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How Much Should Accounting Cost a Home Business?

Posted August 28, 2018 by Sue Prichard

When you’re running a home business, unless you’re nutty about numbers, accounting can seem like a chore….and a very complex one at that. It is however an extremely important task for your business, and one that could save or make your business significant amounts of money. So, how much should accounting cost a home business?

That’s quite a complicated question to answer as it’s very dependent on the level of service you require. Are you looking for just the completion of your annual tax return? Or are you looking for a full service from financial setup, bookkeeping, analysis and advice, financial statements, tax minimisation, and tax returns.

Why do I need an accountant?

When your business is growing or you’re planning for it to grow, an accountant can be invaluable. From set up, to ongoing management, with the right advice, they can make a huge difference to the amount of tax you pay.

Accountants can help with questions as to whether you should be set up as a company, sole trader, trust, or partnership.

If you’re having difficulty keeping on top of your invoices, perhaps it’s time to move to a cloud based system? An accountant can help to implement this into your business.

Then there’s tax. Completing your tax return and ensuring your tax compliant. An account can help to ensure you and your business aren’t overpaying tax.

How much will an accountant cost?

This is a complicated question as there’s not a one-size-fits-all answer. It’s dependent on many factors such as size of business, annual turnover, current state of bookkeeping etc.

The more important question is what can an accountant save your business. For instance, if you’re spending huge amounts of time on the accounting side of your business, is that a good use of your time? If you’re hourly cost is $100 and you’re spending 10 hours a month on accounting, that’s $1,000. Is it worth it?

The cost of an accountant is also very dependent on your requirements, the state you live in, how much assistance you need, and how complicated your tax requirements are. As a very rough guide, you can expect to pay:

  • A typical hourly charge is between $150-$350 per hour

  • BAS statements could cost between $150 – $200 monthly or $200- $350 quarterly

  • A straightforward yearly tax return may cost between $450 – $3,500 (depending on size, quality of bookkeeping, and complexity)

  • Tax planning could cost between $700 – $1000

Like with any business relationship, it’s important to chat to a few people and get a few quotes. If you can agree a fixed price upfront, even better.

How do I choose the right person for my small business?

So, you’ve decided that an accountant is what your small business needs. How do you make sure you choose the right one? As with anything, there are some basic questions to ask at the start:

  • Are they a member of a relevant professional association?

  • Do they have experience in your industry or a business similar to yours?

  • When you chat to them, do you get a good gut feel? Do they seem like someone you’d want to work with?

  • How do they like to be contacted and is it conducive to you? I.e. are they happy with an impromptu call and a quick question, or do they need you to schedule every conversation?

Scour the internet, ring around, start a conversation, and go from there. Good luck!

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