Average Cost of an Accountant

Average Cost of an Accountant | Accounting Smarts
Charles Hall

Last updated by

Charles Hall


June 10, 2022

The average cost of an accountant is a complicated estimate because of the broad range of services offered.

Every small business needs to manage its financial books. The majority of business owners find it challenging to manage and keep up on the records of their business transactions. Others lack the skills and knowledge of accounting. Therefore, business owners are forced to hire financial experts that offer accounting services.

The big question asked by most small business owners is, "What is the average cost of an accountant for a small business?" The U.S. Bureau of Labor Statistics indicates the average accountant fee is about $40+ per hour. Other surveys indicate a small business will spend $1,000 to $5,000 for various administrative accounting services per year.

The average cost of an accountant is a complicated estimate because of the broad range of services offered. Just consider the following benefits you could receive from an accountant:

  • Data entry
  • Maintaining correct records and account reconciliation
  • Filing taxes and compliance
  • Preparing reports and interpreting financial statements
  • Payroll preparation and reporting
  • Advice on budgeting and achieving goals
  • Auditing services
  • Process and procedure implementation

This broad list should give you an idea of the wide variety of fees you might be quoted. It differs in all unique situations. Despite a professional accountant taking a bite of the business cash flow, they ensure your business is up to date in terms of your expenditure, taxes, and income. Worthwhile, right?

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Table of contents

The average cost of an accountant for a small business

Understanding the factors that influence the cost of an accountant will help you get the best price.

8 Questions that Must be Answered

Any accounting professional bidding on your accounting services will want to know the answer to these 8 questions.

  1. What type of business do you operate? (Corporation, LLC, Partnership)
  2. What is the business annual sales?
  3. How many employees in the business?
  4. How do you currently handle your accounting records? (accounting software, spreadsheets)
  5. What accounting software do you use? (Freshbooks, Netsuite, QuickBooks, Xero)
  6. What services are you interested in obtaining? (balancing books, bookkeeping, valuation, audit, manage cash flow, payroll, financial statement prep, tax returns, sales tax)
  7. How often will you need accounting services? (weekly, monthly, quarterly, annually)
  8. Will the accounting services be remote or in-person?

The answers will have a direct impact on the accountants’ time and costs and therefore determine the average cost of the accounting services. For example the type of entity dictates tax filing requirements. Annual sales offers a sense of the volume of transactions to be tracked and recorded. The number of employees helps to assess the number of paychecks and payroll related filings. The software available provides a huge insight into how much reconciling and reporting work will be required. Understanding the specific services will help the accountant to focus on what you actually want. The frequency gives the accountant an idea of your expectations. In-person or remote accounting services greatly affects the accountants time and cost. In-person services will greatly increase the cost as travel and travel related costs will be added.

Other Factors in Determining the Average cost of an Accountant

In-house vs Outsourcing Accountants

You can either outsource an accountant or choose to hire one, in-house, for accounting services. Whichever you opt for, the average cost of the accountant for the small business will vary. Both will impact the expenses of the business yet offer different advantages and disadvantages.

Depending on your business needs, the in-house accountant can either work full-time or part-time to help control costs. However, they would be considered an employee and therefore require other ancillary expenses like benefits. If the services you need are basic and routine it might be best to hire in-house as you would save the overhead and more expensive cost of outsourcing. 

Outsourcing can prove to be a very good option for a small business when considering technical accounting needs like taxes or payroll. There are many companies that specialize in taxes, payroll, and auditing that are so streamlined and effective they charge minimal amounts for very technical services. Because their fees are so competitive it is very hard to be cheaper with an in-house accountant. Another advantage to outsourcing is the flexibility to use as much or as little as you need and therefore control costs. It is much harder to terminate an employee than it is to terminate an consulting arrangement.


The average cost of an accountant for small businesses will depend on accounting expertise. Are they qualified or skilled? The level of knowledge in accounting is a crucial factor in accountants' rates. A more experienced accountant will charge more. They are confident enough since they have a great background and offer accuracy in their jobs.

Although some may offer cheaper rates, their work may lack sufficiency for your accounting needs. Any wrong done in income projections or taxation would cost more than hiring an experienced accountant who quoted much. Other small businesses may require an accounting firm for accounting services. For this, it is recommendable to ask for references from other business owners.

Look around for various firms and check on their average cost of accounting services for small businesses. After you compare prices, understand that those with higher average costs for accountancy can deliver the job within a short period compared to those with lower prices. In case of the charge hourly, it will save the small business a lot of money.


A task that is required to achieve the business accounting goals will influence the average cost of an accountant in a small business. In case the accountant is needed to deliver more, the price will shoot. Demanding and time-consuming tasks are commonly more costly compared to simple accounting tasks such as balancing accounts.

A bookkeeper, not an accountant, majorly do easy tasks. The bookkeeper can charge a few hundred dollars per hour for such simple tasks. On the other hand, an accountant will charge thousands of dollars per hour for more complex tasks.

Therefore, the level of tasks to be executed will determine an accountant's average cost for that small business. The business owner may not have the skills to perform all the accounting work. However, it is well advisable to organize and keep accurate records to assist cut down the expenses of paying an accountant. Managing records on a personal level reduces the tasks, and the time an accountant will spend in your office.

With that done, you'll only forward the records to your accountant to continue from there. They will pour fewer hours in your papers; thus, very little will be spent on payments.

Pricing Structure

The pricing structure is a crucial factor in determining the average cost of an accountant for small businesses. Commonly, three known pricing structures that accountants use: hourly, fixed-fee, and proposed-based structure.

For hourly structure, accountants are paid on an hourly basis depending on the amount of work done. In a proposal-based design, the accountant determines the amount of time that will be poured into the project and offers their rate beforehand to the business owner.

On the other hand, fixed-fee pricing is whereby the business pays for the project every month. However, the pricing structure varies with the outsourced accountants. They all have a different pricing structure for the average cost of an accountant for small businesses depending on skills and tasks to be done.

Market Research

Every small business has its fixed rates for accountants. Therefore, to estimate the average cost of an accountant for your business, conduct market research. Check on other small businesses and your competitors to know how much they pay for accounting services.

Keep in mind that businesses are different depending on your business's size, specific financial needs, the industry that your business is in, and much more. So, the fee will vary on every type of business.

Therefore, do thorough research and know the average cost of an accountant for those businesses. That is enough guide to give you a range for your accounting fee. This guide will help your small business lower operational expenses and increase revenue. The business owner will be able to choose an accountant cautiously and be confident that the accounting services offered will meet the business's special accounting needs and budget.