An accountant is an essential role for many businesses. Though you may be able to manage your business finances using accounting software at the beginning, this task becomes increasingly more challenging as your business grows and your free time shrinks. Additionally, business finances can become more complicated over time as you expand and hire employees.
If you’re thinking about hiring an accountant, it’s important to know how much it might cost you. Keep reading to learn more about the cost of hiring an account.
How Much Does an Accountant Cost?
The amount you pay for an accountant will depend on if they work full-time, part-time or as an independent contractor. Generally, accountants are paid at an hourly rate or rates per service. On average, accountants earn approximately $38 an hour or $78,820 a year, according to the Bureau of Labor Statistics. That said, rates will vary and some accountants may charge more or less depending on several factors such as location and scope of work.
Here’s a breakdown of hourly wages and salaries for accountants, as reported by the BLS. The median salary is $70,500 and the median hourly wage is $33.89. Accountants may be able to earn more working for larger companies, taking on multiple private clients or working for businesses in major metropolitan areas.
Accountant Percentile Wage Estimates According to the BLS:
What Do Accountants Do?
You might think you can do the job of an accountant on your own, but accountants have specific education and license requirements to do their job. The specific duties of an accountant can very, but generally accountants track, process and analyze financial information to support the business’s goals. This can include creating financial models, producing analysis, managing accounts payable and receivable and more.
Here are some common responsibilities of accountants:
- Analyze financial transactions
- Tax planning
- Preparing and filing business taxes
- Routine audits
- Interpret financial data and offer suggestions
- Manage departmental budgets
- Manage accounts payable and receivable
- Prepare and maintain company financial statements and records
- Forecast business financials based on company data and economic conditions
- Help the business owner make impactful financial decisions
- Providing financial advice to operate more cost-effectively
Accountants may not have the final say in business decisions, but they can guide business owners with data and reason towards sound financial decisions. This becomes especially crucial during economic downturns, such as during the COVID-19 pandemic.
Accountants can produce a number of helpful and necessary financial documents such as:
- Income reports
- Balance sheets
- Profit and loss statements
- Cash flow statements
How to Determine If Your Business Needs an Accountant
There comes a day in every entrepreneur’s life when they realize they’re wearing more hats than they can handle. Accounting is not a job just anyone can do. Your business might be in need of an accountant for a number of reasons and especially in good times and bad times. If your business produces a large amount of financial transactions via customers, clients, partners and more, then it behooves you to hire a financial professional at some point, be it an accountant, financial controller or bookkeeper.
Here are a few signs your business may need an accountant:
- You’ve had missed or late payments to vendors, creditors or lenders
- You have a pile of unpaid invoices you haven’t followed up on
- Your business entity type creates a complex tax situation
- You’re in growth mode, hiring lots of employees and developing new departments
- Your revenue is growing but your margins are stagnant
- You’re considering selling your company
- You’re considering buying a company
- You need to provide investors with accurate and complex data and projections
- You’ve made a costly financial mistake or missed out on a lucrative financial opportunity due to being understaffed
Additional Costs of an Accountant
As with any employee, there are costs beyond salary or wages to consider when bringing them on. Additionally, you may pay for accounting software of their choice, cost of your time spent working with the accountant, healthcare and benefits if the accountant is hired full time, as well as any overhead such as an office, computer, desk and more.
How to Find an Accountant
Just as with other jobs, finding an accountant can be as simple as posting a job description, reviewing resumes, interviewing candidates and making an offer to the right person.
For financial professionals, it’s important you review their education and licenses. Certified public accountants (CPAs) have to pass a rigorous exam to earn their state license. While there are other certifications and levels of financial professionals, a CPA is typically the gold standard.
Additionally, you can find an accountant through word of mouth referrals, searching online databases or reaching out to your state’s Board of Accountancy.
The Bottom Line
Hiring an accountant may seem like one more expense, but if you hire the right person, an accountant can ultimately help your company earn more and spend less. Not having an in-house accountant may ultimately cost you more in learning financial lessons the hard way.
While you may be able to get away with handling your business finances all on your own, if your business grows into the business of your dreams, hiring an accountant is essential.