What Are Start Up Business Accountant Fees?
Start-up business accountant fees refer to the costs a newly-established business incurs in order to manage its accounting activities effectively.3 min read
2. Hiring a Financial Professional
3. Keeping Accounting Costs Low
4. Cost of Accounting for a Small Business
Start-up business accountant fees refer to the costs a newly-established business incurs in order to manage its accounting activities effectively. Such costs can be very different from one business to another, depending on the amount and type of accounting services needed. As the owner of a startup or small business, you will most likely not require an elaborate accounting system, so you can expect your accounting costs to be lower than those of larger companies. If you need to handle complicated accounting tasks from time to time, you can hire an accountant on a project-by-project or hourly basis.
Understanding a Small Business' Accounting Costs
Accounting costs can vary greatly. Even businesses of the same size and in the same industry may have very different accounting expenses. Such expenses are categorized under your business' overhead costs, which are expenses that do not directly contribute towards profit generation. Although they do not turn into cash, overhead expenses are necessary in order to keep your business running. An example of an overhead expense is rent.
It is essential to have an effective accounting system, so that you can maintain accurate records of your business transactions. While you should try to keep your overhead expenses low, you should not cut corners when it comes to accounting. As such, you should look for an accounting solution that suits your business needs and budget. Your accounting fees are largely dependent on how frequently you use accounting and bookkeeping services. A good accounting expert can help you maintain proper records, file taxes, and interpret reports.
Hiring a Financial Professional
The accounting fees for a startup or small business vary depending on the type of financial professional hired. A bookkeeper can help with tasks such as:
- Recording transactions
- Invoicing customers
- Processing payroll
- Balancing your books
A professional accountant or a Certified Public Accountant (CPA) can perform more advanced tasks such as:
- Generating statements
- Analyzing costs
- Filing business taxes
- Providing advice
Bookkeepers and accountants typically charge an hourly fee. The cost of hiring a financial professional differs according to each small business' unique accounting situation. Since bookkeepers perform less-involved tasks, they often charge lower rates than accountants. Your accounting fees depend on the accounting work you need the financial expert to do. You can expect your monthly accounting fees to increase as the tasks get more difficult and more services are required.
Keeping Accounting Costs Low
You can keep your accounting fees low by handling some of your financial tasks yourself. For instance, you can use online software to process payroll and record transactions. All you need to do is enter the amounts and the software will calculate the totals. Some payroll software applications enable an accountant to provide payroll processing service at a minimal additional cost.
There are many different types of accounting software to choose from. Some of them cost a lot of money, while others may require just a small monthly fee. If you wish to add more features to a software solution, you have to be prepared to pay more.
A startup or small business does not need to have an elaborate accounting program. A basic software application that is able to streamline the accounting process and record transactions quickly should suffice. From time to time, you can seek the assistance of a financial professional to handle more difficult accounting tasks. You will probably have to hire an accountant more often as your business grows.
Cost of Accounting for a Small Business
Accounting costs depend on the nature and size of your business and the bookkeeping methods you need. While every business has different accounting costs, you can get a rough estimate of your costs by looking at the average fees and costs for small businesses. A small business nonprofit organization called SCORE released statistics on the accounting costs of small businesses in 2015. According to the statistics, most owners of small businesses spend a minimum of $1,000 a year on internal expenses, accounting administrative costs, and legal fees. The breakdown of the data is as follows:
- 23 percent of small businesses spent $1,000 or less
- 31 percent spent $1,000 to $5,000
- 18 percent spent $5,000 to $10,000
- 12 percent spent $10,000 to $20,000
- 16 percent spent $20,000 or more
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