According to one study, 40% of business owners spend over 80 hours each year on tax preparation.
If you spend a lot of time on accounting tasks, you might be thinking about hiring an accountant. However, before you do this, you may want to learn more about the costs of working with an account.
Read on, and you’ll learn more about how much it costs to hire an accountant. If you’re spending too much time on bookkeeping, you’ll soon find out if hiring an accountant is a viable option for your company.
How Much Does It Cost to Hire an Accountant?
Based on one report, you can expect to pay around $150 per hour if you’re going to hire an accountant.
However, it’s important to note this is an estimate, and the amount you pay can be quite different from that sum. You’ll generally find these variations come down to the industry you’re in and how complicated it is to do your accounts.
If your accounts are complicated, it will take a long time to do your accounts, and thus you’ll pay for more hours.
If you’re in a niche industry, you might need to work with a specialist accountant. Yet, working with a specialist can be expensive, which can drive up the cost of hiring an accountant.
In any case, at this point, you might be questioning if there are any benefits associated with hiring an accountant. You may even be wondering what you can do to make things cheaper when it comes to doing your accounts.
If that’s the case, don’t worry, as we’ll cover those topics in the rest of this post.
What Are the Benefits of Hiring an Accountant?
Now that you’re aware of how much an accountant can cost, you may want to learn more about how an accountant can actually benefit you.
After all, what do you get in return for spending all this money on accounting services?
Well, one of the good things about hiring an accountant is you can be sure your taxes are filed correctly. As a result, you will have less anxiety when tax time arrives, as you won’t have to worry about doing things the wrong way and getting a fine.
In addition to this, an accountant can help you spot opportunities that might allow you to lower your tax burden. That’s because accountants understand the tax system, and so they’ll know how to process your taxes in the most efficient manner.
Note that your ability to save money will often depend on whether you’re working with a specialist.
For instance, suppose you have a real estate business, and you want someone to do your accounting. If you work with a specialist real estate accountant, you may save a lot of money on taxes as this person might know of some ‘exemptions’ you can benefit from.
A ‘generic’ accountant might not know of such exemptions simply because they don’t have a lot of experience with the real estate industry.
How Can You Lower Your Costs?
You might like the idea of hiring an accountant, but you might not like the idea of spending a lot of money. This is perfectly normal, and luckily, there are some ways you can reduce accountant fees.
At the most basic level, you should do everything you can to keep good financial records that are easy to understand. This is an important step because you usually pay accountants by the hour.
Thus, if you provide them with a bunch of unorganized documents, it will take them longer to do their job. This will then result in a larger bill, as they will have to work a greater number of hours.
If you want to take things to the next level, you may even want to consider investing in specialist accounting software.
Such accounting software will track all the transactions taking place in your business. This software will then let you export these transactions into an Excel document, and you can then give this document to your accountant.
If you’re going to use accounting software, you should ask your accountant which option works best for them. If you pick a software solution they’re used to, it may be easier for them to work with the files you provide, and this could then speed things up.
Should You Hire an In-House Accountant?
If you have a medium-sized business, you may be at the point where you have the option of hiring an in-house accountant.
This can be a good solution if you have highly complicated accounting requirements. That’s because if you have an in-house team member, they will be deeply familiar with your accounts. Following this, they will be able to quickly help you with any accounting questions you may have.
This is often preferable to working with an external company, of whom you’ll have to brief every time you have an accounting question.
In any case, bringing on an in-house team member can be more expensive than hiring an external accountant. This is because you’ll have to pay for all the expenses associated with bringing on an employee. If you hire someone externally, you only have to pay a fee each time you consult with them.
Will You Spend Money on Accounting Services?
If you hire an accountant for your business, you can reduce the amount of time you spend on bookkeeping tasks.
Hiring an accountant can be quite expensive, so this isn’t going to be an option for everyone. Yet, you need to consider what your ROI will be if you spend money on accounting services.
After all, if you work with an accountant, you may then have lots of spare time you can put into your business. If this leads to you winning more clients, you could argue that hiring an accountant is a good investment for your company.
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