KNOWLEDGE

How Much Does it Cost to Hire a Small Business Tax Accountant?

Overview

There’s an old saying that there’s only two certainties in life – death and taxes. If you run your own business, then you know all about the latter. Hiring the services of a small business accountant will help to ensure your tax compliance, including all of your ongoing reporting obligations to the Australian Taxation Office (ATO).

However, it’s usually far more cost-effective to outsource your accounting tasks rather than hiring a full-time or part-time accountant within your small business (or taking a DIY approach).

This article highlights:

The benefits of outsourcing your accounting.
Factors that affect small business accountant fees.
Key considerations when choosing your outsourced small business accountant.
Questions to ask when choosing your business accountant.

The Benefits of Outsourcing Your Accounting

Outsourcing your small business accountant tasks can provide you with a range of benefits.

An Outsourced Business Accountant Will Save You Money

If you’re like most Australian small businesses, you wouldn’t be able to justify having a full-time (or even part-time) accountant on staff. Employing people is expensive, especially professional staff. It’s not only their salary you have to pay, but add-on costs like the compulsory super guarantee as well.

Good Small Business Tax Accountants Minimise Your Tax Bill

Outsourced tax accountant costs can be fully or partially offset by the amount of tax they can save you. They do business tax returns for a living, so they know how to maximise all your business tax deductions to minimise the amount of tax you need to pay.

You should therefore think of your business tax return cost as a small price to pay for your tax savings. Even their fee is tax-deductible!

An Outsourced Business Accountant Will Save You Time

If you’ve been trying to do some of your business accounting tasks yourself (aka the DIY approach), then unless you have the skills, it’s sure to be time-consuming and frustrating for you. You’re also more likely to make potentially costly errors.

Outsourcing those tasks to an accountant for business instead will inevitably free up your time so you can focus on running your business rather than number crunching.

Factors that Affect Small Business Accountant Fees

Accountant fees for small businesses vary depending on a range of factors, including:

The range of services provided.
The level and complexity of support provided.
The size of your business.
Your business structure (i.e., whether you or a sole trader, a partnership, a company or a trust), as different structures have different tax reporting obligations.
Whether the accountant or accountancy firm charges an hourly rate for their services or a fixed fee.
The experience level and reputation of the accountant or accountancy firm.

Small business accountants typically provide any or all of the following range of services:

Processing your business activity statements (BAS) and tax returns.
Ensuring that you maximise your eligible tax deductions to legally minimise your tax bills.
Payroll processing of staff wages to ensure your compliance with ATO regulations, including STP (single touch payroll), PAYG (pay as you go) withholding tax and the compulsory super guarantee.

So, how much does it cost for an accountant?

Accountants typically charge their clients an hourly rate, which can lead to cost surprises. However, for small businesses looking for cost and budgeting certainty, it might be best to consider a fixed fee subscription model like the one offered by us at Retinue.

Key Considerations When Choosing Your Outsourced Small Business Accountant

1. Beware of ‘Cheap’ Accounting Services

Don’t make the mistake of automatically choosing the cheapest accounting service available, whether it’s an hourly rate or a fixed subscription fee. If you do, you can risk the following:

An inexperienced accountant or junior staff member will perform your accounting tasks, and who won’t get the value or savings that an experienced accounting professional can provide.
An experienced accountant may do your tasks, but they will only spend minimal time on them due to the cheap price. Once again, this will limit the amount of value or savings that they can provide to you.

2. Their Service Offerings

The best outsourced accounting service providers offer a full range of services and they can tailor those services to your specific business needs.

3. Their Level of Experience

This includes their level of experience with not just small businesses, but also with those that have the same structure as your business (i.e., sole trader, partnership, company or trust).

4. Their Value-Adding Potential

The best small business accountants add value to their clients’ businesses by providing strategic advice on how to maximise their profits and minimise their tax obligations.

5. Plenty of Good Testimonials

A high-quality outsourced accounting service should have plenty of testimonials from satisfied small business clients.

Questions to Ask When Choosing Your Business Accountant

Questions that you should ask to help you choose your outsourced accounting service include:

What experience do you have with providing services to small businesses?
Will you provide advice on how to legally minimise both my business and personal tax obligations?
Will you provide advice on how to grow my business profits?
Will you provide advice on the best accounting/bookkeeping software and processes for my business?

The Bottom Line

When choosing your outsourced accountant, look for the right fit for your business needs, structure and financial goals.

How We Can Help

Our experienced and professional accounting team at Retinue is passionate about helping small business owners to succeed. We take the time to understand our clients’ business needs and goals.

We offer a full range of accounting services and can provide you with as much support as you need for a fixed monthly subscription fee. We can save you time and hassle so that you can focus on what you do best.