When you’re shopping for a monthly accounting partner, you’re looking at a fairly niche industry. Even if you do your research about what monthly accounting is and how much a specific firm (like CSI Accounting & Payroll) will cost you, you may still wonder…
Why does the industry cost what it costs? What are the driving forces?
At CSI Accounting & Payroll, we’ve offered monthly accounting services to small businesses for over 50 years, and we’re heavily involved in organizations within our industry. That means we know about what drives our prices and our competitors’ prices. Let’s discuss:
- What drives monthly accounting costs up?
- What drives monthly accounting costs down?
- How can I minimize my monthly accounting fee?
Factors That Drive Monthly Accounting Costs Up
When asked, “What do you want to hear first: the good news or the bad news?” many people choose to start with the bad news. That’s why we’re kicking it off with the factors that drive industry costs up.
Inflation
Starting with the obvious, inflation affects us all. There are rising costs for virtually every aspect of a monthly accounting service, including:
- Leasing an office space
- Utilities
- Office supplies and software
- Labor and recruiting
Labor Costs
The cost of labor in every industry is on the rise because of inflation, but the monthly accounting industry is facing an additional hardship: a lack of accountants.
The number of people graduating with an accounting degree is consistently decreasing while the cost and demand of recruiting are consistently increasing. A monthly accounting firm can pay over $20,000 to recruit a quality accountant or pay thousands per month just to list a job.
Technology Costs
Aside from inflation affecting the price of technology, there are also additional technology needs that arise as technology quickly advances.
Monthly accounting firms can pay hundreds of thousands per year to innovate with cloud-based solutions or to protect your data with new security solutions.
Compliance Requirements
Accounting is ever-changing with new requirements that make it harder to stay in compliance. That means your accountant has more work to do and more tax laws to study. Ongoing education and subscriptions for tax research can add up to thousands of dollars per year.
Service Customization
Some monthly accounting firms will offer customized solutions, giving each client exactly what they’re asking for. At face value, that sounds great! However, not standardizing a service means that costs will be higher across the board.
Monthly accounting itself is a fairly standard service, but adding on things like bill pay, invoicing, job costing, and inventory management drives costs up. That’s why CSI doesn’t offer these services.
Here are other options for managing invoicing and bill pay.
Factors That Drive Monthly Accounting Costs Down
The factors that drive the monthly accounting industry’s costs down are mostly the opposites of the factors mentioned above.
Although savings in most industries are not typically passed down to the end consumer, quality monthly accounting firms also won’t increase client fees for every little cost increase they incur.
Remote Work & Virtual Service
Fully remote and hybrid offices either fully save the cost of leasing an office space and the utilities for it, or delay the need to upgrade an office space.
For example, CSI’s hybrid and remote employees have made it so we don’t need to get a larger office space to hold all of our staff. We also host most of our client meetings virtually, saving travel expenses.
Outsourcing Overseas
Over the years, we’ve seen many of our competitors offshore their bookkeeping without notifying their clients. This results in lower labor costs.
However, CSI doesn’t do this because there tend to be a lot of problems with accuracy, so it can’t fully replace an employee because someone still needs to check the work.
Automation, AI, & Bundling
Some monthly accounting firms are spending more on automation and AI, but they’re able to use this to replace some employees. CSI isn’t laying off any employees, but we are using some of these tools to boost our efficiency and attract more clients.
Many accounting software solutions also offer lower costs per client, so as a firm grows, they save more money.
Service Standardization
As mentioned above, some monthly accounting firms will offer customized solutions (like adding on bill pay, invoicing, job costing, and inventory management), resulting in higher costs across the board.
Luckily, monthly accounting without those add-ons is a fairly standard service. That’s why we recommend other invoicing and bill pay options to keep our fee minimized.
How to Minimize Your Monthly Accounting Fee
It’s no secret that every client wants a good deal. It’s probably part of the reason why you’re reading this. You want to know what’s going to keep your monthly accounting fee minimized – and we don’t blame you! Accounting is a major investment for small businesses.
When it comes to accounting investments, you get what you pay for. Rather than moving away from CSI Accounting & Payroll in favor of a lower-priced one, consider what you can do to minimize your fees with us first!
There are two major things you can do: consolidate and bundle.
Consolidate Bank Accounts & Cards
At CSI, businesses with only one bank account and one credit card pay the lowest fees. Debt and loans are fine, but if you consolidate them, then you can keep your investment lower.
Bundle Services
Clients who bundle accounting and payroll services also get a fee reduction. Why? It saves your accountant the work of retrieving your payroll data.
Pssst! Did you know there are also benefits to having your accounting and payroll handled under one roof?
Always Know the Factors Behind Your Fee!
Now that you know about the factors that drive the monthly accounting industry’s costs up and down, plus how to minimize your accounting fee with CSI, are you ready to check out our monthly accounting services?
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 the cost of CSI’s monthly accounting services.
