For small businesses, one of the most important accounting tasks they need to handle on their own is bookkeeping. After all, in order to understand how your business’s finances are doing and where you need to be financially as a company, you have to understand your business’s financial picture and that’s where bookkeeping comes in. If you have an accounting firm in your corner who can take care of bookkeeping for you, great!
According to Staffing Industry Analysts
Staffing Industry Analysts estimates that there are nearly 1.5 million payroll and tax preparers in America; they expect 4-5% annual growth through 2026. That works out to around an additional 50,000 positions each year. The median pay for a payroll manager in 2017 was $50,440 annually, or $24 per hour. Pay can vary significantly depending on whether you work as an employee or self-employed contractor. We’ll break down some of these differences below, but here’s a quick rundown of hourly income ranges for small firms
According to The Bureau of Labor Statistics
The salary range for bookkeepers, accounting clerks and payroll/timekeeping clerks varies with experience and job title. The median income for a bookkeeper was $32,220 annually in 2010, according to BLS. The highest-paid 10 percent earned $51,440 or more per year. Pay rates for accounting clerks vary greatly depending on employer and location. For example, PayScale reported an average hourly rate of $13.65 as of March 2012 and a national average annual salary of $36,974 as of May 2011. In addition to receiving an hourly wage or annual salary for their work as accounting clerks, many workers are paid by commission. Approximately 17 percent receive commissions only.
According to Medical Practice Management
The average size of an accounting firm is about nine employees. Accountants who work for small firms generally have access to more opportunities for career advancement than their peers in larger organizations. For example, accountants working in small practices often become partners within a few years of starting employment with a company, while accountants at large firms may be required to hold several roles before becoming a partner. Many accounting professionals begin their careers as auditors or bookkeepers, then move into positions that require increasing levels of client interaction and independence from management. Such positions include financial analyst and personal tax accountant.
Consultants Fee Income by CPA Firm Size
The average annual fee income for small accounting firms is $11,000-$25,000. Medium accounting firms make an average of $125,000 annually, while large companies bring in an average of $425,000. Is your practice performing up to its potential? If not, it may be time to hire some additional support staff or consider expanding your business model through franchising opportunities. With resources from NAPSC and SCORE available to you as a member of NAPSC National Association of Publicly Traded CPAs, you can find all you need to get started on your path toward successful growth.
Estimated Fees for SOHO Accounting Services
Accountants offer a variety of services, including tax preparation, bookkeeping, year-end and quarterly financial reporting, business consulting and more. Because they may be small businesses in their own right, they can also offer services that larger firms can’t. Many accountants charge anywhere from $75 to $150 per hour for their work. An accountant who charges $75 an hour will make about $52,000 a year; at $150 an hour, that would add up to about $120,000 a year. But actual income might be higher or lower depending on whether overhead expenses like rent and other costs of doing business are deducted from revenues or added on top of them.
Estimated Fees for Solo CPAs
The average solo CPA firm grosses $200,000 to $300,000 per year and charges a fee that is 33% of annual revenues. If you’re thinking about going into solo practice for yourself, these numbers give you an idea of what your estimated income would be. You could certainly charge more or less than 33%, depending on your experience and expertise; however, it’s important to remember that many costs associated with running a small business – such as office space and supplies – aren’t accounted for in these numbers. For example, if you’d prefer not to pay extra rent by using your home as an office but still want a professional atmosphere in which to meet clients, these hidden costs might put too big of a strain on your profits.
How Much Would it Cost to Hire a CPA?
Many small businesses start with a part-time bookkeeper who handles everything from reconciling accounts to paying taxes, but eventually need professional help. Even if you have an accountant on call, chances are good that you’ll still use a CPA to prepare your company’s tax returns. CPAs and other accounting firms charge by the hour or project and their rates vary widely depending on location and practice area. The average cost of hiring a CPA is between $200 and $300 per hour though many small businesses spend less than $100 per hour, though if you know exactly what kind of work your firm needs done, it’s possible to hire an accountant for as little as $50 per hour.
How much does an accountant cost per hour?
As with any service, it’s important to understand that not all accountants charge a flat rate. If you have a simple tax return, you might be able to find an accountant who charges as little as $150 per hour. But if your business has complex needs—for example, many employees or international entities—then it’s very likely that you’ll pay more than $200 per hour for accounting services. Keep in mind that some accountants may offer additional services like bookkeeping and payroll processing, and these are typically billed separately and can cost several hundred dollars per month. This is why it’s so important to fully understand what your accountant offers before signing on with them.
Of course, every small business is different. But with a little research into your potential customers and local competition, you can create an effective marketing plan for your firm. Of course, it’s also important to take advantage of technology whenever possible. You should have an easy-to-use web presence and a solid social media strategy in place before you launch your business. And don’t forget about local networking events your personal connections are worth their weight in gold when it comes to growing a business!