You should manage the accounting services for your small business. It is very important to determine the needs of a business. The accounting services which you may need are:
- A business Bookkeeping service
- Accounting service
- Services of a certified public accountant
You can choose according to your business needs and demand. The amount you pay for hiring any of them depends on the specialty and work you demand from them. The average cost of an accounting professional for accounting tasks in small businesses varies in different situations.
A bookkeeper performs the tasks like recording business transactions, payroll processing, invoicing customers, keeping financial records, and balancing your accounting books.
This article covers:
- How Much Does a Bookkeeper Cost?
- What Does a Bookkeeper Do?
- How Much Does an Accountant Cost?
- What Does an Accountant Do?
- How Much Should a CPA Cost?
- What Does a CPA Do?
- How Much Should a Small Business Spend on Accounting?
How Much Does a Bookkeeper Cost?
According to the ‘Payscale’ website,’ the average charge for a bookkeeper is $16.67 per hour. A bookkeeper’s rate is low than a professional accountant’s because it does not require any formal training for a bookkeeper. Small businesses can easily hire a bookkeeper if their budget is low.
What Does a Bookkeeper Do?
The main task of a bookkeeper is to manage data. It includes recording all the company’s transactions, whether it’s an income or expense transaction. A bookkeeper is also responsible for handling the online accounting software that consists of financial information.
Other tasks of a bookkeeper are:
- Training employees on expense entry procedures
- Ensuring the right usage of bookkeeping processes
- Verifying the company’s ledger balances
- Identifying the errors (if any)
- Handling bank deposits
- Assisting the company’s accountant
How Much Does An Accountant Cost?
An accountant occupies a higher position than a bookkeeper in a company. Bookkeepers usually work under the assistance of accountants. If you are the owner of a small business, you should keep in mind that hiring an accountant depends on experience, qualification, and work.
Rates for highly professional and competent accountant are quite higher than the one who is a fresher. There is no set standard for an accountant’s salary; you can pay between $30 to $100 per hour, depending upon the factors mentioned above.
What Does An Accountant Do?
The responsibility of an accountant is to provide financial consultancy to the business owner for managing business finances.
Other responsibilities include:
- The legal implication of pre-planned courses of action
- Filing tax returns
- Generate financial statements
- Ensures the authenticity of financial reports (as per government regulations)
How Much Should a CPA Cost?
CPA stands for ‘Certified Public Accountant.’ CPA occupies a higher position than an accountant. Unlike an accountant, CPA is the most highly competent accounting expert. Charges for CPA also vary with experience, work, and competency. You can pay nearly $100 per hour, depending on different factors.
CPA is not an ordinary accounting degree; it requires a lot of hard work and effort.
- A specific education according to the work requirement
- Complex four-part exam
- Additional educational courses
A CPA needs to keep up the educational standard for maintaining the designation.
What Does a CPA Do?
The major responsibility of a CPA is to report and analyze the financial data. He manages all the company’s accounting policies and procedures, including:
- Bookkeeping methods
In the absence of a CPA, an accountant needs to deal with all these responsibilities.
The areas of specialization for CPA are:
- Forensic Accounting
- IT Auditing
- Taxation Specialization
- Personal Financial Planning
- Managerial Accounting
A CPA can communicate with IRS as a company’s representative. He can also act as a tax-payer and can prepare audited financial statements.
A general accountant can not perform all these tasks.
How Much Should a Small Business Spend on Accounting?
If you are running a small business and want someone to manage your accounting data and processes, you can decide it depending upon the type of work you need.
If you just need to record your financial data, you can simply hire a bookkeeper for this purpose.
If you need any consultancy at the time of tax payment, you should hire an accountant for that purpose.
If you are working in a complex market, you need to hire a CPA who specializes in that area.