As a small business owner, you know that you have to have current books. However, there are a few ways to achieve this. Should you do it yourself, hire an accountant, or work with an outsourced service? First, you need to know what each of these things entail.
CSI Accounting & Payroll has helped small businesses with accounting for over 50 years. We’ve talked to small business owners who have worked with all kinds of accounting solutions. Here’s what they wanted to know:
You can do your own accounting with the help of bookkeeping and tax filing software, but there is a huge question about whether or not you should.
Business taxes have a lot more at stake than individual taxes, and the value of your time as a business owner is way too high to be spent working on your books. Ideally, you should focus on growing and improving your business. Doing your own accounting isn’t truly free when you consider this.
Even startup businesses with more limited budgets begin with either the owner or an administrative employee doing the bookkeeping. However, they’ll often at least pair this with a professional tax service. This still doesn’t guarantee accurate books, tax savings, or guided decision-making, though.
We say the best time to hire an accountant varies a bit, but it’s largely whenever you feel like you should. The same is true for working with a service.
Regardless, don’t neglect your accounting! There are lots of consequences for this, including facing back taxes to make up for everything missed once you start getting your books together.
First, make sure you know what it takes to have an in-house accountant. You have to consider the following cost factors of hiring and retaining an accountant as your employee:
The total cost for employing a full-time accountant is approximately $60,000-$85,000 per year as of 2023, and there is also a huge range in services that they provide your business.
That means the range is approximately $5,000-$7,083.33 each month to employ a full-time accountant in your business.
On the other end of things, basic bookkeeping services with a fixed pricing structure will often charge $300-$1,200 per month for bookkeeping and (sometimes) monthly financial statements. The price will increase if other services are added on, such as:
If your bookkeeping service does not offer annual tax services, you need to work with an annual tax accountant. There are disadvantages to not having your bookkeeping and taxes under one roof, though - such as a lack of year-round tax strategy and potential errors being missed.
If you work with an annual tax accountant, then you should receive a bill with a fee ranging from $500-$2,500 annually. This range depends on:
As mentioned in the section above, the total cost for employing a full-time accountant comes out to approximately $5,000-$7,083.33 each month as of 2023, and there is also a huge range in services that they provide your business.
What is monthly accounting? Monthly accounting is a step up from basic bookkeeping. It includes more services - and therefore more value. It’s basically a bookkeeping, consulting, and tax service all in one.
As an example, CSI Accounting & Payroll’s average monthly accounting investment is around $675. A client at this price point would either have a complex accounting situation with roughly 50 monthly business transactions or have no complexities and just under 100 monthly business transactions.
However, depending on your activity and complexities, your fee can range from $500 to $1,000+ per month.
Monthly accounting includes the following in that set monthly investment:
Monthly accounting services also offer other services that you can add on for an extra cost:
Make sure you know when monthly accounting is the right fit for your business.
If you’re ready for monthly accounting but you still use a lower-level service, you can put your business at risk. You won’t notice potential issues as quickly before they snowball. It also helps you stay on top of your finances and make better-informed business decisions.
It’s important to stay on top of your accounting! Now that you know about doing your own accounting, hiring an in-house accountant, using bookkeeping services and tax services, and using a monthly accounting service, do you think monthly accounting is right for you?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to be a client of CSI Accounting & Payroll by clicking the image below: