Setting up a business is similar to high roll gambling. It costs a lot of money with no guaranteed returns. For this exact reason, most companies tend to limit their expenses as much as possible. A lot of the small business owners I know usually prioritize spending on operations, marketing, and management in that order.
Businesses often treat accountants as cost centers. The reason is that they don’t contribute directly to the business’s income generation. It is no wonder that, as a business owner, one of your biggest questions is the cost of an accountant. So, before hiring an accountant, make sure that you’re familiar with the things that may affect how much you’ll pay, such as:
Where Your Business Is Located
The rate an accountant may cost can vary depending on where your business is operating. One main reason for this is that different places may have different average wages for professionals. Hence, the overall average professional fees in the area often adjust per this rate.
Another factor would be the cost of living for the accountant. For example, it is cheaper to hire an accountant in Seattle City that it is to do so in New York City. The reason for this would be that accountants from Seattle offer lower rates as they can live comfortably in Seattle with less money than in New York.
The Nature Of Your Business
Are you selling goods? Are you a restaurant? Or, maybe, are you a financing provider? Depending on the nature of your business, an accountant may require you to pay higher fees. There are some types of companies that need highly specialized accountants. Some examples of these fields would include finance, taxes, medicine, and more.
Accountants for these types of businesses are often more expensive due to the extra training they had to undergo. The nature of your business may also affect the accuracy required of the reports. This requirement would, in turn, require more data gathering from the accountant.
The Type Of Reports That You Need
Different types of financial reports provide business owners with varying types of information. Cash flow reports show where the cash of the business went and came from. Meanwhile, Financial Position Statements offer a glimpse of the actual and current assets, liabilities, and equities of the business.
The amount of information the accountant needs may vary depending on the type of report. Accountants, owing to their training and years of preparing reports, are often very familiar with these variations and how much effort each report needs. Hence, you can expect them to offer different rates for different financial statements.
How Experienced Your Accountant Is
Unbeknownst to many, accounting is both a science and an art. Similar to artists, accountants get better with more experience. Experienced accountants often have techniques and procedures that they have accumulated throughout their years of practice.
They use these techniques to produce outputs faster and with minimal errors. They can also provide more realistic and appropriate advice based on their years of exposure in the business industry. AldarisCPA is made up of CPAs with decades of cumulative experience in various fields of accounting, years that has formed into one of the top accounting firms in the Seattle area.
Type Of Employment You Wish To Hire Them For
Accountants and accounting firms may offer different types of employment, such as long-term, short-term, piece-work basis, and more. Each employment type may vary in cost. Each employment type also has its advantages and disadvantages.
Hiring an accountant for long-term is more expensive than hiring one for the short-term. However, the benefit of the former is that the accountant can observe the business better and longer. This benefit allows them to provide more accurate reports and financial advice to the business owner.
Piece-work basis is the cheapest of them all as this is often for just a single transaction or report. However, the accountant’s knowledge is only limited to the information currently present. Simple business consultations by accountants are often piece-work in nature.
Ultimately, the amount you’ll pay your accountant would depend on the agreement between you two. By knowing the factors above, you can negotiate a more reasonable rate. However, avoid being a Scrooge, as you know how the saying goes, “You get what you pay for.”
For affordable and reliable accounting solution, AldarisCPA is only a click away. You can easily schedule an appointment with us now by contacting us now through this link.