projects.

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SKILLS â–

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Rates or fees for accountants vary depending on their skills and experience. Rates can also differ based on the complexity of a project. Some thorough research can help you find an accountant who would fit your business needs and budget.

Note that there will be accountants who charge much higher than the normal rates. This may be because they have the necessary skills to complete the tasks in lesser time and more effectively as compared to the accountants who charge lesser. Even if you hire accountants from India with higher rates, you will eventually save a lot of money by paying them on an hourly basis.

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TASKS ■ ■

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The kind of projects outsourced to an accountant also determines the cost of hiring.

This implies that you will have to pay more if you get more work done by an accountant. Also, note that complex and time-consuming work is generally more expensive.

You can hire a bookkeeper instead of an accountant, to manage smaller tasks like balancing accounts, for about $40 per hour. Accountants, on the other hand, charge a few hundreds of dollars per hour for such simple tasks.

You can also use some accounting software to eliminate the hiring cost. You will just need to maintain your records accurately before handing them over to your accountant for the final touch.

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SUMMARY ■ ■ ■

As the owner of a small business, you can work on many tasks on your own or by using easy-to-use accounting software.

However, when you intend to scale up your business, you can hire accountants from India or elsewhere as per your budget.

There is no doubt that an accountant can relieve you from the pressure of handling accounting and bookkeeping yourself, but dealing with some of these responsibilities on your own can also reduce your hiring cost.

You can consider the factors and points mentioned in the previous slides to form a good decision regarding the recruitment of accountants. Compare rates and do the necessary research before hiring an accountant who can assist in managing and growing small businesses like yours.

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