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For small businesses or entrepreneurs, it can be difficult to know when to outsource and how much you should be paying for accounting services. There is no straightforward cost for getting the services of an accountant, however, we’ve listed the factors that affect the price to help you make a decision!
- There are five accounting principles – revenue recognition, historical cost principle, matching principle, objectivity principle, and full disclosure principle.
- There are a number of accounts to be submitted such as a profit loss, balance sheet and VAT return.
- For every small business owner or entrepreneur, ensuring that your financial books are properly managed is very important.
With this in mind, you definitely do not want to drain your small business account in the quest to get your books in order. Thus, almost every small business owner should want to find out exactly how much it costs for getting professional help in managing their financial books.
Unfortunately, the answer is not straightforward, as various factors affect how much you could pay for your accounting. For example, the amount you could pay could be determined by the type of accounting your small business needs.
How Much Should A Small Business Or Entrepreneur Expect To Pay For Accounting?
One factor that will affect how much a business owner will pay to keep their financial books managed properly has to do with how many employees work in the business. For example, a small business with a working staff capacity of one to three workers can expect to pay no more than £500 ($628) for the year. (Source: accountantcosts.co.uk)
A VAT-registered business with a staff capacity of three to 10 employees can expect to pay more than £1000 ($1,257.82) per year.
Small to medium enterprises (SMEs) usually have a staff capacity of 10 or more workers and can expect to pay £500-£1000 for accounting services. However, a charge of £10 may be required to set up each payroll run, and an additional amount of £4 for each payslip on each run. Note, however, that all the prices indicated come with VAT charges.
What Does An Accountant Do?
Accountants are professionals who are responsible for keeping as well as interpreting financial records. An accountant also has responsibility for a wide range of accounts or finance-related tasks. Such tasks can be for individuals or large businesses or organizations.
But that’s not all. Over the years, an accountant’s duties have grown to cover other tasks such as transaction reconciliation, profit, and loss, balance sheets, VAT registration, payroll, etc.
Daily roles and duties of an account may vary by organization and position. However, some of the common tasks of an accountant include the following:
- Making sure that all financial documents are accurate and are in compliance with all required laws and regulations.
- Preparing and ensuring the maintenance of all important financial reports.
- Preparing all tax returns and making sure that every tax is properly paid and on time.
- Evaluating and reviewing all financial operations to recommend best practices, identify problems, plan solutions, and help the company run efficiently.
- Accountants also offer guidance on how to reduce costs, increase revenue, as well as maximize profit.
- They are also required to make risk analysis assessments to conduct forecasting.
In addition to everything already mentioned, every accountant is legally obligated to avoid negligence and act in all honesty.
When Should A One-Man Band Business Outsource Their Accounting?
For a one-person band, timing is of the essence. As the sole-operator of your business, you need to be certain that you can afford the services of a professional “bookkeeper”. As indicated in the introduction, you do not want to drain a huge chunk of your business account when it is not financially wise to do so.
However, once a one-band business owner is certain that he/she can afford a professional service, they need to outsource their accounting immediately. This will enable them to focus their time and energy on growing their business.
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No business owner wants to spend the greatest part of their working days dealing with accounting issues. That is why it is very important to invest in a professional accounting service. For very simple accounting work, one can easily resort to accounting software to handle those. But when it comes to the difficult accounting tasks, it is important to hire an accountant to assist you. To keep your accounting costs on the right track, you need to find the right balance between money spent and time.
Do you need accounting solutions for your small business? Feel free to read our other articles on accounting.
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